About / Best Of / FAQ
|Byrne Hobart||Feb 19|
Last updated February 19, 2020.
I’m Byrne, and I write about things that don’t mean-revert.
(If you didn’t find this post via Medium, you probably got to it through my newsletter.)
The world is full of phenomena that move in cycles — countries rise and fall, economies speed up and slow down, ideas come in and out of fashion, people dig new trenches in the culture wars. And then there are times that the world changes, and it’s never the same again.
The first time somebody used coal to power a steam engine that pumped water out of a coal mine is a wonderful example: from that point on, productivity growth in the Western World was on the order of ~1% per year, instead of the previous standard of 0.1% per year. Changes that would have taken centuries happened in a generation. For the first time ever, progress happened so fast it was visible.
Technology is full of non mean-reverting phenomena, but so is social technology. Sometimes there’s an idea that’s potentially good but not worth implementing, until somebody — usually somebody who combines both charismatic fanaticism with a modicum of executive talent — suddenly organizes enough people to make it feasible. Every startup that was a joke in the 90s and is a billion-dollar company today works that way.
I use Medium as a way to think out loud about changes like this. (And less significant stuff, too.) My themes:
Productivity growth is the most important variable for ensuring that people can do the stuff they want, broadly defined. Productivity growth gets you rich, it gives you money to raise kids and take care of your parents; and if your ambitions lean to the spiritual or the artistic, it’s perhaps more important. The only way the economy can support people who aren’t trying to get rich is if a lot of people find it easy to get rich.
Finance is full of useful metaphors for other aspects of the human experience. Since finance is all about uncertainty, expectations, and disagreements, it gives us a rich vocabulary for describing other instantiations of these behaviors. For example, a huge number of risky activities are, in finance terms, a form of put-writing: doing things at the last minute, living paycheck-to-paycheck, making excuses when you’d rather not tell the truth — all of these things have the same payoff function as selling insurance against disaster. Since we have a lot more data on the finance version, we can get a lot more theoretical knowledge out of it.
On the other hand: reifying imperfect theories is the single biggest source of avoidable trouble in the world.
Opinionated beats objective. Your allies will be more likely to read you; your enemies will want to correct you.
And the biographical details:
I’m 32, married, two kids with a third on the way in June.
I live in New York.
Yes, we can get coffee some time. Email me.
My most-read stories include:
How I got hired at a top hedge fund without a college degree. This is not a how-to guide; it’s a how-I-did-it guide that should make it clear that I took advantage of a lot of luck.
How Robots From The Future Will Kill Your White-Collar Job. Including: the science of Bloomberg HQ’s fast elevators, why non-AI-experts are experts on the impact of AI, and how technology companies discover and privatize the commons.
How Filter Bubbles Will Save the World. In praise of weirdness and eccentricity.
The 30-Year Mortgage is an Intrinsically Toxic Product. The American mortgage system is pathologically ill-suited to every single one of its explicit goals, and the story gets worse from there.
On Perks, analyzing the economics of free company-provided dinner, both from the perspective of employers and in terms of its broader social impact.
Why It’s Hard to Kill the Bloomberg Terminal. Bloomberg looks like a software product, but it’s actually the world’s most elite social networking site.
The iBuyers: High(er)-Frequency Trading Comes to Home Buying. An overview of how housing has changed since 2008, and why the new breed of data science-driven home flippers has nothing whatsoever to do with the old house-flipping model.
So You’ve Spotted a Bubble. The stories you’ve read about people cleverly shorting a financial bubble are deeply misleading: it’s easier to spot one than to time the ending. But there is a way…
Negative Rates: Zero is Just a Number. Negative interest rates aren’t bad on their own, but they’re a symptom of something very bad indeed.
What Is We!? Understanding the WeWork IPO. WeWork is not a great company, but the media coverage largely missed the point.
Where Do Business Mafias Come From? What do the Paypal Mafia and the Tiger Cubs have in common? It all comes down to good people, bad luck, and a linear regression on primate cranial volumes.
