Writing by Leon Lin on investing, technology, systems, and how things work.https://leonlins.com/enhttps://leonlins.com/writing/art_history/https://leonlins.com/writing/art_history/Different definitions of art over history I started learning art history a while ago, to better understand what I was looking at in museums. That turned into learning how to draw, to better appreciate art history. With the recent non fungible tokens (NFTs) trend, I wanted to share what I learnt about art today, and then discuss NFTs in a follow up post [^1]. 1. What is pure art? I've been primarily using smarthistory to learn art history, though the video that kick started my journey was this…Sun, 02 May 2021 00:00:00 GMTLeon LinCulturehttps://leonlins.com/writing/community/https://leonlins.com/writing/community/CAC to lower your CAC Takeaway Investing in communities is a popular trend now; communities have always been at the center of how computing and the internet developed. Communities in tech We’ve seen increased interest and investment in the community space recently, both in community platforms themselves and the software tools that support them. Community as a concept isn’t new, whether that’s customers supporting a company or fans providing feedback in forums. The more engaged (fanatical?) your…Sat, 17 Apr 2021 00:00:00 GMTLeon LinCulturehttps://leonlins.com/writing/algo/https://leonlins.com/writing/algo/How can we apply algorithms to improve decision making in real life? Takeaway An algorithm is a defined process to follow to get a desired result. Much of our lives are decided by algorithms. Knowing what algorithms to follow can result in more efficient and effective decision making. Algorithms in life I recently re read Algorithms to Live By, a book by Brian Christian and Tom Griffiths on how algorithms can help us be more effective in our lives. Having picked up programming last year, I got…Sat, 10 Apr 2021 00:00:00 GMTLeon LinRisk & Decision Makinghttps://leonlins.com/writing/ergodicity/https://leonlins.com/writing/ergodicity/Why the difference between ensemble and time averages matters for investing and risk Takeaway Knowing whether a process is ergodic or non ergodic is critical in knowing how much risk to take. Investing and wealth are non ergodic processes, which imply that our first thoughts on expected values are very wrong. I've heard about ergodicity before, but wasn't quite able to understand it until I watched this video by Ergodicity TV. It's an important concept but seems more widely known in physics than…Sat, 03 Apr 2021 00:00:00 GMTLeon LinRisk & Decision Makinghttps://leonlins.com/writing/data_landscape/https://leonlins.com/writing/data_landscape/Market overview, risks, and competitive landscape Takeaway I had to put together some analysis on the data pipeline industry recently, and thought I should share it out. We'll go through: 1. a market overview, 2. risks, 3. companies involved at each stage 1. Market overview The data pipeline industry has a TAM of $100bn, with some companies alone valued close to that [^1]. Since data pipelines are a broad area, I'll restrict discussion to sectors more relevant to data analysis. A mix of public…Sun, 07 Mar 2021 00:00:00 GMTLeon LinTechnologyhttps://leonlins.com/writing/inflation/https://leonlins.com/writing/inflation/Causation, measurement, and adjustments Takeaway We probably know less about inflation than we believe we do. What I don't understand about inflation I don't understand inflation. I get the concept of prices rising, sure. But for the longest time I haven't understood what causes inflation, how to measure inflation, and how to adjust inflation. I also have a feeling nobody really knows either. That's ridiculous, you might say, there's a whole group of people out there making policy based on…Sat, 06 Mar 2021 00:00:00 GMTLeon LinInvestinghttps://leonlins.com/writing/monopoly/https://leonlins.com/writing/monopoly/Are there really that many monopolies? Takeaway Natural monopolies are rare, and regulation usually hurts more than helps in fixing that Winner takes all? Josh Breinlinger, a VC at Turtle Ventures, has a short post on his site about how most marketplaces are not "winner takes all": I'm inclined to agree. We hear about "winner takes all" all the time. Which begs the question, why aren't there more monopolies? "But wait, aren't there tons of monopolies?" As defined by having a single player with…Sat, 13 Feb 2021 00:00:00 GMTLeon LinInvestinghttps://leonlins.com/writing/minmax/https://leonlins.com/writing/minmax/Some skills in life have dramatically larger variance than others, which is helpful to know when deciding how much more effort to put in on the margin. Takeaways Some skills in life have dramatically larger variance than others, which is helpful to know when deciding how much more effort to put in on the margin. Skill ceilings in life I played a lot of role playing games (RPGs) on the PC when I was younger [^1]. In RPGs, you control a character that grows in strength over time as you complete…Sun, 07 Feb 2021 00:00:00 GMTLeon LinRisk & Decision Makinghttps://leonlins.com/writing/gambling_size/https://leonlins.com/writing/gambling_size/The difficulty of behavioural edge Takeaway Behavioural edge in investing comes from being able to do things that are unpopular. Everyone loves to gamble, the more important thing is to size your risk appropriately. Behavioural edge and why it's difficult John Huber likes to divide the "edge" you can get in investing into three main sources: 1. Information advantage you have more/better information 2. Analytical advantage your analysis of that information is better 3. Behavioural advantage your…Sat, 06 Feb 2021 00:00:00 GMTLeon LinRisk & Decision Makinghttps://leonlins.com/writing/plaid/https://leonlins.com/writing/plaid/Plaid abstracts away the boring financial plumbing, enabling others to innovate faster. Takeaway Plaid is a financial technology company that helps other companies connect with bank data. By doing the boring stuff others don't want to do it makes life more convenient for everyone else and becomes a highly sticky product. 