I remember when my son finally got smarter than our dog. For the record, it took longer than I thought it would.
With respect to human intelligence, language is likely the first domino. It allows "chunking" and makes learning new things more efficient, effective, and certain.
Language is powerful in-and-of-itself. Using language consciously is a multiplier. Today, I want to focus on one such use of language – the power of naming things.
The Power Of Naming Things
“I read in a book once that a rose by any other name would smell as sweet, but I've never been able to believe it. I don't believe a rose WOULD be as nice if it was called a thistle or a skunk cabbage.” - L.M. Montgomery, Anne of Green Gables
Before I go into detail, I shot a video on the subject, with a few examples from our business.
Having a shared language allows you to communicate, coordinate and collaborate more efficiently. But it's hard to have a shared language when you're discussing something intangible.
That's where naming comes in. When you name something, you make the "invisible" visible (for you, your team, and anyone else who might care).
I've often said the first step is to bring order to chaos. Then, wisdom comes from finer distinctions. Naming is a great way to create a natural taxonomy that helps people understand where they are – and where they are going.
I like thinking of it in comparison to value ladders in marketing.
Each stage of the value ladder is meant to bring you to the next level. By the time someone gets to the top of the value ladder, they're your ideal customer. In other words, you create a natural pathway for a stranger (meaning someone who doesn't know you well) to follow, to gain value, trust, and momentum onwards ... ultimately, ascending to become someone who believes in, and supports, what you offer and who you are.
Ultimately, successful collaboration relies on common language. That is part of the reason naming is so important. The act of naming something makes it real, defines its boundaries and potentialities, and is often the first step towards understanding, adoption, and support.
Creating "Amplified Intelligence"
There are always answers. We just have to be smart enough. - John Green
Here is an example from our business. When we first started building trading systems, all we had was an idea. Then we figured out an equation (and more of them). Next, we figured out some methods or techniques ... which became recipes for success. As we progressed, we figured out a growing collection of useful and reliable ways to test, validate, automate and execute the things we wanted to do (or to filter ... or prevent).
For someone who didn't understand the organizing principles, it probably seemed like a mess. Compounding the problem is that fear, uncertainty, and doubt are inhibitors to potential customers and stakeholders (like the employees working in a business).
Coming up with the right organizing principle (and name) makes it easier to understand, accept, and adopt. For example, many traders and trading firms want to amplify intelligence – meaning they were looking to make better decisions, take smarter actions, and ultimately to perform better (which might mean making and keeping more money). To help firms amplify intelligence, we created the Capitalogix Insight Engine (which is a platform of equations, algorithms, methods, testing tools, automations, and execution capabilities). Within that platform, we have functional components (or modules) that focus on ideas like portfolio construction, sensible diversification, alpha generation, risk management, and allocation strategies. Some of those words may not mean much to you, if you're not a trader, but if you are it creates an order that makes sense and a path from the beginning to the end of the process.
It makes sense. It explains where we are – while informing what might come later.
The point is that naming things creates order, structure, and a contextual map of understanding.
It a compass heading that we can use to navigate and guide in uncertain territory.
I have always believed that you can predict a lot about your future, based on the quality of the people you spend the present with.
That is why I think participation in quality peer groups is critical.
Over the years, I joined several business-leader peer groups like Strategic Coach, Abundance 360, or Vistage. These groups are a great way to meet people and learn things ... and they also provide you with access to the benefits of feedback from a group of trusted advisors, perspectives you might otherwise get from a counselor, and a flow of ideas and opportunities that wouldn't have crossed your mind or your desk. They allow participants to see, hear, and discuss things they don't normally think about, talk about, or even notice.
Peer groups are also great at bringing blind spots to your attention and connecting you to trends transforming industries and the world.
In these meetings, you often find a "nugget" in the discussion. Sometimes it stems from what is happening in the world. Sometimes it alerts you to potentially useful relationships, opportunities, or gadgets. And sometimes, the nugget comes from discussing a common problem or constraint (like the pandemic) with your peers.
This week, several of these groups prompted me to think about time (e.g., not wanting to sell time for money, wanting to live past 100, the "strangeness" of time during the past year, etc.).
