Ep. 71 — Max Arbitrage: Technological Advancements in Healthcare

[Music] hi i'm jim o'shaughnessy and welcome to infinite loops sometimes we get caught up in what feel like infinite loops when trying to figure things out markets go up and down research is presented and then refute it and we find ourselves right back where we started the goal of this podcast is to learn how we can reset our thinking on issues that hopefully leaves us with a better understanding as to why we think the way we think and how we might be able to change that to avoid going in infinite loops of thought we hope to offer our listeners a fresh perspective on a variety of issues and look at them through a multi-faceted lens including history philosophy art science linguistics and yes also through quantitative analysis and through these discussions help you not only become a better investor but also become a more nuanced thinker with each episode we hope to bring you along with us as we learn together thanks for joining us now please enjoy this episode of infinite loops jim o'shaughnessy is chairman and co-chief investment officer of o'shaughnessy asset management where jamie catherwood is an associate all opinions expressed by jim jamie and podcast guests are solely their own opinions and do not reflect the opinions of o'shaughnessy asset management this podcast is for informational purposes only and should not be relied upon as basis for investment decisions clients of o'shaughnessy asset management may maintain positions in the securities discussed in this podcast well hello everyone it's jim o'shaughnessy with another episode of infinite loops and i'm very happy to say my now in real life friend max arbitrage which is his handle on twitter is my guest today welcome again max thanks i didn't even know life was real this is good to know yes it is we discovered life was real when we got together a couple of weeks back i felt like the pinocchio thing where they turned him into a real boy and i'm like you're a real boy max except i called you by your real name that's right that was the coolest metaverse i've ever been i felt sensations of wind that i've read about before i saw people walking and what looked like three dimensions it was amazing actually it was crazy it came out of the plane i gotta tell you that's ours we've been working on it and we have only that one little area of manhattan man because if you noticed when you got out of that area you were right back in flatland right absolutely it was rendering in real time at the speed of light i was watching it as i walked i saw it rendering slowly you know what i loved about talking to you is like we can go for two hours just on what gets brought up so we're gonna talk about rendering and all that [ __ ] in a minute but here's what i want you to do you're cool with everyone knows you're a doctor right i mean absolutely not a problem okay so that's not a problem so i have been studiously avoiding all of the online [ __ ] the anti-vaxxers the pro-vaxxers the anti-masters they pro just because i think it's idiocy just all around and people have just lost their minds honestly so what i'm going to ask you to do is a public service and that is can you describe just in a very straightforward way and then i'm going to tell you what i think about it you already kind of know but a very straightforward way can you explain the what i call a technology platform of mrna which is being given right now as the vaccine sure so like we're not going to go deep in this science we're going to use metaphors because it'll be a little bit more interesting so a couple things to realize is there's a genetic code which is pieces of information it's almost like a string of letters and that turns and creates proteins and proteins act on cells and they do the real work of what we consider life and if you think about a place like toyota you think about a car factory they have a bunch of machinery in there there are things that are moving around each one of those machine parts has a written instruction behind it the code so it's important to realize that those are two separate things there's a code that exists in ones and zeros or in letters and there's the actual reality of what that does once it's printed out now you can think about this in terms of words think about a simple word like the word dog and the word dig they're separated by one letter so technically at the letter level there's only a tiny difference between those two words at the real level they mean something totally different they're not related at all now if you were to enter into the world and nobody told you that those two words related and all you did was see somebody digging and you saw a dog you might not be able to immediately realize that both of those have a word that's fairly similar to each other and that's been the problem with proteins for basically decades or centuries we see proteins we see what they do we can figure out what the code is we could never figure out how do you get from that code to this particular protein two proteins can be totally different doing totally different things the genetic code might be just very slightly different from one to the next that's a big problem that's probably the biggest problem that we have in biology today and what mrna allows us to do basically is it allows us to create genetic codes and snippets of things that turn into proteins that can then act physically in the physical world and it's several decades so when people talk about modern and all these things like oh they just did this no this has been going on i was a ta for genetics in the mid 90s we were talking about this then the question was now you can think about it going backwards in two directions can you create a genetic snippet run it create a protein and then see what the protein does or can you also find a protein that exists in the wild and work backwards to see what the genetic code is both of these things are very important alpha folded google's working on the lateral figuring how can you take proteins and figure out what the genetic code is leading to them and a lot of genetic companies like madonna and stuff are saying how do we create something with a genetic code now a simple way to think about it is your body's full of shapes these are immunoglobulins all these things are shapes cova goes in your body it inserts a bunch of different shapes your body doesn't know what these shapes are you really want to know what the shapes are that enter your body you want to label them as good or bad traditionally or as okay leave it alone at least and with code what happens is their bodies doesn't seem to know what those shapes are and so what this allows us to do is give somebody some of those shapes to say look this is a shape it's a foreign shape and you need to create something to protect and cover this shape and basically make it disappear out of your bloodstream and by doing that by triggering your immunoglobulins you've now created a factory that knows how to basically put a mask or a hat on top of this thing a piece of clothing essentially on top of this thing and make it kind of disappear from your immune system so what they're basically doing is printing things that can attach to covet or different parts of covet in ways that essentially mask it and allow that labeling process to tell your body okay this is what this is this is what you should do with this we've done this other ways in the past we've done this by traditional vaccines you give people small pieces of essentially the codes they print the proteins your body sees those now you may say to yourself like