1. Abstracting away layers of work I'll be discussing the financial technology company Plaid today. Before that, it would help to get some intuition on abstraction and…Sat, 30 Jan 2021 00:00:00 GMTLeon LinTechnologyhttps://leonlins.com/writing/nonviolent/https://leonlins.com/writing/nonviolent/How to improve relationships and get what everyone wants Takeaway Communicating nonviolently by observing feelings and needs will help improve relationships and reduce chances of people feeling threatened, making it more likely for everyone to get what they want. Nonviolent communication for better relationships I once unintentionally implied a friend was bad at math, and she's never let me forget it. Makes you wonder how many people I've offended accidentally. For a supposedly intelligent…Wed, 06 Jan 2021 00:00:00 GMTLeon LinCulturehttps://leonlins.com/writing/practice/https://leonlins.com/writing/practice/How to improve your improvement process Takeaway Improving your process involves mapping out the steps, knowing what to include or exclude, having both theory and practical experience, and repeated experimentation Another look at process improvement We started out the month looking at art, and there's a reason for that. Art is high skill, low luck. While it's possible to create great art without much skill, most art is crafted intentionally. Since you start from scratch, every element is there…Wed, 23 Dec 2020 00:00:00 GMTLeon LinSystem Designhttps://leonlins.com/writing/art/https://leonlins.com/writing/art/What's stayed the same and what's changed in art history Takeaway Comparing the works of Titian, Dominique Ingres, and Manet show how artists have influenced each other and rebelled against tradition over time. Looking at Titian, Ingres, and Manet December's a convenient time to do reflections. Like prior years, I'll be doing a more comprehensive reflection on the year in the monthly post. I'll spend the weeklies highlighting new topics I've learnt about this year. First up is art history. I…Wed, 09 Dec 2020 00:00:00 GMTLeon LinCulturehttps://leonlins.com/writing/kelly/https://leonlins.com/writing/kelly/Using math to estimate optimal portfolio sizing Takeaways 1. The Kelly criterion is a mathematical way of sizing your portfolio, though be careful with your assumptions 2. HASH.ai is making agent based simulations easier; I try to model startup failure rates 1. Kelly criterion for portfolio sizing Sarah is an aspiring angel investor. Her friends Nicholas, Alyson, and Chase have a magical business idea involving pest extermination, and Sarah thinks it's going to be a huge hit. Sarah was about to…Wed, 02 Dec 2020 00:00:00 GMTLeon LinRisk & Decision Makinghttps://leonlins.com/writing/newsletter/https://leonlins.com/writing/newsletter/What to write and how to promote Newsletters continue to rise in popularity, driven by trends in cost, convenience, and control of the audience. Both amateur and professional writers are publishing independently in order to benefit from the high leverage of working in public. Writing publicly is like buying an option, with capped downside and potentially unlimited upside. We're a group of newsletter authors with a combined audience in the hundreds of thousands, writing about topics ranging from…Wed, 25 Nov 2020 00:00:00 GMTLeon LinCulturehttps://leonlins.com/writing/value/https://leonlins.com/writing/value/AQR investigates why value investing is the way it is Takeaway AQR looks into the performance of value investing (bad), common criticisms of value investing (invalid), and comes up with their own explanation of why value investing hasn't worked (valid?) Valuations We've talked about whether investment bankers add value (probably?), whether companies add value (less than we think), and this week we'll wrap up the value series [^1] by looking at whether value investing adds value. The paper Is…Wed, 18 Nov 2020 00:00:00 GMTLeon LinInvestinghttps://leonlins.com/writing/company_value/https://leonlins.com/writing/company_value/Choose the people, not the company Takeaway A research paper proposes that you should look to work with strong teammates and not strong companies if you're interested in innovation People vs Companies We discussed middlemen in financial capital last week. This week, let's look at middlemen in human capital. In the paper "Are Inventors or Firms the Engines of Innovation?" Ajay Bhaskarabhatla, Luis Cabral, Deepak Hegde, and Thomas Peeters look into whether we should credit humans or companies more…Wed, 11 Nov 2020 00:00:00 GMTLeon LinCulturehttps://leonlins.com/writing/ib_value/https://leonlins.com/writing/ib_value/What do investment banks actually do? Takeaway Investment banking is rarely about investing, and more about connecting sources and users of financial capital. Investment banking overview I've had to explain to a few people what investment banking's actually about recently, and I figured I might as well do a short primer here as well. Especially given the mismatch between expectations and reality, hopefully this will help clarify things. Investment banking is generally not about investing,…Wed, 04 Nov 2020 00:00:00 GMTLeon LinCulturehttps://leonlins.com/writing/gatekeep/https://leonlins.com/writing/gatekeep/Does the gatekeeper of gatekeepers gatekeep himself? Takeaways 1. Gatekeeping is usually done to preserve individual status rather than group status, and should be avoided 2. Cost of capital and illiquidity spirals are linked in a feedback loop 1. Gatekeeping for group vs individual status You've seen this before. A beginner, starry eyed and bushy tailed, will come looking for advice on how to get started in a subject. And a host of experts will emerge from the depths to tell them it can't be…Wed, 28 Oct 2020 00:00:00 GMTLeon LinCulturehttps://leonlins.com/writing/disney/https://leonlins.com/writing/disney/Two activist investors disagree on Disney's future Takeaway Third Point argues that Disney should stop paying its dividend and invest in streaming; Semper Augustus disagrees. Activism at Disneyland The activist investment fund Third Point recently published a letter to Disney, suggesting the company change their business strategy [^1]. This led to a rebuttal by another investment firm, Semper Augustus (h/t Joe Koster). It's less common for investment firms to provide counterarguments against an…Wed, 21 Oct 2020 00:00:00 GMTLeon LinInvestinghttps://leonlins.com/writing/mtg/https://leonlins.com/writing/mtg/Monetisation and community problems in the oldest trading card game Takeaway Magic: The Gathering is a lucrative card game business that has run into self inflicted controversy due to over aggressive monetisation Cards, Commander, Cardboard crack How much can cardboard cost? If it's the card Black Lotus from trading card game Magic: The Gathering, you might be able to buy one for $27,000. And that might even be a steal, considering a copy sold for $166,000 at auction [^1]. That's $166k for a…Wed, 14 Oct 2020 00:00:00 GMTLeon LinCulturehttps://leonlins.com/writing/polina/https://leonlins.com/writing/polina/What Polina Marinova thinks good writing requires Takeaway Polina Marinova of the Profile thinks that good writing requires good editing, nuance is important, and intentionally emphasises the faults in people Profile of Polina of the Profile As part of a Renaissance Collective X Highlighter collaboration, I hosted Polina Marinova for a town hall recently. Polina writes The Profile, which is where people go to learn from the most successful people and companies every Sunday morning. She…Fri, 09 Oct 2020 00:00:00 GMTLeon LinCulturehttps://leonlins.com/writing/capital/https://leonlins.com/writing/capital/Why you should take more risk today Takeaway The reduced cost of capital now implies a wealth transfer from savers to borrowers, and that it's optimal for a person to be taking more risk today than before. Implications of low cost of capital