Time is funny. Sometimes it seems to fly by ... other times, it seems to stand still. Dan Sullivan uses the example of 10 minutes with a dying loved one compared to holding your hand on a stove for 10 minutes. One seems excruciatingly short, and the other seems excruciatingly long.
The average life expectancy for men in the U.S. is 76.
How many amazing vacations do you have left? How many jaw-dropping moments? How many fantastic meals? How many Super Bowls?
What about time with your parents or older relatives? It's easy to forget to call or miss an important event because "life happens" – but if you realize you may have already used 95% of your in-person time with that person ... doesn't it become more special?
For contrast:
Would you rather spend that time dwelling on a mistake?
What about being angry at something out of your control?
What about doing work that drains you mentally and emotionally?
In my TEDx talk, I mentioned "living like you only have a year left" and how much more "life" we got out of the last part of my dad's life.
That is just an example, but clearly, it is worth taking the concept further.
To start, think of some of the activities you do, places you go, experiences you have that are special and make you feel like your best self.
Hitting Flow-state and creating something new and exciting;
Taking an amazing vacation and experiencing something completely new;
Having a moment with someone you love that makes you stop and say - "Wow!"
Making a difference in someone's day or giving back to your community;
Experiencing peace and relaxation;
Feeling pure joy.
It's easy to get lost and take for granted these moments when they happen, but when you think about how much time you have left ... they take a whole new meaning.
How can you maximize the time you have left? Fill it with the best experiences, activities, and people you can.
To start, think about different time frames:
What activities could you commit to doing at least once a year?
What activities could you commit to doing at least once a month?
What activities could you commit to doing at least once a week?
What activities could you commit to doing at least once a day?
Make those lists ... it is a simple way to get a better return on the time value of your life.
Seriously, try it.
Let me know how it worked for you – and what you chose!
It's a feat of engineering and human will. It's also a good reminder.
History is littered with tales of once-rare resources made plentiful by innovation. The reason is pretty straightforward … scarcity is often contextual.
Imagine a giant orange tree packed with fruit. If you pluck all the oranges from the lower branches, you are effectively out of accessible fruit. From that limited perspective, oranges are now scarce. But once someone invents a piece of technology called a ladder, the problem is solved.
When we first went to the moon, calculators referred to people charged with doing the complex math needed for the Rocket to make it into Space (rather than the device that could do the math instantly with no errors) and the computing power it took to get to the moon took up many rooms at NASA.
In comparison, you now have dramatically more computing power in your pocket than NASA used to get to the moon.
Likewise, we now have people living in space, posting videos from the ISS, and the ability to stream high-resolution images (and even movies) of space and galaxies near and far.
What was once scarce and unobtainable has become abundant and accessible. It is a story repeated countless times.
Still, as humans, we're wired to think locally and linearly. We evolved to live our lives in small groups, to fear outsiders, and to stay in a general region until we die. We're not wired to think about the billions and billions of individuals on our planet, or the rate of technological growth - or the minuteness of all that in contrast to the expanse of space.
Nonetheless, we have created better and faster ways to travel, we've created instantaneous communication networks across vast distances, and we've created megacities. Our tribes have gotten much bigger - and with that, our ability to envision and enact massive change has grown as well.
Our quest to conquer Space became the poster child for a type of innovation we now call "moon shots". While 'moon shot' originally meant "long shot," it's increasingly being used to describe a monumental effort towards a lofty goal — in other words, a "giant leap."
Today, with technology as a catalyst, we see those leaps happen in many areas (like A.I., medicine, longevity, space exploration, etc.).
It's hard to comprehend the scale of the universe or the scale of our potential ... but that's what makes it worth exploring.
Consequently, your choice of information source heavily contributes to your perceptions, ideas, and worldview.
Coincidently, news sources are a lightning rod for vitriol and polemic.
I am still a little surprised by the abject hatred I hear expressed towards a particular news source by those who hold an opposing bias. This often leads to claims of fake news, delusion, and partisan press. Likewise, it is common to hear derision toward anyone who consumes that news source.
Perhaps the reality is that that most sources are flawed – and the goal should simply be to find information that sucks less?