what's the difference and what isn't this dangerous is it non-dangerous one of the critical pieces here is a lot of these viruses like covalent for example it's something like 30 000 codons which is like 10 000 let's say words which would be like 25 pages so it's a 25 page pamphlet that's what you got which is causing all this habit one of the world's worst pamphlets of all time maybe it's really creating a lot of hack you think about something like that well if you run the whole script of the 25 pages you get a lot of damage if you just happen to pick up two or three pages randomly from the system and just use them and feed your body with that you might be able to give a small enough amount that it cannot complete its entire set of instructions but it can only complete enough to give you a little bit of protein so you have something to tag and label that you can use later now why is this a problem which it is a problem is because the codes are going to constantly change so the words are always changing every time the virus mutates it's going to change so you're going to have continual creation of new proteins it's almost like a mini war you got going on here you've got the virus that wants to survive and it's going to continue not through survival fitness but non-survival of the non-physics it's going to leave behind the viruses that are able to evade your labeling system and it's going to continue to do that and what our job needs to be is to create new systems to combat these new proteins that it creates and people debate what is going to happen what's going on probably what's going to happen is the same thing that's happened for the last thousands of years which is that these things tend to go in circles and eventually what you end up doing is there's a dampening effect you'll basically theoretically what you should see is it's going to create more and more shapes we're going to have a platform of moderna and all these other companies create more and more things to protect it eventually it should settle down into seasonal pattern and ideally that's the end result of this thing that a decade from now and i'm not saying it's going to take a full decade i'm skipping giving an answer of how long it's going to take because by the way it's going to be different everywhere in the world depending on where you live it's going to have different issues just like if you go in parts of western africa your parts in india there's certain problems with polio stuff for example so that's the basic kind of analogy is that there's written pieces of code and there's physical systems there are physical proteins that can do things and our job is to figure out what's the relationship between these two and eventually eventually hopefully in the next 30 to 50 years what we will see is instead of people talking about creating neural nets with silicon we might see the emergence of creating machinery via the biological mechanisms directly why are we printing stuff in silicon and creating trend trying to trap all these transistors and trying to really make something tiny when nature already has a very low energy version of this already a very highly efficient version of this already so you could see that in the future you could see keep creating nanobots with mrna i think that's definitely going to happen it's just a matter of time and how extensive they get is also probably a matter of time so first off very excellent explanation i've been trying to get it down to something in your use of metaphors perfect i'm going to memorize that and tell that to people because as you know i'm pretty bullish on the technology could you spend just a few minutes on you started at the end there though but there are a lot of other applications for this technology correct so like the obvious ones are the medical ones like cancer or the simplest way you can think about it which is kind of crazy to think about it this way but you can think about a video game and you can think about the fact that people have video games and there's a developer and if a developer wants and he wants to go to fortnite and he wants to put a knife in everybody's hands he can and if you want to change the color of that knife to everybody at the same time he can do it because he's got the code base to do that so in theory you could actually basically print pretty much anything okay so what kind of things you could have an oil spill you could figure out a biological mechanism to essentially extract the oil from the water in that spill you could create nanobots dump them into the water and you could basically use those to clean up oil spills you could do things with cancer you have a cancer cell that basically says i don't give a [ __ ] about anybody else in this body anymore i'm going rogue i'm going to live my free life i'm just going to duplicate and use up all the resources and you can figure out what the mechanism is of this cancer cell doing that stuff and you can create a combatant kind of knife for yourselves essentially okay this is a metaphor again but you can create systems for your cells and say look now you have this to combat this cancer cell would use that instead right now the way we deal with medical problems it's almost like laughable it's nothing it's not anybody's fault it's just people don't realize that medical technology is not that different from it was a hundred years ago or 200 years ago in the sense that we're working at macro levels when somebody has cancer we will radiate the entire we'll basically blast the entire area we'll just set it completely just destroy it when people get chemotherapy we'll give them drugs that go in the entire bloodstream they'll go everywhere and essentially kill multiple cells of different types there's new versions of that which are more targeted of course so we're getting better at that but you could eventually what you eventually want to do is you want to get to the point where you can target exactly the molecules exactly where they are and to do that you really have to shrink things down to that skill there's other diseases multiple sclerosis there's all these autoimmune diseases anything in your body that's informational based is essentially happening upon a layer of proteins and physical structures that you can actually see and anything that we can make that's a physical structure to combat those physical structures to help those physical structures will probably get made over the next 20 30 40 50 years but in the chemical engineering world a lot of chemical engineering is just doing transformations of one thing to the next and again you could use mrna printing to create a protein and a protein could do something like that you think about a company like desktop metal they have to do things right now not in a biological way but in a innate atomic substrate way eventually you could have printers that did all sorts of kind of things and so like if you wanted me to get into the list of things that you could do with this i think you could make 100 pages of just things like and you could dream up an insane amount of stuff and the reason this is important is that you can look at all the computers in the world today and you can basically calculate that the amount of neural nets you could create from the computational power we have today it's just like a few people's work it's not like one human has equivalent of that type of computational power but we're running on like 20 to 100 watts we're running on a very tiny amount of energy and we're using a massive amount of energy to simulate this so clearly the algorithms we're using in the silicon world are not the