I want to take a look at cost of capital today. I've been wondering what the implications are of our current low cost environment, plus Michael Pettis recently wrote a good article on interest rates vs growth, so let's look closer at this topic. I won't have…Wed, 16 Sep 2020 00:00:00 GMTLeon LinInvestinghttps://leonlins.com/writing/community_covid/https://leonlins.com/writing/community_covid/Community vs individuality in events, newsletters, and investing Takeaways 1. Virtual events and groups should aim to build community by increasing interaction opportunities. If you aren't in a community or building one, you're probably missing out. 2. Newsletters have trended due to cost, convenience, and control. I share a financial model which you can play with to frame the economics of the business 3. Individuals are becoming more important for private market investing, both as solo…Wed, 02 Sep 2020 00:00:00 GMTLeon LinCulturehttps://leonlins.com/writing/process/https://leonlins.com/writing/process/Understanding the types of process improvement Takeaway Michael Filler and Matthew Realff propose that all processes come from 8 different types of steps. By understanding what steps are available, you can rearrange them to get process improvement. Process improvement is underrated because of its intangible nature. Process vs product If you were asked to compare the object on the left vs the object on the right, what points would you make? One of the first things you'd notice would be the…Wed, 26 Aug 2020 00:00:00 GMTLeon LinSystem Designhttps://leonlins.com/writing/notion/https://leonlins.com/writing/notion/How Notion is literally trying to get everyone on the same page Takeaway 1. Notion is a visual based approach to information organisation and collaboration 2. Notion's greatest strengths are flexible forms, visual based building, and template options 3. Notion’s biggest problems are likely to be quality related, and I give a few marketing and product ideas to solve them Notion workspace for your workplace In the movie Inception by Christopher Nolan, the main characters wander through nested…Sun, 23 Aug 2020 00:00:00 GMTLeon LinTechnologyhttps://leonlins.com/writing/city/https://leonlins.com/writing/city/How picking a city to live in is like picking a restaurant Takeaway The predictions of the death of large cities are overblown and I expect most to recover within five years. NYC is dead, long live NYC An article recently proclaimed that NYC is dead forever. Because of the internet, the loss of business, culture, dining, commercial real estate, and colleges in the city has turned from a temporary situation to a permanent outcome. As a result, the article concludes that people are leaving NYC and…Wed, 19 Aug 2020 00:00:00 GMTLeon LinCulturehttps://leonlins.com/writing/lvmh/https://leonlins.com/writing/lvmh/How Bernard Arnault views creativity Takeaway As the CEO of LVMH, Bernard Arnault believes that star brands require creativity for ideas but control on execution, combined with a blend of past and present Top of the luxury chain LVMH is the parent company of many luxury brands we're familiar with. Formed in 1987 through the merger of "Louis Vuitton" and "Moët et Chandon and Hennessy", it now houses more than 70 brands across wine, fashion, jewellery, and more. Compared to its nearest competitor,…Wed, 05 Aug 2020 00:00:00 GMTLeon LinCulturehttps://leonlins.com/writing/cameo/https://leonlins.com/writing/cameo/One man's trashy is another man's treasure Takeaways Cameo is a company that has taken advantage of the long long tail, realising that a small gesture from a minor celeb can make a big difference to a fan. 1. Cameo and the long long tail Kevin Kelly, cofounder of Wired magazine, coined the phrase 1,000 true fans many years ago. Li Jin recently built on that idea with her 100 true fans article. If you haven't read either, the gist is that an achievable amount of loyal fans (100 or 1,000) are…Wed, 29 Jul 2020 00:00:00 GMTLeon LinTechnologyhttps://leonlins.com/writing/dr_gpt/https://leonlins.com/writing/dr_gpt/or: How I Learned to Stop Worrying and Love the Artificial Intelligence Takeaway GPT 3 is an impressive model of text prediction that generalises to many use cases. I walk through how it works at a high level, whether the hype is deserved, how to detect GPT, and whether it’s going to plunder our jobs. Only human after all About a week ago, Sharif Shameem shared this video on twitter demonstrating the abilities of a new AI, GPT 3 And. Twitter. Freaked. Out. Perhaps realising that their cushy jobs…Wed, 22 Jul 2020 00:00:00 GMTLeon LinTechnologyhttps://leonlins.com/writing/turtle/https://leonlins.com/writing/turtle/Why most companies, even in tech, are bad at innovating Takeaway Companies are not incentivised to take risk, hurting innovation within the company and increasing the likelihood a startup wins against them. Tortoise vs hare I'll take it for granted that everyone's familiar with the tortoise vs hare fable. Hare races tortoise, falls asleep, loses, and spends the rest of his life living in shame before writing an explosive tell all on how it was all a shell game [^1]. Drawing on this post by…Wed, 15 Jul 2020 00:00:00 GMTLeon LinTechnologyhttps://leonlins.com/writing/dividend/https://leonlins.com/writing/dividend/The costs of investing in dividend paying companies Takeaway Investing for dividends has more nuances than might first appear. Return on dividends In footnote 8 of last week's post I made a throwaway remark on dividends mattering less than capital return because I didn't want to spend more time digging into the subject. Today, let's actually dig into dividends. We'll do an overview of dividends, then discuss drawbacks, and end with links to other research that complicates the story. As always,…Wed, 08 Jul 2020 00:00:00 GMTLeon LinInvestinghttps://leonlins.com/writing/stories/https://leonlins.com/writing/stories/On stories, pitches, investing, startups, and why narratives matter. Takeaway No takeaways this time, it'll spoil the story. Stocks have shapes Last month, we discussed one reason your investment pitch sucks: you aren't accounting for consensus. This month, let's discuss another common reason that can be even more frustrating. Consider this company as of Apr 30, 2018: Company X is an internet company, mainly making money off app subscriptions with its monopoly in an expanding consumer category.