Y Combinator, Not Lambda School, Is Unbundling Education. Y Combinator has seamlessly replicated the signaling and networking value of school, and built a nice endowment fund on the side.
Content Marketing for Non-Hucksters. “Content Marketing” is lame, but writing online is fun.
Bitcoin: The Asset Allocator’s Perspective. How should you value Bitcoin? Is it a more extreme version of an early-stage startup, or a weird form of gold?
It’s A Profitable Time To Be an Introvert. The world is increasingly run by, and for, people who like to spend time typing quietly.
The Economics of The Boomers. The baby boomers are a huge proportion of the population, and a bigger proportion of the electorate. They’re getting old, and investors should get nervous.
The Cynic’s Guide to Reading Business Books. A business book only gets written when there’s a good story and somebody willing to tell it. This means failures are far better-documented than successes.
War & Peace & Bacon & Eggs: Understanding the Endless Recipe Site Preamble. Recipe sites have notoriously long narratives before the recipe starts. Why? Google.
Some other pieces I’m particularly proud of, that didn’t get quite the same traction as the hits (yet):
On the economics of Juul. The secret to understanding this industry is that every country has implicitly or explicitly nationalized the tobacco business, so any smoking substitute competes directly with the government. Tread carefully.
Paying for Illiquidity. When you invest in private equity, are you paying for superior asset selection, better management, and financial engineering? Yes, but you’re also paying someone not to mark assets to market when the equities drop.
Knowing COBOL is a tontine. A tontine is an asset that pays off when other investors die. They’re illegal, for reasons The Simpsons made obvious. COBOL programmers are getting pretty old, and the companies that use COBOL automated early, so the payoff is identical. If we don’t subsidize learning it, we need to ban it.
Financial Bubbles are the Gnostic Heresy: The Voegelin-Minsky Synthesis. A deep dive into applying the philosophy of Eric Voegelin to financial bubbles, complete with a mini-history of the late twentieth century’s many, many financial bubbles.
Fracking: The Alchemy of Turning High-Yield Bonds into Low-Inflation Growth. Fracking has completely changed the oil industry, but its macroeconomic effects — and its macro dependencies — are underappreciated.
That’s a Bus. You Identified the Sweeping Implications of a Staggering, Generational Technological Change, and Reinvented a Bus. Clapping back at the world’s worst tech news headline.
The Tyranny of the Long Generation. Science is not the only field that advances one funeral at a time.
Optionality is for Innumerate Cowards. I don’t like “optionality.”
The Social Network Was The Most Important Movie of All Time. Also, the soundtrack is great work music.
“Passive” as a Factor. What bet are you making when you bet on an index?
CFA sans BA: The Case for a Barbell Approach to Education. I doubt I’m literally the only CFA charterholder without a bachelor’s degree, but I couldn’t find any other writeups on how or why to do it.
What Rene Girard Can Teach Us About Bubbles. Girard’s mimetic desire framework is a useful way to think about how bubbles start and how they get so extreme. This collaborative piece is a deep dive into historical bubbles and their psychological dynamics.
The Great European Dividend Futures Caper. Exploring a weird corner of the derivatives market where a combination of irrational behavior and bad incentives leads to an easy trade.
The Meta-Malthusian Manifesto. Malthus was wrong, but wrong in an interesting way — and if you run the numbers, he didn’t suffer so much from mistaken assumptions as from bad timing.
True Love Is The Most Important Thing In The World: A Coasian/Evolutionary Approach. TL; DR: Love is patient. Love is kind. Love is an escape from the Prisoner’s Dilemma that is endless dating and indefinitely delayed adulthood.
Coins as Tangible History. Rare coins represent wealth that somebody stored and never got around to retrieving — they’re a permanent record of a moment when life went from lucrative to violent.
How do you find the time to write all this stuff?
This is by far the most common question I get. There are no easy answers, but here are some of the things that work for me:
Set a very, very early alarm. 4:30 is a good time to shoot for. That gets me a solid 1–2 hours every morning for reading and writing.
Read a lot. Or, if you want the negative version: never watch TV, and put strict limits on your social media time.