algorithms that the biological carbon-based world are using because otherwise we would be running through solar energy the world would be using the energy that the sun creates at a factor of quadrillions x of what it is so that's where the secret comes is how do we steal the algorithms of nature at those high energy efficient levels this is probably the best way we will probably be able to do it for a long period of time and so i'm pretty excited about as you can tell the valuations of these companies i have no clue i tend to not buy individual publicly traded stocks mainly because my goal in life is to compete with the dumbest people not the smartest people and so i avoid publicly traded markets because like one of my strategies in life is simply like try to find easy battles to win don't find difficult battles to win but it's exciting it's exciting it is very exciting that's a very good strategy actually a follow-up question there so i had robert ploman who wrote the book blueprint how dna makes us who we are he's a genetic behaviorist and he's a professor over at king's college in london he's an american but he is a genetic expert obviously and one of the things that he was really kind of at pains to get across is there are very few diseases for example that are caused by a single gene he says correct there are most of the bad ones are caused by an interaction of multiple genes how do we tackle the multiple gene problem in the description you just gave of building using nature's code as opposed to what we're building with silicon that's a great question and actually that's 100 correct and it's one of the problems people have but one of the things that you're you have a genetics background is painful is listening people talk about well this is genetic and that's genetic well most of the time there's like so many genes involved in these things it's a little bit like people use shorthand like the company apple the company go well it's not really that it's a bunch of different people and all sorts of things are happening internally so that's the case with multi-factorial genetics now there's two ways you can break that one way is all those multi-factorial genetics do lead to protein type cascades and so ultimately even though there might be a hundred genes that encode for the behavior of one protein at the protein level it may actually be fairly simplistic in other words at the protein level you may be able to isolate that these are the proteins that are causing the problem sure there's thousands of different genes that are related to this but you could create robotic arms that essentially affect that protein in a way that essentially get rid of that problem i wish that was most problems but it won't be that that's going to be some subset in the same way that single gene problems are one small subset of all gene problems single protein problems are likely a small subset of all problems something like pain for example i'll break it down there's kind of two ways you can make a medicine you can think of physical processes the heart the diaphragm of the lungs things that are essentially biophysical in nature like a heart to pump then you can think about the informational part of the body things like the neurosciences things like the gi biome bacteria in the gut things like the endocrine system which is informational signaling systems those are informational processing systems these problems that i'm talking about initially about what things we can solve the informational processes are going to be much more difficult than any of those things because informational processes are going to be happening at the informational plane they're not going to be happening necessarily at the structural plane and so that is going to be an issue in other words solving the pain problem which is as you know probably a lot of people in this country have pain a lot of people the world have pain a lot of people have chronic diseases that are essentially never solved and that's one of the reasons i think a lot of people hate doctors or not hate them but are very frustrated is because nobody wants to be in pain and like we don't have any system we're just like take some opiates you're in like that here's some marijuana you want to try that we're basically like throwing random things at like maybe that'll work and maybe people will chill out for a decade and we'll wait till they get angry again that's kind of the way we're dealing with it because we don't know how to attack the informational plane of pain in the brain and so those types of things are probably going to take a lot longer there's going to be these complex systems that are multiple proteins and informational cascades that you're not going to be able to attack simply i call it kind of like the middle east of problems in a sense like some of these things may take a long long time to figure out you may have to create neural nets that essentially take the data out of our bodies and eventually take that information and try to work backwards to figure out where in the system in the gene cascade can we attack one set of these genes in the multi-factorial complex that can really knock out the target we might have to do stuff like that so i don't think the mrna problem is going to solve necessarily all of the diseases and probably like maybe let's say 10 or 20 percent of things that we're struggling with right now i might figure out but a lot of these things are going to be very difficult neurological endocrine issues are going to last for a while i think so then the obvious question becomes obviously with any progress come risks and so what do you see as the risks of this technology encompassing all the things that we've been discussing the biggest risk is we don't understand how the informational cascades in the body works if you want to take a big white board and draw all the chemical reactions in a plant or on a bacteria or on a human body you actually can't draw the entire thing you can't even do it for single cell completely and those cascades that i'm talking about all feed back into each other so even if you could figure everything out how are you going to create an algorithm to iterate that process forward it's not clear to me that there is an algorithm nature might be that algorithm the issue there becomes is you don't have the full biochemical pathway that exists in the human body and we're going to start tinkering and putting stuff into the system there's always a risk that will trigger some new type of cascade of informational systems inside our body that does something that's negative and it may take a while to figure that out there's definitely the risk of that even with a covered mrna vaccine i took the vaccine without even thinking about it knowing fully well that that could be potentially the case and the reason i don't worry about it is because most of these informational cascade systems tend to trigger almost immediately meaning you give somebody something and your body starts to go into this progress of you're going to start to notice things that start to come up and over a period of time as time goes further along you kind of get an exponential decay of something which is true of everything you take in your body you eat some food initially it causes a glucose spike and you have insulin a year later your body is not really reacting to that piece of food that you had a year ago not necessarily that specific meal i think that's part of what's going to happen a lot of stuff is they're going to have to test it in animals they're gonna have to see what happens at that level and they're gonna have to do