…Wed, 01 Jul 2020 00:00:00 GMTLeon LinCulturehttps://leonlins.com/writing/zipf/https://leonlins.com/writing/zipf/Using Zipf's law and information entropy in the search for aliens Takeaway Zipf's law and Shannon's information entropy can help us find alien life How can we find alien life? We've talked about how machine learning companies use data to recognise text and how investors use data to pick companies. This week, let's talk about how scientists are using data to look for aliens. Some of the content below will draw from Laurance Doyle's talk with the Long Now group. Framing the problem The search for…Wed, 24 Jun 2020 00:00:00 GMTLeon LinTechnologyhttps://leonlins.com/writing/data/https://leonlins.com/writing/data/The tools that professional investors use Takeaway It is unlikely you have an information edge as a retail investor vs professional; you should find edge elsewhere Using data in investing Last week, we looked at how companies use machine learning to take data, process it, and come to a conclusion. This week, we'll look at a more human oriented process. We'll walk through how analysts at an investment firm obtain data, analyse it, and form an investment thesis. With investors spending $30bn on…Wed, 17 Jun 2020 00:00:00 GMTLeon LinInvestinghttps://leonlins.com/writing/ml/https://leonlins.com/writing/ml/Explaining neural networks Takeaway Machine learning is less scary than you think, and more common than you think. Machine learning magic We hear about machine learning (ML), deep learning, or artificial intelligence all the time now [^1]. From search interest: To mentions in books: To newspaper headlines about robots taking over our jobs: There's increased interest in ML, and it seems that every other day there's a new startup raising $100mm based on their newfangled ML technology. However,…Wed, 10 Jun 2020 00:00:00 GMTLeon LinTechnologyhttps://leonlins.com/writing/relative_billionaire/https://leonlins.com/writing/relative_billionaire/On why investing, technology, and society are all games of relatives, not absolutes. Takeaways 1. Investing is about relative, not absolute performance 2. Technology competition is about relative, not absolute strength 3. Society is about relative, not absolute status 1. Don't bet on the most likely winner Imagine you're an investment analyst [^1]. Investment analysts research companies and decide which stocks to buy or sell. You've done your work on Tencent, a chinese internet company,…Thu, 07 May 2020 00:00:00 GMTLeon LinRisk & Decision Makinghttps://leonlins.com/writing/her/https://leonlins.com/writing/her/The margin trap of AI companies, value investing concepts, and tradeoffs Takeaways 1. AI companies seem more like services businesses than software businesses, implying they should trade at lower valuations 2. The only person that Charlie Munger invests in says investing isn't about being smart, but about thinking like an owner 3. Try to better understand the tradeoffs in decision making AI as a service(s business) I've written about machine learning (ML) and artificial intelligence (AI) before…Wed, 29 Apr 2020 00:00:00 GMTLeon LinTechnologyhttps://leonlins.com/writing/kegan/https://leonlins.com/writing/kegan/Kegan's theory of adult development Takeaway Kegan's theory describes how we can continue to grow as adults and reach our fullest potential. Kegan's theory of adult development Imagine a caterpillar that dies before it changes into a butterfly. Or a larva before turning into a ladybug. We’d think it was a shame that these never reached their full potential. Just like a caterpillar is not meant to die as a caterpillar, Robert Kegan believes adult development theory can help us better understand…Wed, 22 Apr 2020 00:00:00 GMTLeon LinCulturehttps://leonlins.com/writing/keen/https://leonlins.com/writing/keen/Walkthrough and questions about the beta Takeaway Keen is a new product from Google intended to keep track of your interests, though I'm unsure if it's meant to be more social or more idea focused Keen walkthrough I was invited to try a beta of Keen, a new product from Area 120, Google's workshop for experimental products [^1]. Keen is meant to "help you expand your interests", by "staying keen on your interests, getting recommendations, and curating good ideas". Let's take a closer look at the…Wed, 15 Apr 2020 00:00:00 GMTLeon LinTechnologyhttps://leonlins.com/writing/picasso/https://leonlins.com/writing/picasso/Has Picasso influenced anything relevant to us today? Takeaway Understanding Picasso requires knowing his context, thought progression, and challenges of the status quo Picasso over time The Getty museum challenged the public to recreate famous works of art recently, leading to amusing pieces such as this on Reddit [^1] The style of the original image on the left is distinct, and most of you would guess it's something by Picasso, even if you haven't seen it before (I hadn't). You'd be right. Of…Wed, 08 Apr 2020 00:00:00 GMTLeon LinCulturehttps://leonlins.com/writing/fluctuat/https://leonlins.com/writing/fluctuat/You can make a larger difference than you think Goodness is not goodness that seeks advantage. Good is good in the final hour, in the deepest pit, without hope, without witness, without reward. Virtue is only virtue in extremis [^1] I can't predict when this crisis will end. I hope it's soon, though I fear it's not. What I can predict is that this crisis will show people for who they really are. Crises reveal the best but also the worst in us. There will be those that help and those that harm.…Wed, 01 Apr 2020 00:00:00 GMTLeon LinCulturehttps://leonlins.com/writing/liquidity/https://leonlins.com/writing/liquidity/Financial crises are about liquidity and not capital I read "Misunderstanding financial crises" by Gary Gorton a few years back. It has good points on why financial crises occur, and could be rewritten to have more structure and clarity. Highlights below: Financial crises all have the same root cause bank runs and sharp reductions in demand for deposits in the banking system. Crises occur when market participants mistrust the value of bank debt, and there's a sudden large demand for cash from…Wed, 01 Apr 2020 00:00:00 GMTLeon LinInvestinghttps://leonlins.com/writing/striking/https://leonlins.com/writing/striking/Become the cup Takeaway Independent inquiry is needed in your search for truth, not dependence on anyone else's view or a mere book. Striking thoughts book summary Bruce Lee remains a well known name even now, more than 30 years after his death. Best known for his martial arts, Bruce was also well read in philosophy, studying it at the University of Washington and then developing his own style after. The book Striking Thoughts contains a collection of his sayings on a wide range of topics. The…Wed, 25 Mar 2020 00:00:00 GMTLeon LinCulturehttps://leonlins.com/writing/pace/https://leonlins.com/writing/pace/Using the pace layer framework to explain why businesses change quickly and governments change slowly Takeaway The pace layer framework can be used to model civilisations, with each layer moving at its own speed and causing change in others. Forcing layers to change too quickly causes catastrophe. Houses and civilisations Imagine a building. Perhaps the office you work in, or the house you live in. What parts of that building change over time? How quickly do they change? The stuff in the rooms…Wed, 04 Mar 2020 00:00:00 GMTLeon LinSystem Designhttps://leonlins.com/writing/sellside/https://leonlins.com/writing/sellside/What value does sellside equity research provide? Takeaway Robots are coming for sellside equity research and it might