Use airplane mode when you write.
Bang out rough drafts at maximum speed. My rule when I’m writing draft one is that if anything slows me down, I write “TK” followed by a quick note about what I need to add, and then move on to the next topic. Then once I’m done with the draft I can quickly search through all the TKs and fill things in. This also works for links; nothing breaks up your flow like trying to find that one story that was on Hacker News last month about logistics in Kenya (or was it Nigeria? Was it Hacker News, or Marginal Revolution?). I can usually finish 1k-2k words of a draft in 45 minutes. Some things take longer, though; the Voegelin piece took a whole day.
Keep a running list of ideas in a physical notebook. A notebook is good because it’s a) something you can grab and doodle in when you’re bored, but b) not something with an Internet connection, so you won’t accidentally waste an hour.
Economize on other stuff. I watch about two movies a year and never do cardio; some things just take a ton of time.
Why don’t you write about X?
There are a bunch of topics that I avoid writing about. My rough rule is that I’d like to write stuff that will still be worth reading in five years, and ideally stuff that will be more relevant a year from now. Because of the way news site algorithms currently work, that’s the opposite of what everybody who writes for a living does.
For example, is there something worthwhile to say about the Gillette ad kerfuffle? (For anyone reading this in the distant future, like February 2019: in January 2019, there was a lot of controversy over a Gillette ad that addressed the topic of toxic masculinity.) There might be something useful to say about it, but I’d naturally end up taking a side, and then the whole thing would be an exercise in either validating preconceptions or trying pointlessly to rebut them. And what is there to add to The Last Psychiatrist’s take: “If you’re watching, it’s for you.”
Basically I’d like to choose topics where nobody has picked a side yet.
You’re completely wrong about X.
Who are you writing for?
In order of importance:
Me. I’m writing the kind of stuff I’d like to read. I wanted there to be a good article on the social impact of The Social Network, so I wrote one.
My general target audience might be described as “median Matt Levine or Hacker News reader.” i.e. probably someone who works in finance, technology, or both; someone who is generally interested in pulling on intellectual threads; not somebody who is trying to find Five Amazing Hacks To Improve Your Whatever.
Why do you write?
Writing is a good way to rigorously explore ideas. Try it. The next time you find some weird similarity between the Nixon presidency and the way your last employer handled crises, or between the spread of sail technology in the Renaissance and the rise of the shipping container, I highly recommend exploring it at length. (Send me a link.)
I hate to tell the same story twice, and a lot of the stuff that I end up writing about starts as some point that I make in three separate conversations in the space of a week. Instead of delivering the same lecture to the same person twice, which is awkward, I’d rather be able to say I wrote it up in more detail and point them to a link.
Writing is a good way to meet interesting people. Since I sometimes write about obscure stuff, anyone who searches for that topic and finds my writing is, almost by definition, someone I’d enjoy hanging out with.
I want to set a good example for my kids. My wife and I plan to homeschool, and that will work best if the kids are used to the idea that everybody has demanding academic side projects.
I hate the feeling of looking back on a month, a year, or a decade, and worrying that I haven’t accomplished anything. Writing is a tangible way to avoid this.
What’s your business model?
Writing on the Internet is, in general, a terrible business. But it’s a good way to showcase expertise and meet interesting people, for free. Think of it as content marketing for my personal brand, unless reading those words made you physically ill, in which case you can think of it as a hobby I use to meet friends.
Should I drop out of college?
Probably not. While the higher ed system in the US is broken, it’s usually a difficult move to fight the system as opposed to working with it. That said, dropping out temporarily is a pretty low-risk proposition, especially if you’re dropping out to work on something specific. Worst-case, you fail and finish school a year late, and you’re definitely not the first person to take five years for undergrad.
Should I have kids?
Wow, you really want me to help you make all of your important life decisions all the sudden. Yes, you probably should: kids are surprisingly fun, and although they’re a lot of work, the work usually comes at the expense of things that turned out to be unimportant. Bryan Caplan makes a strong case.
How can we keep in touch?
I write a semi-regular newsletter. Convenient!