Lindy Effect 101

With Bitcoin's return to the spotlight, debates on its long-term viability are raging. Its proponents contend @nntaleb's Lindy Effect says the technology is here to stay.

But what is the "Lindy Effect" and how does it work?

Here's Lindy Effect 101!

👇👇👇

Warren Buffett is a treasure trove of wisdom.

But contrary to what you have been told, most of it has nothing to do with investing.

10 powerful lessons for life from the Oracle of Omaha:

Wait For A Juicy Pitch

“You don't have to swing at everything - you can wait for your pitch."

Life doesn’t reward you for the number of swings you take.

Focus on identifying the juiciest pitch.

When it comes, swing hard and don’t miss it.

Just Stop Digging

“The most important thing to do if you find yourself in a hole is to stop digging."

When things aren’t working, change course and try something different.

Be nimble. Be agile.

When you find yourself at the bottom of a hole, stop digging and climb out of it.

Exploit Disconnects

“Price is what you pay. Value is what you get.”

Seek out situations where there is a clear disconnect between price and value.

This applies to investing, but it’s more broadly a mental model for life.

Identify disconnects. Exploit them to your advantage.

Be Contrarian

“Be fearful when others are greedy and greedy when others are fearful.”

Following the crowd is easy, but it can be a trap.

Learn to think independently. Come to your own decisions. Develop your own mental models.

Your unique perspectives are your superpower.

Survivorship Bias 101

History is written by the victors. But if we exclusively focus on these successes, we allow survivorship bias to distort our understanding of the world.

But what is "survivorship bias" and how does it work?

Here's Survivorship Bias 101!

👇👇👇

1/ First, a few definitions.

Survivorship bias is the logical error of concentrating on survivors (successes) and ignoring casualties (failures).

When we do so, we miss the true "base rates" of survival (the actual probability of success) and arrive at flawed conclusions.

2/ When we completely ignore failures, we lose our ability to correctly identify the differences between successes and failures.

Put simply, exclusively focusing on successes may actually inhibit our ability to identify (and replicate) the actions that led to such success.

3/ Cicero wrote on the topic over 2,000 years ago.

An atheist named Diagoras is shown portraits of people who prayed and were saved from death at sea as proof of God's existence.

Diagoras replies, "I see those who were saved, but where are those painted who were shipwrecked?"

4/ Cicero cuts right to the point - we cannot conclude that prayer led to being saved from the sea if we ignore those who prayed and then drowned.

Survivorship bias can lead to a deeply-flawed understanding of cause-and-effect relationships.

Let's look at some examples.

In 1983, a 52-year-old senior executive at Texas Instruments was passed over for the company's top job.

He would go on to found and build the most strategically important company in the world.

Who's up for a story?

👇👇👇

1/ Morris Chang was born into a middle-class family on July 10, 1931 in Ningbo, Chekiang, China.

The early years of his life were set against a backdrop of hardship.

Wars and widespread poverty had overwhelmed the country, exposing him to this suffering at a young age.

2/ His father - an official in the local government - encouraged Morris to focus on school.

Fleeing the violence of the ongoing wars, Morris and his mother moved frequently.

His studies became his respite.

In 1948, at the height of the Civil War, they moved to Hong Kong.

3/ In 1949, Morris Chang was accepted to Harvard University.

He moved to America.

After just one year at Harvard, he transferred to The Massachusetts Institute of Technology (MIT) to study engineering.

He graduated in 1953 with a B.S. and M.S. in Mechanical Engineering.

4/ While he had originally intended to continue his studies and get a PhD, he failed his qualifying exam, so was forced to enter the job market.

He took an entry-level job with Sylvania Semiconductor, but quickly realized the company wasn't forward-thinking enough for his style.

22 ideas from 2022.

The top 1% of ideas I encountered:

The Feynman Technique

Four steps to learn anything:

(1) Identify a topic
(2) Try to explain it to a child
(3) Study to fill in gaps
(4) Organize, convey, and review

True genius is the ability to simplify, not complicate.