not matter If you think of finance as an interaction between sources of capital and users of capital, investment banks such as Goldman, Morgan Stanley, JP Morgan sit in the middle, facilitating transactions between those who have money and those who need it. Banks have bankers that cover a specific financial product (equity, debt, M&A etc) or a specific industry (consumer,…Wed, 26 Feb 2020 00:00:00 GMTLeon LinInvestinghttps://leonlins.com/writing/time/https://leonlins.com/writing/time/You don't find quality time by looking for it About Time 'About') is one of my favourite movies ever, and not just because it features Rachel McAdams in yet another time travel movie [^1]. One of the messages it bludgeons your head with at the end of the movie is to treasure every moment of life. Which, despite coming from a rom com, is actually an important takeaway I believe in. If we should treasure every moment, what about the concept of quality time then? Ryan Holiday recently wrote about…Wed, 26 Feb 2020 00:00:00 GMTLeon LinCulturehttps://leonlins.com/writing/no/https://leonlins.com/writing/no/Not replying is not no, and why you should let people go Takeaway Organising events can be frustrating but is an asymmetric opportunity One thing I'm trying to do more of this year is organise more events. Just as I believe that meeting new people is asymmetric [^1], I also believe that bringing people together has disproportionate returns over time. It’s like playing the social lottery, and for free. I arrange regular cocktail nights, restaurant dinner meetups, and the occasional exhibition…Wed, 12 Feb 2020 00:00:00 GMTLeon LinCulturehttps://leonlins.com/writing/vc/https://leonlins.com/writing/vc/What founders should know about venture capital Takeaway Secrets of Sand Hill Road was a good read even for someone in finance, less so if you're already in VC. Secrets of Sand Hill Road book summary I read Secrets of Sand Hill Road over the holidays and thought it was a decent intro to VC and how the industry is incentivised. As someone not in the industry and only with angel investing, public markets and investment banking experience, I still learnt some things that I hadn't known before. If…Thu, 06 Feb 2020 00:00:00 GMTLeon LinInvestinghttps://leonlins.com/writing/ipo/https://leonlins.com/writing/ipo/What companies benefit from IPOs vs direct listings Takeaways Whether you should do a direct listing depends on the type of company you are IPOs vs direct listings Aswath Damodaran, one of the best finance profs out there [^1], wrote about IPOs vs direct listings a while ago. I'll review highlights below; banking ex colleagues feel free to disagree. If you aren't familiar with direct listings, a16z has a primer. but the biggest difference \[in direct listings\] is that it cannot raise fresh…Sun, 02 Feb 2020 00:00:00 GMTLeon LinInvestinghttps://leonlins.com/writing/feedback/https://leonlins.com/writing/feedback/We suck at taking feedback, here's how to get better Takeaways We can often get triggered by feedback, to our disadvantage Knowing the main kinds of feedback will make conversations more productive Misunderstandings always occur during conversations and we need to be aware of them occuring in the moment Being prepared for feedback requires you putting in effort to prepare We need to be kinder on ourselves Taking action after feedback is key Over the holidays I read Thanks for the Feedback by…Sat, 11 Jan 2020 00:00:00 GMTLeon LinCulturehttps://leonlins.com/writing/info/https://leonlins.com/writing/info/The declining profitability of many information dependent business models This week's post is commentary on Geoff Yamane's piece on information speed and investment alpha investment strategies \[...\] can be re framed as information front running: extraordinary returns almost always derive from knowing some truth before others. The viability of these strategies then is related to how fast information travels. I'm stating the obvious, but to make money you need to sell something for more than you…Sat, 21 Dec 2019 00:00:00 GMTLeon LinInvestinghttps://leonlins.com/writing/vr/https://leonlins.com/writing/vr/Video games, portfolio rebalancing, and probabilities Takeaways 1. Video games are the next cultural phenomenon and virtual reality will lead that revolution 2. The timing of when you rebalance your investment portfolio could lead to a significant difference in your returns 3. We're bad at describing probabilities and even worse at combining them Video games killed the sports star On Nov 21st, the popular gaming company Valve announced a new game, Half Life Alyx. Alyx is a sequel in the Half…Sat, 30 Nov 2019 00:00:00 GMTLeon LinTechnologyhttps://leonlins.com/writing/premortem/https://leonlins.com/writing/premortem/Don't ask the group what can go wrong I'm a fan of conducting pre mortems before projects since they help pre empt problems. Gary Klein, Paul Sonkin, and Paul Johnson discuss common mistakes and how to conduct these better in this paper A premortem is simply a method for identifying potential flaws in a plan. It works by having the team imagine that the plan has failed and identify the reasons for its assumed failure. A premortem enables problem finding and encourages candor between team…Sat, 23 Nov 2019 00:00:00 GMTLeon LinRisk & Decision Makinghttps://leonlins.com/writing/hoppin/https://leonlins.com/writing/hoppin/Job shadowing the job shadowing people at Hoppin I recently job shadowed Bilyana Freye of the job shadowing marketplace Hoppin, below is an inital take on my experience. Full disclosure: My company paid for this activity as part of a professional growth learning budget [^1] Whenever people are looking for a new job, a common piece of advice is to first do their research. Some ways that people currently do that are by doing internships or by asking others currently in that role. Internships are a…Sun, 10 Nov 2019 00:00:00 GMTLeon LinTechnologyhttps://leonlins.com/writing/secret/https://leonlins.com/writing/secret/What other people know that you don't Industry insiders have shared knowledge about the sector that outsiders do not. These are the unknown knowns, the public secrets, the non obvious obvious pieces of knowledge. Everyone in the business is aware of it, but people outside are not. The list below may seem cynical; I prefer the term realistic. As always, open to being proven wrong. 1. Companies don't get value when talking with investment bankers about M&A since the companies know the landscape…Sat, 12 Oct 2019 00:00:00 GMTLeon LinCulturehttps://leonlins.com/writing/pvalue/https://leonlins.com/writing/pvalue/What does a p value mean actually Most of us have studied about p values in a Statistics class at some point. Most of us think we understood enough then; we passed our class after all. Most of us are very wrong. Because of widespread p value misuse, some scientists are speaking out against the application of p values in research: We are not calling for a ban on P values. Nor are we saying they cannot be used as a decision criterion in certain specialized applications (such as determining whether…Wed, 04 Sep 2019 00:00:00 GMTLeon LinRisk & Decision Makinghttps://leonlins.com/writing/kellyk/https://leonlins.com/writing/kellyk/How many fans do you need? I came across Kevin Kelly's 1,000 true fans essay recently, and thought it was relevant to what I'm trying to do now with the website and the newsletter. Highlights below: To be a successful creator you don’t need millions. You don’t need millions of dollars or millions of customers, millions of clients or millions of fans. \[...