safety trials and that's the part where if you're an investor you really need to understand what you're doing because a lot of people do not understand about medicine is it's a much more slow moving process than people realize you gotta get through phase one which is safety trials you got to get to phase three which is larger trials to show that it actually works and it's still safe and you're still monitoring phase one patients then a year two years later and then i got the phase three multi-center massive kind of trials the covet thing is a rare time period where you actually see the regulators kind of say okay we're going to try this thing i don't think that's going to be the defacto situation so a lot of these things i'm talking about unfortunately they're going to have to go through real tests with people and we're going to have to see how they play out and sometimes they're not going to work and they're going to cause bad side effects and the ratio is going to be too high and whatever that researcher is is going to have to start all over again and they're going to basically have to scrap it i think something like 500 chemicals that we come up with or molecules we come up with put in the body something like one actually hits the commercial marketplace now you can decide if the ratio is hundred to one or a thousand one the point is it's a lot there's a lot of failure in that process there's a twitter account that's something like research and mice or something and it's almost like a joke it's like everything that they say is research and mice they keep on tweeting it but the joke is obviously that like most of those things are not going to do anything for us we're not mice so it doesn't really do great for us i don't even think people care that much about mice but we have to try something and you can't do baboon research that easily that's very difficult and it's very ethically questionable how much you should do at that level so a lot of this stuff's just going to have to be tested unfortunately and the culvert thing has been great in the sense that like we have at our hospitals in the city for example a ratio of the people that have side effects so far versus in the actual virus and it's like it's massively low the amount of side effects there are it's kind of it's so low that many of these side effects are basically higher in the population that doesn't have the vaccine than they do from the actual vaccine in other words they're basically baseline noise so that's a great sign i was nervous about that i'm like what if they release this thing and the ratio of side effects ends up being massively high it's going to set back that field for 50 years probably kind of like fukushima did to nuclear it'll probably take decades the fact we made it this far is really really promising every doctor that i know that's in that space geneticist people are very happy as to the overall statistical results of this process so far there's going to be testing i was just talking to a friend earlier and it brings in the complication of it's this is not in a bubble this is not isolated to doctors and researchers you've got insurance companies who come on let's be honest about this i'm not going to paint them all as evil but let's not even use a pejorative term they're looking at this from a business point of view which i understand it's like i've even used it as an example when trying to explain factor investing i say okay so if you think about an insurance company and there's one that bases everything your rates bases on all of the actuarial tables and your medical results that company's going to give fairer overall rates to everybody versus a company that says hey tom your dad died of a heart attack at 42. so did your grandfather your mother's side where all died of cancer but you're such a positive guy we're going to give you a 10 million dollar policy that company's out of business so i totally get the business aspect of it but you know so much more about this than i do and are they serving as like a just like a big thumb on this thing or no you mean i'm pushing mrna research forward or on the vaccines in general or just no no pushing the research forward the insurance companies i don't think have research arms i think most insurance companies still use windows 98 like they're not living in the modern world and by the way as a doctor it's very easy to bash on insurance carriers but it's like basic human nature you have a friend let's say you make more than your friend your friend's struggling you give him some money all right he pays you back next time you give him 500 bucks the guy goes and buys a pair of 500 sunglasses and you're like [ __ ] that's not good i want you to have some level of freedom but there's a limit and i'm like how long can i go so there's a whole process of insurance that people do not understand that's a very very touchy thing which is that people want freedom which i agree is very critical of course freedom's never free freedom always costs somebody something to breathe every day your diaphragm has to move which basically means you need atp which means you need energy and the energy has to come from somewhere to live you have debt and that debt is in the form of calories at your diaphragm primarily your exterior your respiratory muscles create so that's kind of come from somewhere and whether or not the financial system covers all the nuances of that or not is irrelevant in the sense that you'll never capture all of it there's always external kind of consequences so insurance companies generally tend to wait to see what the government and medicare and everybody wants to do medical technology in the u.s or most countries what you need to do is realize the regulators need to pass this and then it's got to become a code that you can bill to the insurance carriers that they'll accept so typically medicare and cms which is the government will set up that code and say this is now the new code that you can use this is a valid kind of form of treatment for xyz once that goes into effect united healthcare ghi and all these people usually fall into line almost immediately very rarely do they say nah they're just kind of like whatever the government says will accept it now from a financial perspective obviously a lot of the people chiming in on this stuff on the internet i can see are work from home individuals which is great by the way i'm 100 supportive of decentralization of information get people working everywhere [ __ ] put people in the sky people in the sky connect them to the internet and let's start decentralizing this totally makes sense but brick and mortar is going to exist people are going to own restaurants people are going to have parties people are going to have medical practices where you have to physically be seen etc that cost i don't see talked about on the internet at all i've seen very little people on twitter actually say well what do you think people are doing in brick and mortar businesses so if anything there's pressure from people in brick and mortar there's a lot of pressure there like we got to do something because if we don't do something we're kind of living on the fritz here like every other day my entire staff's getting tested for covid this is kind of unsustainable i'm like how are we supposed to know when it happens as soon as somebody tells you somebody may have had kobe i can't wait two days now to make a decision i have to basically immediately say stop everything call everybody tell nobody to show up to the office get everybody tested again there's only so many cycles of this normal person can have before