Longreads

• Philo at MD&A asks: Where are all the .400 investors? I've heard estimates that 50% of the available alpha to investors has disappeared in the last decade or two, a suspiciously round number that feels roughly right. And since investment careers compound, even a small change in the opportunity set can lead to very different outcomes after a full career. On the other hand, the main explanation for that decline is that a) there's more information, and b) there are more institutional investors. And while data sources tend to get widely distributed over time, the recent growth of retail investing partly reverses the trend.

• A very interesting conversation between Ezra Klein and Tyler Cowen. David Shorr likes to point out that "centrists" are not people with middle-ground opinions, but people with a fairly random set of extreme opinions that more or less offset one another; both Klein and Cowen fit a very positive version of this mold, since they're moderate-but-heterodox members of their respective political tendencies. It's a fun conversation, particularly the point about how you use discount rates to think about far future moral concerns. (The nice thing about low discount rates, which is also their danger, is that they require you to think very seriously about what the future can be like and how you'll contribute to it.)

• This Om Malik profile of Brunello Cucinelli is worth reading as a strong counterpoint to relentless growth and optimization. "The idea of manufacturing something that you never scrap, you never throw away — I liked it very much." (Via David Perell.)

• KG and Dan Scott profile Arthur Rock (this is part 1). It's very worthwhile to read early histories of Silicon Valley, to see a) which rules are older than you thought, b) which of them are new even though they feel permanent, and c) which ones exist because somebody made an arbitrary decision and it established an equilibrium. A lot of the family tree of how companies get managed and funded traces back to Rock, so he's worth studying.

• Nature has a history of the development of mRNA vaccines. Two things stand out: first, it's impressive how many different concepts needed their proof-of-concept before it was a viable product; we're quite fortunate it wasn't Covid-99. Second, some of the contributors were very high-variance people—the first person to get mRNA into a living organism is skeptical about the cost-benefit of Covid vaccines for children and young adults, and has had conflicts with some of the organizations he's left. And others seem to have a healthily low level of variance, persisting in mRNA research despite skeptical colleagues and low funding. It's good to have a research ecosystem healthy enough that there can be fit between personality types and problems.

Books

• I reread Fall; or, Dodge in Hell, Neal Stephenson's novel that somehow combines Permutation City and Paradise Lost. Like many Stephenson works, there are throwaway bits that turn out to be good predictions: the book, published in 2019, imagines a hybrid in-person and teleworking future, although it doesn't quite nail the cause. The book also uses profitable quantitative finance strategies as a deus ex machina to explain why characters can afford some very expensive projects, which is nice—the profitability of quantitative finance seems to have exactly that role for a few people I know, in that it provides a lot of money that lets them pursue other projects that are more fundamentally interesting to them.

Open Thread

• Drop in any links or books of interest to Diff readers.

• Which sustainable businesses have the lowest take rate, in terms of how much they earn relative to how much economic activity they directly touch? Logistics, payments, and display advertising all seem to fit this category. Are there others?

• Medical tourism has been around for a while, and many global companies have found clever ways to earn their profits in low-tax jurisdictions. But has anyone done a good job of moving medical research to places where anything goes? Getting the right equipment and a critical mass of the right people is hard, but how difficult is it?

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