\] you need only thousands of true fans. A thousand is still substantial, but it's within the realm of possibilty that it seems achievable for…Mon, 02 Sep 2019 00:00:00 GMTLeon LinTechnologyhttps://leonlins.com/writing/crm/https://leonlins.com/writing/crm/Pair trades, personal CRMs, and self awareness Takeaways 1. Finding a pair trade in a bubble might be better than shorting it or riding the momentum 2. What is a personal CRM and why are people talking about it? 3. We don't know ourselves very well; how to increase self awareness Bubbles and russian spies With all the news about bubbles this year, I wanted to highlight Byrne Hobart's post about them. [^1] What should you do if you think an asset's current price represents a bubble? Byrne frames…Sat, 31 Aug 2019 00:00:00 GMTLeon LinSystem Designhttps://leonlins.com/writing/stanford/https://leonlins.com/writing/stanford/The SPE survived for almost 50 years because no researcher has been through its archives I've previously written about the replicability crisis in science. I recently learnt about criticisms of the infamous Stanford Prison Experiment that I hadn't seen when I was first reading about it. The criticisms invalidate the conclusions of the experiment for me, and I'll highlight excerpts from this paper by Thibault Le Texier below: Based on the first detailed published account of the experiment…Sun, 25 Aug 2019 00:00:00 GMTLeon LinCulturehttps://leonlins.com/writing/friends/https://leonlins.com/writing/friends/Disclosure, supportiveness, interaction, and positivity to maintain friendships Psychology today had an article that discussed what we want out of friends "The transition from acquaintanceship to friendship is typically characterized by an increase in both the breadth and depth of self disclosure," asserts University of Winnipeg sociologist Beverley Fehr, author of Friendship Processes. "In the early stages of friendship, this tends to be a gradual, reciprocal process. One person takes the risk…Sun, 18 Aug 2019 00:00:00 GMTLeon LinCulturehttps://leonlins.com/writing/aphantasia/https://leonlins.com/writing/aphantasia/Aphantasia and visualisation differences How well can you visualise something? I just learnt that people visualise differently. Take this 10 second test: I'm at a 3 to 4, whereas my cousin swears she's at a 6 [^1]. This goes a long way towards explaining my confusion whenever people were telling me to visualise things... I never could get the detail and clarity that everyone else seemed to be experiencing. For those people that score a 1, you likely have aphantasia, a condition in which you're…Wed, 31 Jul 2019 00:00:00 GMTLeon LinCulturehttps://leonlins.com/writing/ipo_process/https://leonlins.com/writing/ipo_process/Walking through the IPO process What goes on behind the scenes of an IPO? People hear about IPOs frequently, but usually are less aware of what happens behind the scenes. a16z recently wrote a post about the process, and I'm following up with some of my experience. As a reminder, none of this is investment advice. Ever. \[The S1\] also serves as a marketing document positioning the company and its role in the marketplace, because the company has to avoid public promotion during the waiting…Wed, 31 Jul 2019 00:00:00 GMTLeon LinInvestinghttps://leonlins.com/writing/news/https://leonlins.com/writing/news/What's behind the rise in popularity of newsletters Why are newsletters becoming popular and where is this trend going? After I published last month's newsletter, a16z led a $15mm funding round in Substack, the platform I'm currently using to send this [^6]. I'm going to talk about why a16z was interested in Substack and where I think this trend is headed. From a16z's press release: Since then, the internet has opened up new opportunities for media producers. A writer, streamer, or podcaster can…Wed, 31 Jul 2019 00:00:00 GMTLeon LinTechnologyhttps://leonlins.com/writing/movie/https://leonlins.com/writing/movie/Would you watch a film released only after 100 years? I'm fascinated by things that deal with time. From experiments that show how memory and time are linked, to organisations that aim to last 10,000 years, seeing how people understand time's progression and how they interact with time is thought provoking. Time travel with a machine was popularised by H. G. Wells in his "The Time Machine" story, and some cultures have old stories about time dilation, showing that we've thought about the…Sat, 20 Jul 2019 00:00:00 GMTLeon LinCulturehttps://leonlins.com/writing/query/https://leonlins.com/writing/query/Questions and suggestions about this newly launched product A friend launched a new project recently, Query News. This is a walkthrough of what the project is and some suggestions I have. Walkthrough What is Query trying to be? Based on their own words: Would it be accurate to describe this as Quora for timely news? Pretty much! Except I'm not sure really what it is trying to become. But definitely Quora is a good jumping off point. The main thing we're hesitant about with Quora is the model…Fri, 05 Jul 2019 00:00:00 GMTLeon LinTechnologyhttps://leonlins.com/writing/libra/https://leonlins.com/writing/libra/Centralised decentralised finance I try to avoid writing about crypto because I don't really know what's going on, am likely to be misunderstanding something, and will probably be wrong [^1]. This month I'm making an exception because Facebook's Libra project is so confusing I need to rant at length about it in the first section. The second section is about the SEC suing a crypto company, and the third is career advice. New this month is a shoutouts section for projects friends are working on!