this starts to affect you so i think the pressure comes a lot more from them than it does from the insurance carriers i think the insurance carriers are almost five to ten years behind on these types of things in the sense that they kind of lag what's happening in real world now united healthcare is an exception to the rule because united healthcare has been gobbling up medical practices in the northeast they basically own pro-health through a subsidiary and so companies like that obviously know and they have a lot of data so i know they know what's going on and i know that there's debates internally there for sure where they're like how much longer can we do this before we start squeezing premiums and start creating a premium differential and i don't really see any other way around this and the reason i say that is because we're not living in a world where the us is the only country this type of thing is going to have implications for decades in terms of which countries have more resources which countries are running a bad game running behind somebody puts this behind them and moves on they have a much better chance of success than somebody who's got companies that have 10 15 margins and their revenue is off by 30 by the way the math doesn't work very great if your revenue is down 30 you have a 15 margin so i think that people are sometimes not being realistic about what is going to happen and part of my rule of life is don't fight things that are gonna happen when you know that that's the way that gravity's pulling and so that's true the nft craze like i don't fight the nft craze i don't fight this thing either it's the way that things are going to work because the world's competitive and people are going to make competitive decisions and if you're dealing with this kind of stuff in 2023 and your competitor has put it all behind them then you're going to get destroyed and so by the way there is one guy that i thought was amazing one restaurant guy in california said i'm only going to allow people who come in that say that they have not had the vaccine that's the first guy i actually respected about the argument because i'm like you're putting your skin in the game do i agree with it bad decision probably but you want to do that do it you take the financial hits you deal with the people yelling at you you deal with those things that is almost to me an honorable thing to do in some sense like pick a side in life and put your skin in the game and then you can say but a lot of what i'm seeing online sometimes it's just like i don't know we should do things this way oh but by the way i won't be affected at all i'm gonna be sitting on my laptop drinking beer on the beach let the rest of the world burn while i stole some apes and like that to me is like that's getting a little cheap you got to put in some skin of the game so i do think to your point to wrap that up the insurance companies i do think are slowly going to push on this a little bit more aggressively at the congressional level they're going to start eventually trying to create a differential just like with smoking so there's like three different areas that what you just said i want to pull on a thread the first one though is as i'm listening to you i'm sensing an arbitrage opportunity and in that i mean what about the people who don't need insurance is there an opportunity here for some like really really smart people working in biomedicine to like come up with things that they're like no insurance we'll never take insurance this is a cash only do you see that as an arbitrage opportunity here i think so i think you can always have catastrophic layers of insurance so you can always create a catastrophic system where it basically says look you're going to have like a 20 000 deductible essentially it's not a real deductible you're just going to pay cash every you're going to pay 10 20 000 a year if something bad happens if you go to the hospital you're going to get covered at the hospital now the reason i brought that up is because at the hospital level things start to add up very very quickly even if you have 20 million dollars you have a bad car accident you have three or four people in your car it can become a percentage of your net worth very very quickly and so it's really kind of like one of those things where on that end of things there's two problems the first problem is you're probably going to need the layers for almost everybody except for a few billionaires or people that are going to just pay for everything most people are going to probably need some catastrophic levels the other problem is and this is like a very frustrating thing is that people tend to have this weird thought process that if you do everything right in life you're going to be healthy so the way you always hear people talk about it it's like my grandmother is 80 years old she's always been healthy nothing's ever happened to she's been great her heart's been fine everything and all of a sudden she died of a heart attack i don't even know how that's possible and it's like yeah because what's happening on the surface is not what's really happening inside of your body there's no such thing as a perfectly healthy body in the sense that entropy is trying to rip everything apart and make it random and you're taking energy to keep these structures alive you should be happy every day when you wake up it's like holy [ __ ] i'd beat entropy another day screw you but like the thing is like people assume like well if i do some dead lips and i eat a bunch of steak that's going to work out and someone else said no you got to eat a vegetarian diet it's like you could go to the hospital you can look at 70 80 year old people and there's people who've done everything perfectly and didn't really work out that great for them and there's people who literally like drink coca-cola eat ham and cheese and egg mcmuffins and they have 150 billion dollars the name is warren buffett and they're 90 plus years old and so like the ratio of how much you can affect your own health is actually a lot less than people think it really is it sucks to say that because i understand it feels good for people to tell themselves like all this stuff i'm doing no but you go to the hospital it's not like a bunch of weight lifters are just crushing it in the icu they're like this guy who's been pressing so much he's going to rip out the intubation tube and come back to life because the strength is developed it's not how it works your body has a lot of capacity which is incredible unfortunately humans have decided this last economic cycle to not build that capacity in their supply chains thankfully our body supply chains are incredible you can lose a third or almost an entire logo half your lung essentially and be fine you can lose about 20 30 of your liver and be fine maybe even 40 you can literally be born without one kidney and just have i mean without two and have one kidney you could be fine so we have these redundant systems built in and what that means is when you see a decline of processing in your body in an organ you don't actually notice that it's dropping constantly because you have this reserve built it's only when the reserve goes out that you actually notice that something got bad the problem with this idea of the arbitrage of insurance comes down to is like you would have to get a really good sense of how your body is really doing number one number two you have to kind of predict what happens in the external environment which you can't do you don't know that the person who thinks they're really healthy is going to have cancer or something tomorrow