It's to the point where if you watch the news, you're misinformed; and if you don't watch the news, you're uninformed. News sources aren't just reporting the news, they're creating opinions and arguments that become the news. And many don't care enough to think for themselves - or to extract the facts from the opinion.
Here's a chart that shows where news sources rank on various scales. You can click the image to go to an interactive version with more details.
I once spent fifteen minutes in an argument about how you know whether the information in this chart is true. If you're curious about their methods, click here.
Distrust toward news agencies, big companies, the government, and basically anyone with a particularly large reach is the "new normal."
Perhaps even more dangerous is the amount of fake news and haphazard research shared on social media. Willful misrepresentations of complex issues are now a too common communication tactic now on both sides ... and the fair and unbiased consideration of issues suffers.
Social media spreads like wildfire, and by the time it has been debunked (or proven to be an oversimplification) the damage is done. People are convinced ... and some will never go beyond that.
The reality isn't as bleak. People agree on a lot more than they say they do. It is often easier to focus on "us" versus "them" rather than what we agree upon jointly. This is true on a global scale. We agree on a lot. Most Democrats aren't socialists, and most Republicans aren't fascists ... and the fact that our conversation has drifted there is intellectually lazy.
This idea that either side is trying to destroy the country is clearly untrue (OK, mostly untrue). There are loonies on the fringes of any group, but the average Democrat is not that unlike the average Republican. You don't have to agree with their opinions, but you should be able to trust that they want our country to succeed.
I don't know that we have a solution. But there is one common "fake news" fallacy I want to explain at least a little.
It's called the Motte and Bailey fallacy. It's named after a style of medieval castle prioritizing military defense.
On the left is a Motte, an artificial mound often topped with a stone structure, and on the right is a Bailey, the enclosed courtyard. The Motte serves to protect not only itself but also the Bailey.
As a form of argument, an arguer conflates two positions that share similarities. One of the positions is easy to defend (the motte) and the other is controversial (the bailey). The arguer advances the controversial position, but when challenged insists they're only advancing the moderate position. Upon retreating the arguer can claim that the bailey hasn't been refuted, or that the critic is unreasonable by equating an attack on the bailey with an attack on the motte.
It's a common method used by newscasters, politicians, and social media posters alike. And it's easy to get caught in it if you don't do your research.
We believe what we want to believe ... so it can be very hard to change a belief, even in the face of contrary evidence.
But, hopefully, in learning about these fallacies, and being aware, we do better.
I will caution that blind distrust is dangerous – because it feels like critical thought without forcing you to critically think.
Distrust is good ... but too much of a good thing is a bad thing.
Not everything is a conspiracy theory or a false flag.
Do research, give more credence to experts in a field - but don't blindly trust them either. How well do you think you're really thinking for yourself?
It's a complicated world, and it's only getting more complicated. But, hopefully, it encourages you to get outside your bubble and learn more about those you disagree with.
I've shared several links about SPACs, in the past few months, as they have gotten increasingly popular and relevant.
SPAC stands for Special Purpose Acquisition Company. A SPAC is a company with no commercial operations, formed to raise capital through an IPO to acquire existing companies, technologies.
A typical IPO creates new public shares of a formerly private company while a SPAC merges a private shell company with an already existing public company.
They've been around for decades – but SPACs have been increasingly popular recently. Making that point, according to Bloomberg, SPAC dollars raised in 2020 beat the total from the previous 10 years combined.
SPACs are becoming popular to businesses because they're seen as a safer way to go public in a volatile environment. They're also becoming popular to investors because the stock value often jumps pre-acquisition. Nevertheless, the reality is that the average SPAC underperforms the S&P 500 on any given timeframe.
The successful products we encounter every day are the result of initial failure. While positive outcomes are all around us, hidden from view is the iterative process of repeated failed attempts that lead to improvement. The world is filled with fantastic products from wildly successful companies, making it easy to overlook the many small gains and occasional big breakthroughs that helped them achieve this success.
For businesses looking for access to capital, SPACs are a legitimate option worth considering. However, for investors looking for the next new alternative asset class to invest in, SPACs may not be what you are looking for in the longer term.
Sometimes insight and inspiration come from strange places.