…Sun, 30 Jun 2019 00:00:00 GMTLeon LinTechnologyhttps://leonlins.com/writing/tim/https://leonlins.com/writing/tim/Whether Vermeer really used Tim’s process is not the point I just learnt about Tim's Vermeer, a documentary by Penn and Teller about inventor Tim Jenison's attempt to reproduce a Vermeer using technology advanced for Vermeer's time. The premise sounded interesting, so I looked up the film online, and became even more interested when I learnt about the controversy the film had generated. I still haven't watched the film, as I've found digging into the controversy and what it implies to be…Sun, 23 Jun 2019 00:00:00 GMTLeon LinCulturehttps://leonlins.com/writing/ad/https://leonlins.com/writing/ad/Ad targeting is not as powerful as you might think People rightfully have privacy and other concerns in the current age of location sharing and targeting, which has been catalysed by GPS. The ability of ad targeting based on location is usually misunderstood, as these articles on street fight and digiday detail below. The accuracy, efficacy, and scale of location targeting is lower than you might think. Per Street Fight: Another thing that location data can do extremely well is find business…Sun, 16 Jun 2019 00:00:00 GMTLeon LinTechnologyhttps://leonlins.com/writing/heart/https://leonlins.com/writing/heart/Can you really die from a broken heart? "Aujourd’hui, maman est morte. Ou peut être hier, je ne sais pas." The opening lines of The Stranger by Albert Camus 'Stranger') captivated me when I first read it [^1] and still captivate me now. They are among my favourite beginnings to a book. Roughly translated as "Maman died today. Or yesterday, I do not know", [^2] these simple sentences set off a series of questions in the reader's mind: \ Why doesn't he know? Is he overcome with grief? Or was it…Sat, 08 Jun 2019 00:00:00 GMTLeon LinCulturehttps://leonlins.com/writing/substack/https://leonlins.com/writing/substack/What I like and dislike, as well as product suggestions I've previously described my reasons for starting a public blog. In addition to this website, I also recently signed up for Substack to publish my monthly newsletters. Before Substack, I'd been directly emailing my distribution list. In this post I go over: 1. Reasons I made the move to Substack from private emails 2. Other benefits of Substack 3. Possible improvements to the product 4. Other more unlikely suggestions I moved to Substack…Sun, 19 May 2019 00:00:00 GMTLeon LinTechnologyhttps://leonlins.com/writing/microwave/https://leonlins.com/writing/microwave/What beliefs stand the test of time I once read about a person so focused on efficiency, she would press the same number on the microwave to save time on heating up her meal e.g. 1:11, 2:22, 3:33. My first thought was 'wow here's someone really intense no wonder they get ahead and I'm falling behind in life'. My next thought was 'wait this habit doesn't make any sense' [^1]. And yet it was now cited as a positive character trait by the writer of the article. It's almost as if the author wanted…Sat, 04 May 2019 00:00:00 GMTLeon LinCulturehttps://leonlins.com/writing/rake/https://leonlins.com/writing/rake/Benchmarking take rates for various marketplaces I'm fascinated by marketplaces and network effects since so much of the internet is built on companies succeeding in them e.g. Facebook's network effects, Amazon's 3rd party marketplace, Google's ad marketplace. This post details my thoughts on a marketplace rake factor fundamental analysis I saw Josh Breinlinger write about here. I liked Josh’s rake factors article because it was the first I’ve seen that attempts to build up fundamental reasons…Sat, 27 Apr 2019 00:00:00 GMTLeon LinTechnologyhttps://leonlins.com/writing/investing/https://leonlins.com/writing/investing/Does having more information help you make better investment decisions? My own investment framework will forever be a work in progress [^1], but one important issue I'll have to address is the purpose of information in investing, and how to treat new information. I've written before about John Huber's framework for sources of edge in investing, and one of the three edges he cites is informational advantage. Theoretically, if you have more or better information than others, you have an edge in…Thu, 18 Apr 2019 00:00:00 GMTLeon LinInvestinghttps://leonlins.com/writing/stock/https://leonlins.com/writing/stock/Loopholes in HK stock disclosures I learnt about Webb site this year and read some interesting articles about how stock pledges were causing small cap stock plunges here and here. This is a rather niche topic but an interesting look into incentive alignment. Firstly, what is Webb site? This is from the "about us" section: Webb site was established in 1998 by David M. Webb, a former investment banker who has lived in Hong Kong since 1991. Webb site Reports provides reports and independent…Sun, 14 Apr 2019 00:00:00 GMTLeon LinInvestinghttps://leonlins.com/writing/trade/https://leonlins.com/writing/trade/Raising taxes, tariffs, and ambitions Takeaways 1. The US trade imbalance won't be fixed by focusing on trade since it's actually a capital inflow problem 2. Chinese influencers are changing the way products are sold 3. Raise your ambitions to be more successful Tax not tariff There is a common misconception that the US trade imbalance can be corrected with trade measures such as tariffs or exchange rates. Michael Pettis, who excels at using first principles to explain economics [^1], disagrees,…Sat, 30 Mar 2019 00:00:00 GMTLeon LinInvestinghttps://leonlins.com/writing/time_illusion/https://leonlins.com/writing/time_illusion/Does time slow down in dangerous situations? Your nose is closer to your brain than your knee. Obvious. You can use your hands to touch both your nose and foot. Obvious. [^1] When you do touch both your nose and foot at the same time, you feel the touches at the same time. Obvious, and now you're wondering where this is going. But let's pause here and think about this. How is it that you feel the touch on your nose, which is closer to your brain, at the same time that you feel the touch on your…Sun, 24 Mar 2019 00:00:00 GMTLeon LinCulturehttps://leonlins.com/writing/write/https://leonlins.com/writing/write/Why I started the original blog Writing is selfish. Well, perhaps not all writing. If you're writing for yourself and never intend for anyone to read it, you're an exception [^1]. But the majority of writing is intended for someone else to read and respond to. Whether that be a paper at school, email at work, or self referential blog post on your web site, you're yelling to get your audience's attention, with the purpose usually to inform, entertain, or persuade [^2]. When you want someone to…Sun, 10 Mar 2019 00:00:00 GMTLeon LinCulturehttps://leonlins.com/writing/moloch/https://leonlins.com/writing/moloch/AI, MBTI, XI This post is long and there's no summary provided. Waste your time Read of your own volition. A poem, then, to start: Moloch whose brief mind is the barrel of gleaming stars! Moloch whose soul is choices of fragrance! Moloch whose framing is glitz and half cheerios! Moloch! Moloch! Nightmare of Moloch! Moloch the loveless! Mental Moloch! Moloch the heavy judger of men! Moloch for I don’t believe in god! Moloch who, fought Sins and made Sin out of Sin! I know what you're thinking:…Sun, 03 Mar 2019 00:00:00 GMTLeon LinCulturehttps://leonlins.com/writing/replicability/https://leonlins.com/writing/replicability/Many popular studies turn out to not be true I remember standing in a bathroom with my arms on my hips in a superman pose, staring at the mirror. "This feels weird" said one side of my brain. "But...science!" went the other. And so there I stood, posing in the bathroom, minutes before my interview was supposed to start. 