an endocrine problem tomorrow and one of the things i love about being a doctor is because i know that it's changed the way i view the world i don't sit around every day being pissed off about things because i understand that i'm lucky every day that i can get up and things are going well that i'm lucky and it doesn't depress me either because i've also learned just the way that life is i didn't do anything special to be born i was important and so i should be thankful for that for the best ability i can and i think the one of the things that you're seeing now in the us and i'm sure it happens people are saying well if you eat poorly and you're obese why should you get health care or if you've done this and you've got cancer well look cigarettes everybody knows cause lung cancer but twenty percent of lung cancer well ten to twenty percent different time calculated are not from people who smoke any cigarettes and that number is going up as the number of smokers are going down so i think one thing i would say is if we had that system in place it would probably help out a lot of people i'm 100 support of the system i just don't know how to do it i mean in new york state insurance for a family is like 35 000 a year basically i paid 2800 a month for me my wife and a baby none of which have any serious medical conditions at all and we're basically in our young 40s and so i think in the long run that would be great but there's a lot of regulatory things that we'd have to get to make that really work but it's a great point and we are so incredibly simpatico on the way that we choose to look at life it's like every night when i go to bed i say thank you to the universe i'm not a religious person i just put it out there because it's also really reminiscent of kind of a mixture of the stoics and taoism's concept of wu-we why are you going to fight to swim against the tide when you can swim with the tide and i try to get people to understand this you understand it intuitively it's like we're living here this is the way that tide is going you can scream and you can rant and you can complain and say this isn't fair it's not going to change the tide nope and so if you put yourself in alignment with the tide things just get so much clearer and so much easier and it just baffles me that more people can't i mean this doesn't seem like a complicated concept to me am i wrong i think a little bit in the sense that it's not wrong but the problem is like you go back to humans and you figure like let's say there's a hundred thousand years of humans let's go 100 000 a million years of humans roughly genetically and then 10 000 years ago they're like let's go into agricultural plane so roughly one percent of evolution of humans has been in the agricultural plan where you sit and you plan things the prior time from that period is basically just go and figure [ __ ] out go get some food eat the food have some sex have some fun dance around go get some food do this in cycles and so the goal of humans has always been just to get what's needed to survive essentially the excess that we've created which is all of society today is the world that we live in and that world has no bearing on really the reality of what the organism really means i think what we're talking about here is the fact that the reason people are fighting the tide is because traditionally there was no real time if there's food over here you've got the food you're hungry you're not debating these types of things when you're hungry you're not fighting the system and somebody's like there's some water you're like i want to get the water they're like well then you're going to die your body is going to take care of that for you and you're going to walk over there and drink the water as soon as you have the option to walk away because you have your water you've got your food then like everything else becomes kind of this is a synthetic fake reality versus most biological organisms where i was in santorini on a boat tour on the back of santorini there's a guy who left his wife disconnected from the reality and lives on a rock there and basically spearfishes and he interacts with tourists occasionally that come and go and i'm thinking about it i'm like he technically has everything and he's living fairly long a guy's in his 60s now and i'm starting to realize like all these financial people you need to have 30 x expenses roughly to have a four percent withdrawal rate i'm like but the expenses are literally like rice and beans you don't even need a house and then i was like man homelessness is really bad from where i sit but then i'm like but people were homeless for a million years so like i'm not saying that's how it should be today but the point i'm trying to say is the fact that i think that's how it should not be today is a synthetic layer of reality and placed upon the base reality so i think that's why people fight these kind of ties a lot of the time because they're not the real tides nobody's fighting when a flood is coming and it's right outside all of a sudden they're on the roof you'll see people all the time they go to the roof it's the other part of society that we've created is kind of like abstract informational layer that we've created now some people start to understand this as they dig deeper into the information as you start going deeper and deeper into the layer you start to see how things are connected and then you start to have these senses of things like buying puts before 1987's crash and then accidentally selling them like right before as well that's when you start to figure these things out and then learn later how to not to repeat those mistakes but i think that's what i find interesting about you and a lot of other people a lot of the people that have figured this out have figured part of this out because they manage people they've built businesses and the businesses beat the living [ __ ] out of you and then you learn some people have had children and the children beat the living [ __ ] out of you and so you start to learn but i think it's like somebody told me like if you have seven kids it's like everything's great you don't fight anything you just go with the flow somebody [ __ ] over here somebody did this over there and just go with the flow because like the first kid is painful because you have to actually think through stuff you're still thinking you're still planning i think that's what's going on in a lot of the world and i think if you take my analogy further you'll find a lot of this happening in society so the memetic theory that you guys said everybody's talking about the gerard it's like people mimic other people because you already have the basics and the basics we have to mimic anyways because everybody needed atp so all of the stuff we needed in the beginning was the same stuff it's h2o it's food and it's some level of shelter and so we always needed the same things we always look to each other to help us find the same things once we got all those things now you got this other world it's like what are we supposed to do in this other world which is completely detached from what you need to survive i think that's putting a lot of people in existential crisis that's what i really think is happening and i think that's the reason that people really wealthy countries suffer from more depression and different types of things some of it's also because it's just not picked up meaning four countries people are not checking these things out maybe it's carefully but i think that's part of what's going on with all this stuff that is absolutely brilliant from my perspective because