I stumbled upon a video of a Japanese man playing the lullaby "Twinkle, Twinkle, Little Star" on the piano at 7 different levels of intensity. It has almost 5 million views. Check it out.
hat-tip to David Kotok for the video via Cateen かてぃん
On top of being an impressive feat of skill, I couldn't help but relate it back to our tendency towards pattern recognition and heuristics.
Even at level 7, it's not hard to hear the iconic lullaby. Whether you hear the simple version or a complicated version, somehow you know that the base is the same. The human brain is great at recognizing patterns (sometimes too great, finding patterns that aren't there).
As an aside, I have three distinct sets of clothes in my closet. I think of them as fat boy clothes, skinny boy clothes, and clothes. If I look at Facebook, it's easy for me to see (simply by looking at my face) when I'm picking clothes from each of those sections in my closet. But how does a facial recognition software know that I'm still me (at weights ranging from 200 to 250 pounds)? Or that I'm still me in a profile picture taken eight years ago. Somehow you have to recognize the match despite the mismatch.
Similarly, how does pattern recognition software recognize a pattern that might happen over a period of minutes versus that same pattern when it occurs over a period of seconds or days?
A simple video - but a great reminder. Hope you enjoyed it.
The Power of Naming Things
I remember when my son finally got smarter than our dog. For the record, it took longer than I thought it would.
With respect to human intelligence, language is likely the first domino. It allows "chunking" and makes learning new things more efficient, effective, and certain.
Language is powerful in-and-of-itself. Using language consciously is a multiplier. Today, I want to focus on one such use of language – the power of naming things.
The Power Of Naming Things
Before I go into detail, I shot a video on the subject, with a few examples from our business.
Having a shared language allows you to communicate, coordinate and collaborate more efficiently. But it's hard to have a shared language when you're discussing something intangible.
That's where naming comes in. When you name something, you make the "invisible" visible (for you, your team, and anyone else who might care).
I've often said the first step is to bring order to chaos. Then, wisdom comes from finer distinctions. Naming is a great way to create a natural taxonomy that helps people understand where they are – and where they are going.
I like thinking of it in comparison to value ladders in marketing.
Each stage of the value ladder is meant to bring you to the next level. By the time someone gets to the top of the value ladder, they're your ideal customer. In other words, you create a natural pathway for a stranger (meaning someone who doesn't know you well) to follow, to gain value, trust, and momentum onwards ... ultimately, ascending to become someone who believes in, and supports, what you offer and who you are.
Ultimately, successful collaboration relies on common language. That is part of the reason naming is so important. The act of naming something makes it real, defines its boundaries and potentialities, and is often the first step towards understanding, adoption, and support.
Creating "Amplified Intelligence"
Here is an example from our business. When we first started building trading systems, all we had was an idea. Then we figured out an equation (and more of them). Next, we figured out some methods or techniques ... which became recipes for success. As we progressed, we figured out a growing collection of useful and reliable ways to test, validate, automate and execute the things we wanted to do (or to filter ... or prevent).
For someone who didn't understand the organizing principles, it probably seemed like a mess. Compounding the problem is that fear, uncertainty, and doubt are inhibitors to potential customers and stakeholders (like the employees working in a business).
Coming up with the right organizing principle (and name) makes it easier to understand, accept, and adopt. For example, many traders and trading firms want to amplify intelligence – meaning they were looking to make better decisions, take smarter actions, and ultimately to perform better (which might mean making and keeping more money). To help firms amplify intelligence, we created the Capitalogix Insight Engine (which is a platform of equations, algorithms, methods, testing tools, automations, and execution capabilities). Within that platform, we have functional components (or modules) that focus on ideas like portfolio construction, sensible diversification, alpha generation, risk management, and allocation strategies. Some of those words may not mean much to you, if you're not a trader, but if you are it creates an order that makes sense and a path from the beginning to the end of the process.
It makes sense. It explains where we are – while informing what might come later.
The point is that naming things creates order, structure, and a contextual map of understanding.
It a compass heading that we can use to navigate and guide in uncertain territory.
Hope that helps.
Posted at 07:26 PM in Business, Current Affairs, Ideas, Market Commentary, Personal Development, Science, Trading, Trading Tools, Web/Tech | Permalink | Comments (0)
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