Simple is beautiful.

Visualizing Time

1. Family time is limited—cherish it.

2. Friend time is limited—prioritize real ones.

3. Partner time is significant—never settle.

4. Children time is precious—be present.

5. Coworker time is significant—find energy.

6. Alone time is highest—love yourself.

Darkest Hour Friends

Most of your friends aren’t really your friends. They‘re just along for the ride when it’s fun or valuable.

The real ones are there for you when it’s neither—there for you in your darkest hour.

Treasure your Darkest Hour Friends.

Be one to someone else.

The Two-Day Rule

How to make new habits stick:

With whatever habit you're trying to build, never allow yourself to skip more than one day in a row.

Creates forward progress—but allows for the vagaries of life to enter without derailing momentum.

A paradox is a seemingly self-contradictory statement that proves true.

The most powerful paradoxes I’ve found:

The Paradox of Failure

You have to fail more to succeed more.

Our greatest moments of growth often stem directly from our greatest moments of failure.

Don’t fear failure.

Learn to fail smart and fast—never fail the same way twice.

Always put yourself in the arena.

The Paradox of Persuasion

Ever notice that the most argumentative people rarely persuade anyone of anything?

Persuasive people don’t argue—they observe, listen, and ask questions.

Argue less, persuade more.

Persuasion is an art that requires a paintbrush, not a sledgehammer.

The Paradox of Productivity

Work longer, get less done.

Parkinson's Law says that work expands to fill the time available for its completion.

When you establish fixed hours to work, you'll find unproductive ways to fill it.

Work like a lion instead—sprint, rest, repeat.

The Paradox of Effort

You have to put in more effort to make something appear effortless.

Effortless, elegant performances are simply the result of a large volume of consistent, effortful practice.

Small things become big things.

Simple is not simple.

🧵Thread: 10 Rules for Verification on a #Bitcoin Hardware Wallet 👇

Rule #1: DO NOT TRUST THE COMPUTER SCREEN.

The very reason for using a hardware wallet is that your computer IS compromised, trusting it makes using the hardware wallet an expensive security theatre (or 2FA at best).
Always verify on the HWW device screen!

Rule #2: Verify your "receive" addresses BEFORE accepting funds.

A compromised computer can be tricked into displaying addresses that belong to an attacker. The only way to make sure you own the addresses is to display them on the HWW device and verify they match.

Rule #3: Verifying change address should be done by the device when sending funds, not before like receive addresses!

It is pointless at best, and misleading at worst, to verify them beforehand like receive addresses...

All hardware wallets support verifying the change address belongs to you AT TIME OF SIGNING A TRANSACTION.
Verifying before that is pointless and error-prone.

Now let's talk some multisig...

TRIANGLE MASTERCLASS - a thread.

what's the simplest, most effective method of trading a market that trends as hard as cryptocurrencies?

trendlines.

one trendline on its own is strong, but when you put two together you quickly realize just how powerful this simple tool can be.

i've been using triangles for as long as i can remember.

it seems dumb, and almost counter-intuitive to approach such a complex game like trading with such a simple approach like shapes...but maybe when markets start acting stupid its okay to dumb down our approach.

look, not all triangles are the same.

anybody can draw some lines on a chart any way they'd like. sometimes, we let our bias affect our charts rather than the other way around.

i personally have done this more times than i can count.

you see...triangles (and analysis as a whole) is not necessarily intended to make trading easier as much as it is to make trading simple.

you want a fluid bias that can change easily, rather than one relying on 10 steps of conflicting confirmation before entering a new trade

trendlines enable us to maintain a fluid bias.

i mean, how much simpler can it be than "above this line bullish, below this line bearish" ? 😂

one trendline on its own can be enough to make a good trade, but when you put two together it can turn a good trade into a great one.