bang on about listen human os the base code is absolutely right it's for hunting and gathering and to be really good at that so it sets up all of these arbitrage opportunities which we've talked about at length arbitraging human behavior is the only sustaining arbitrage edge i believe because we evolve so slowly that we're not going to see it even your congratulations on your new child but they're not going to see it i don't think no probably not and so what we have existing side by side i love the way you put it we have cumulative cultural evolution aggregate cultural revolution which [ __ ] rocks it is like our ability to have this conversation via zoom the iphone is what tend to whatever power more powerful than the computers that put us on the moon and so humans are very adaptable but when things start happening and this is kind of my thesis with the great reshuffle when things start happening really really fast they do go into existential crisis because we are moving into a world where abstraction is increasing not decreasing i always say i'm a rational optimist that doesn't mean i think everything's going to be good it means that no quite the contrary this progress is probably going to form some new problems and we'll deal with those but that's such a great thesis setting ground because it puts it in a manner that is instantly at least to me understandable and graspable it's like okay so that happened this current version of humanity what we're looking at not even a minute on the overall clock of the history of humanity and so so far so good we're doing things pretty well are we [ __ ] a lot of [ __ ] up too yeah of course hey i think it's gone pretty well so far it depends on your view it depends on how you look at these things but like at the end of the day if you think about how much more work and how much chaos existed for most people for most of time people like someone like a random person could not just click on like their thumbs and food comes to their apartment like 20 minutes later and it's like insane like during cobin i'm like literally felt many times i feel like this is probably what it feels like to be a king because i'm literally buying stuff and yeah i'm annoyed that the fees are 15 but it's like that's still insanely small relative to what's happening in the background for me to get this food to my house now the fascinating thing about humans is we'll never get away from abstractions because the way we were hunting and gathering was abstraction based and the reason we know that is because most animals tend to stay in a certain type of area in a certain environment humans just went everywhere and they're like all right we'll go over here we'll come up with jackets we'll go over there we'll take off that clothes we go over into the water we'll figure out how to swim we'll teach other people a swim we'll make spheres that actually work better in the water so we've done a lot of modeling of the universe our brains are basically essentially modelers of the universe and we use slices of reality and patterns that exist in reality to basically model what we think is going to happen next and we share that information with each other and the models get better and better and better and better you can kind of see just from the arc of humans in a basic society with a hundred people for example you get information from elders they give you information and you basically are passing this along that is algorithms that have taken millennia solely over time to accumulate their abstract algorithm models of reality the fascinating thing is we started using writing and that really screws everything up in a good way and a badly because one thing is like who gives a [ __ ] what your village elder tells you when you've got writing from the best village elder on the planet your village handler sucks he's not einstein he's just one and a hundred you got a guy that's one in a billion okay now so the first thing i think is writing starts to detach people from getting information from their friends from their family not to listen your mom you go to the internet and you can figure out what your mom's wrong about so that's the first kind of step of detachment of humans from now you're not just an abstract mind now everything the information that's going into you can come from a distance it comes from an abstract world essentially it has no bearing on physical reality then you can look at the industrialization which is essentially converting our physical output into an abstract output in other words when your finger presses a button the amount of energy you use is much less than the output that the machines can do along the way so now you've essentially moved yourself out of that process now you look at the middle so there's input which is like i'm saying writing is basically a way to get rid of traditional means of information from people verbally and output which is industrialization factor is our way to abstract out your physical output now computers are doing the middle part the processing we're like we're now going to do the middle part we're going to get rid of that so you literally find a system where we essentially have stepped out of the entire input processing output chain now we're all just hanging around like listen you have a digital rock does anybody have anything that they can give me that would make me excited for a second everything else is done so like i do think that the more you automate this universe out and you just automate stuff kind of like that movie wall-e i think the guy is like sitting in a chair it's like yeah that's gonna happen and everybody's gotta figure that out on their own as to how do you deal with all these things disappearing out of your life what are you gonna find interesting the common thing you hear today is follow your passion well passion's all [ __ ] and i'll tell you why it's [ __ ] and i'm not against it by the way i'm for this but it's also [ __ ] the reason it is everything people say they want to do is stuff that didn't even exist for most of the time i'm like oh i wish i was an electronic music producer instead of it there's not even such a thing as electronic music producer that's a human created system that i've walked into and i'm like i want to be this guy and this group of in this video game i want to play this character that's really what following your passion is it's like in this video game what character would you like to play that's what we're seeing that's not really the reality of what exists so we're creating a fake theatrical world kind of that we're living in i think it's awesome i mean i think this is kind of inevitable i think if other animals stumbled upon this they would end up in the same place if you have a bunch of beavers making dams and one of them has a higher more efficient method to make it and he can write that down automate that thing and then put that output to all the other beavers all of a sudden this guy's going to capture share the other one's going to disappear it's going to be a matter of time they're living in this abstract world and how can we make it a little bit better we can fine-tune this well that last one knocked down that was a five standard deviation event maybe we could stack it up more somebody on the side is gonna be like let's do some derivative trades on this guys i can't build them but i could do some trades on the side maybe we can collateralize the dam this is just like inevitable kind of stuff i think that we're bound to have happen which is why you just gotta enjoy it be happy that you get to see some of it because it's hilarious i mean it's much