40 million views and an outrageously successful TED talk later, power posing had come to the mainstream in 2014. This was the idea that posing could boost feelings of confidence,…Sat, 23 Feb 2019 00:00:00 GMTLeon LinRisk & Decision Makinghttps://leonlins.com/writing/reflection/https://leonlins.com/writing/reflection/How I thought about 2018 We don't reflect enough. While New Year's resolutions are a cultural norm, year end reflections seem to be much less discussed. Reflecting is difficult, but necessary to learn from the past. Ideally we'd all be reflecting more regularly; the end of 2018 provides a good excuse to start the habit and continue it on a more frequent monthly or weekly basis. Below are the questions I used for my 2018 reflection along with some rationale: 1. What went well? 2. What am I proud…Thu, 21 Feb 2019 00:00:00 GMTLeon LinCulturehttps://leonlins.com/writing/why/https://leonlins.com/writing/why/Lizard people made the large hadron collider Why do we believe in what we do? I've written previously how people don't reflect enough on what they believe in, or not even know what beliefs they have. Supposing we've identified our core beliefs, what led to us developing and maintaining those beliefs? Is believing in the flying spaghetti monster different from believing in ice spikes on Jupiter's moons? There are many "crazy" beliefs that the mainstream public would laugh at now. Flat earthers.…Mon, 18 Feb 2019 00:00:00 GMTLeon LinCulturehttps://leonlins.com/writing/procrastinate/https://leonlins.com/writing/procrastinate/Structuring your procrastination for success I wrote this while procrastinating on ten other post ideas [^1]. When we have options, we can wait. We wait till time runs out, our options are gone, and we rush our task in some last minute effort where we convince ourselves that necessity is the mother of invention. And then we talk about the many all nighters we pulled to finish the project/write the essay/digitize our written reviews of chocolate bars [^2], only to repeat this cycle the next time…Tue, 05 Feb 2019 00:00:00 GMTLeon LinCulturehttps://leonlins.com/writing/dunning/https://leonlins.com/writing/dunning/David Dunning explains the effect he popularised Dumb people think they're smart. Smart people think they're dumb. This is a simplistic overview of the Dunning Kruger effect. David Dunning explains more in this interview, including important nuances that people miss. even though your belief about the way the world is just seems so compelling or so self evident, it doesn’t mean that it really is true Just because we want to believe in something doesn't make it true. Most people seek comfort by…Sat, 02 Feb 2019 00:00:00 GMTLeon LinRisk & Decision Makinghttps://leonlins.com/writing/specialist/https://leonlins.com/writing/specialist/Specialize most of the time, but spend time understanding the bigger picture This post on Farnam Street was one of the more interesting things I've read lately. It talks about the tradeoffs between specialising vs generalising, and how they are not necessarily mutually exclusive. Some quotes below on why Farnam Street thinks that way: When their particular skills are in demand, specialists experience substantial upsides. The downside is that specialists are vulnerable to change Every day, we…Fri, 01 Dec 2017 00:00:00 GMTLeon LinCulturehttps://leonlins.com/writing/internet/https://leonlins.com/writing/internet/Stories about the founding of the internet Takeaway There's a lot of similarity between early internet trends and things that are popular today. Book review I read How the internet happened by Brian McCullough recently, and it was a good read on the history of consumer internet. The book starts around the origin of Mosaic (one of the first internet browsers), and goes up to Facebook and Iphones. Reading the founding stories of internet companies one chapter at a time, I was surprised by how…Fri, 01 Dec 2017 00:00:00 GMTLeon LinTechnologyhttps://leonlins.com/writing/ib/https://leonlins.com/writing/ib/A checklist of concepts to cover when starting out Back when I was leaving investment banking I wanted to reflect on what I'd learnt. Partially because of that, I put together a list of topics that I thought a junior banker should aim to be familiar with during their time there. The list is neither meant to be comprehensive, nor do I think you can be an expert at all the areas after just a few years. Admittedly, I've already forgotten some of the areas below. However, I still believe it is…Mon, 24 Jul 2017 00:00:00 GMTLeon LinCulturehttps://leonlins.com/writing/claude/https://leonlins.com/writing/claude/The father of information theory I was first introduced to Claude Shannon a few months before this article was published. I don't recall exactly where I first saw the name, but the more I read about him the more interested I became. The authors of the article wrote a longer form biography of Claude, and summarised their process in the article. Here are some of my takeaways: He’s the most important genius you’ve never heard of, a man whose intellect was on par with Albert Einstein and Isaac…Thu, 20 Jul 2017 00:00:00 GMTLeon LinTechnologyhttps://leonlins.com/writing/convert/https://leonlins.com/writing/convert/Why companies make it easier to short the stock During my time in banking, there was one particular deal that fascinated me due to its cleverness: GoPro's convertible issuance in 2017 April . Matt Levine writes about it here, my summary is below: 1. If your company is doing badly, it can be hard to get debt or issue equity 2. A convertible note might be a great option since convertible arbitrage investors (Arbs) want volatility. Your stock price decline has probably created significant…Thu, 06 Apr 2017 00:00:00 GMTLeon LinInvestinghttps://leonlins.com/writing/random/https://leonlins.com/writing/random/Randomness does not look random I read Nassim Nicholas Taleb's book 'Fooled by Randomness' a while back and thought it was great. Below are my notes and thoughts on book excerpts: In expectation, a dentist is richer than a rock star You cannot consider the success of a profession without taking into account the average of all the people who enter it. Do not just include the sample that succeeded. Take into account both the observed and unobserved possible outcomes to get a full picture. A…Thu, 23 Feb 2017 00:00:00 GMTLeon LinRisk & Decision Makinghttps://leonlins.com/writing/excel/https://leonlins.com/writing/excel/Notes about excel speed tips Some time back I had to do in depth research into excel efficiency. Some of the files we were using in banking were taking a long time to calculate, and we wanted to see what improvements could be made. There's a lot of content out there, and these were the most helpful sites I found. Note that I'm not necessarily agreeing with all of the content though: 1. Microsoft's own 'improving performance' writeup 'office performance 2007') "With the Excel 2007 "Big Grid,"…Thu, 17 Mar 2016 00:00:00 GMTLeon LinSystem Design