infinite loops

Max Arbitrage – Healthcare, Investing & Biology | Infinite Loops

Key Takeaways

  • “If you’re comfortable on Twitter, then you’ve obviously warped your mind”Max Arbitrage
    • This isn’t inherently good or bad, but it’s completely irregular to the rate at which we socialized and processed information for millennia 
  • “The thing I’ve learned about narratives is that they work out best if there’s no reality behind them”Jim O’Shaughnessy
    • If you can empirically compare reality to the narrative, then it’s too easy to disprove the narrative
  • “If you start ranking the hierarchical levels of standard deviation for risk, what you basically find is that people who make a lot of money and work their way up the chain essentially act as shock absorbers in the system for larger amounts of volatility”Max Arbitrage
    • People who are risk-averse tend to value peace of mind more than the potential for exponential results 
  • Distractions are probably the number one reason today why people stagnate in life
    •  The entirety of mankind’s knowledge is on the internet, yet most people only use the internet for entertainment

Intro

  • Max Arbitrage (@max_arbitrage) is the name of his anonymous Twitter account and in real life, he is an investor, entrepreneur, and a top mind in the healthcare industry
  • Host: Jim O’Shaughnessy (@jposhaughnessy)

Information Theory

  • Understanding of the world is presented through different fields like mathematics or biology, but in reality 
  • “If you’re comfortable on Twitter, then you’ve obviously warped your mind”Max Arbitrage
    • This isn’t inherently good or bad, but it’s completely irregular to the rate at which we socialized and processed information for millennia 
  • “Twitter is only good if you take the next step, in my opinion, and the next step is to get to actually know people that you enjoy and banter with” – Jim O’Shaughnessy
  • “It seems like we might all be descended from one single piece of information that’s been iterated over and over and been A/B tested billions of times. And if you think about information theory that way, then a human can’t actually die because the information is its own beast, its own thing, and it’s wearing us like clothing.” – Max Arbitrage
    • “I used to think of things like soul and these kinds of concepts and thought, ‘that’s crazy,’ and now I’m thinking about information theory and it sounds basically like what everybody was saying in every religious book”
  • The problem with analyzing humanity through information theory is that it cannot fully explain things like war
    • According to information theory, war is just a test to determine the more effective algorithm in which matter is organized
  • “There’s no such thing as survival of the fittest” – Max Arbitrage
    • What actually occurs in nature is the death of the weakest, not survival of the fittest

Shannon Limit

  • The Shannon limit is a computer-science concept which was originally the rate at which data can be sent without error
    • When applying it to human data processing, some people believe that we have reached the limit at which humans can process information
  • Max’s problem with this idea is that it only looks at individuals and not the processing capacity of groups and the systems which they create
    • “Are we past the limit personally? I think we’re way past the limit of the normal person to handle information and you can just sense that in the way people get information and pass it along.” – Max Arbitrage
    • But when it comes to groups, such as society as a whole, we haven’t even approached our limit
  • On a societal level, most information is useless and eventually forgotten

Narratives

  • “The thing I’ve learned about narratives is that they work out best if there’s no reality behind them”Jim O’Shaughnessy
    • If you can empirically compare reality to the narrative, then it’s too easy to disprove the narrative
    • This is part of the psychological basis of speculation
  • This doesn’t only apply to markets. Aligning yourself with a political party or ideology is also a form of speculation.

Human Organization

  • “Humans are obviously much more like insects than any other mammal, the only difference is that we’re modular. We can change the program of our society.” – Max Arbitrage
  • “We’re not an individual species even though we think we are. If we were an individual species then we would all still be hunting.”Max Arbitrage
    • The vast majority of people in modern society exist off of the labor of others
  • If we are an individual species, then why do different people have different capabilities which together align synchronously? 
    • For example, some people seek out massive amounts of volatility (leaders) while the majority of people are risk-averse (followers)
  • “I was searching for any human society in history that did not have a hierarchy. I came up empty.” – Jim O’Shaughnessy
    • Even hunter-gatherer tribes that still exist today have hierarchies 
  • “If you start ranking the hierarchical levels of standard deviation for risk, what you basically find is that people who make a lot of money and work their way up the chain essentially act as shock absorbers in the system for larger amounts of volatility”Max Arbitrage
    • People who are risk-averse find greater value in peace of mind rather than in a potential for exponential results 

Cancel Culture

  • The people who subscribe to cancel culture generally spend more time interacting on social media than in real life
  • From a purely economic perspective, cancel culture is extremely pragmatic for its adherents because it eliminates people from the job market in areas which they wish to enter

Learning

  • Max found medical school lectures so impractical he paid his classmates to study from their notes
    • He learned the same information anyways, so why is it necessary to physically show up at a lecture hall?
  • One of the problems with education today is that everybody is forced to learn the same thing in the same way
    • We don’t factor for people’s inherent interests and talents
  • Distractions are probably the number one reason today why people stagnate in life 
    • The entirety of mankind’s knowledge is on the internet, yet most people only use the internet for entertainment

What Two Things Would You Do as an Emperor for a Day?

  • Inform people of the interconnected nature of mankind so they will be more loving and forgiving
  • Create a government position called Secretary of the Digital as the digital sphere will only increase in societal prevalence 
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Notes By TD

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