better than like fighting physically fighting and dealing with this stuff so as you know i'm very sympotical with that attitude but it also leads me to something that we chatted about before we hit record that i want to get your thoughts on so i back in a very very small way a artist's non-profit and it's called gallery firth i think a man's name is dan foster the son of a great friend of mine he graduated cooper union really really talented artist and like he pitched me years ago on this idea of like getting a cooperative space where artists can work together at a non-usurious rate and so he's got this space that cost him virtually nothing and it's on 21st street so it's very hip old building big windows perfect for an artist and he was here over the weekend giving me an update and i found this fascinating so he's maybe 23 24. and so he brought his partner who had not met a tattoo artist expert and he understands that it's going to take him 15 to 20 years as an apprentice to a real tattoo artist before he can actually kind of like stake a claim there and so first off i was really impressed by the willingness of this young guy i get it it's going to be 15 years but here's what really got me they have no social media footprint at all they're not on instagram they're not on twitter they are not on any of them facebook and this is an intentional strategy and he's like what i decided was it's gonna be cooler now to have events that are only word of mouth they don't even print a flyer their most recent event 200 people showed up and he was talking to a woman from nyu she's a student at nyu and she's like going on to dance she's like saying do you understand how my social capital like soared because of this what do you think about that first of all it's cool i love when people do different things but part of it is i think i partly telling you before we started like just the concept of people who are young wanting to do things that people are older tell them not to do so whatever becomes in vogue there's always a rebellion against that process and i think part of that might just be like an inherent thing in humans that during the times when you're a teenager and you're becoming a young adolescent there's kind of this like simulated warfare mindset that's going on that probably was there for a reason for a long period of time so i think there's definitely some of that going on it's like whatever everybody's doing is not going to be cool anymore if you do it we know that happened with facebook we know that happened with facebook where as soon as parents started joining it people left and went to instagram they went to tiktok they went to snap all these things so that's one part of it the other part of it is just like good strategy so like i always think about this you have like a school of fish let's say you have a thousand fish and they're all going in the same direction if you ever watch them they basically move almost mechanically together at a certain breadth and width and they go to this whale carcass or whatever the hell they're going for everybody's going for that now nobody knows how much material is gonna be there before you get there in theory you should have one tenth if there's ten thousand you should have one ten thousand what you need when you get there now if you break away from that group while everybody in the ocean is distracted on this one thing all you need is a couple crumbs you don't need a lot of stuff you don't need a whole whale carcass so my strategy in life's always been like wherever the group is going i know exactly what i need it's not that much i don't need 10 billion dollars i need x if i can go in my own direction and find x it'll be fine there's going to be enough for me in this direction so that in general is a very very smart strategy i immediately knew that when these articles about new york being dead were coming out i was like that is definitely going to happen people are going to go back to warehouses people are going to go to large spaces people are going to go to butch with they're going to throw they're already doing that anyways but there's always been underground raids for a long period of time and you kind of think of that as like it's almost like inevitability essentially like in other words like now everybody's online so it's like how cool is it to really be online but i think it's great i think that now that everybody's talking about cities dying and people are moving to the suburbs i think what's going to happen is a lot of physical space fun is going to be happening there's going to be a lot more concerts when we start to reopen there'll be a lot of events that are going on and i just think that's the pendulum of life of the human cycle and i'm glad that it's happening because i don't think that just staring in front of a two-dimensional screen is the fullness and richness of all that life is i hope that's not what the entire thing is that one time i went on the metaverse to meet you and i saw the wind i was like this is a pretty cool thing and so i hope more people get to see some sun and some wind in the next decade but it's also very promising because it also tells you that amongst the youth like they're not necessarily buying into this idea that the only way forward is to live in this digital reality that would be a little bit of a hell escape to me like i'm thinking about my oculus if i put the oculus on and i'm young and somebody says something to me in the real world that's annoying as you get more power you can start to shun people that are annoying to you further and further away i've been thinking about this a lot money and means allows you to basically disintermediate other people in life so divorce is related to wealth in societies as women have some access to money and men have access money they're able to split and go different ways so like one of the things i think about is like what's the end result of something like that if you get annoyed with somebody then of course if you don't need them anymore to get your food your basic day to day you know it's like i'll just kind of delete this person in my life before you know it you can create a bubble of just you and yourself without anybody else you have to talk to now if you got into a virtual world you got even a bigger problem because in a virtual world you might be able to create some of your reality yourself so what are you going to do you're going to create avatars or people that annoy you that disagree with everything you say no you're going to create people that want to make you the king or the queen in that world and so eventually what's going to happen is you're going to become a wall-esque kind of individual that essentially has created this essentially a prison for yourself that's a very pleasant prison but to know that young people are saying no no that's not the only direction there's another way that's a really positive promising thing i think that means that a lot of us that talk a lot on the internet might be wrong about some of what's going to happen in the future that maybe things are going to bifurcate a little bit more and we're going to have both realities kind of running at the same time well again there's a reason why we get along so well i think that that is absolutely right it's like when we met in real life it's just you honestly cannot describe it in a short phrase i mean reality is completely different but there's so much more interesting things going on there and so i don't see like i'm a big fan of what will happen particularly on the business side of things from the digital worl

2021-10-24 16:15

Other news