BC ICARUSPARADOX

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Sahil Bloom
@SahilBloom 3 years, 3 months ago 359 views

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The Icarus Paradox offers a critical lesson on business, investing, and life.

Here’s a simple breakdown:

The story of Icarus is a famous tale from Greek mythology.

Icarus is the son of a craftsman—Daedalus.

To help the pair escape from Crete, Daedalus uses feathers and wax to create two sets of wings.

Prior to the attempt, Daedalus warns his son to avoid complacency and hubris.

Daedalus instructs Icarus to avoid flying too low or too high—cautioning that the sea's moisture or the sun's heat could cause the wings to malfunction.

But Icarus becomes amazed by his flight and soars away.

The sun melts the wax on his wings and Icarus falls to his death.

The tale of Icarus offers a poignant lesson:

Avoid complacency and hubris at all times.

What makes you successful initially may eventually lead to your downfall.

This is often referred to as "The Icarus Paradox”—it shows up constantly in business, investing, and life:

In business, how many incumbents have we seen achieve success with one product, only to be disrupted when the market shifts under their feet?

Overconfidence and success blinds incumbents to the coming wave of disruption.

60+ companies from the 1966 Fortune 100 no longer exist!

In investing, how many successful investors have blown up spectacularly when they refused to adapt to new information?

Success with one strategy blinds the investor to market change or tail risk.

Look no further than the demise of LTCM...

Everyone is a genius in a bull market!

The Icarus Paradox is a cautionary tale for incumbents—for anyone experiencing success.

Remember: You're only as good as your last pitch...

It's also a rallying cry for the disruptors—the incumbent's tendency towards complacency and hubris is on your side in the battle.

More from Sahil Bloom

Sahil Bloom
@SahilBloom

Lindy Effect 101

With Bitcoin's return to the spotlight, debates on its long-term viability are raging. Its proponents contend @nntaleb's Lindy Effect says the technology is here to stay.

But what is the "Lindy Effect" and how does it work?

Here's Lindy Effect 101!

👇👇👇

1/ First, a few definitions.

The Lindy Effect is a theory that the future life expectancy of specific non-perishable items, like a technology or idea, is proportional to their age.

Put simply, the longer it has already lasted, the higher the likelihood it will continue to last.

2/ The term "Lindy effect" is a reference to Lindy's, a New York deli frequented by comedians in the 1960s.

While author Albert Goldman used the term "Lindy's Law" in a 1964 article, it was mathematician Benoit Mandlebrot who moved the dialogue towards the current definition.

3/ In his book, entitled The Fractal Geometry of Nature, Mandlebrot commented that the more stage appearances a Lindy's comedian made, the more future appearances he could be predicted to make.

The longer he lasted, the longer he would continue to last.

4/ @nntaleb built upon Mandelbrot's work, formally coining the term "Lindy Effect" in his book, Antifragile.

He noted the Lindy Effect with books - the longer a book has been in print, the longer it is likely to survive.

With no natural upper bound, power laws come into play.

Sahil Bloom
@SahilBloom

To outperform, you need serious problem-solving skills.

Fortunately, these skills can be learned.

THREAD: A simple, powerful mental model for thinking clearly and solving complex problems:

When solving problems, the human mind is wired to think in linear, logical, forward terms.

But as the problems get increasingly complex, this forward, logical process often fails.

Enter our simple, powerful mental model: inversion.

What is inversion?

Inversion is a mental model and thinking tool used by some of the world’s greatest thinkers and problem solvers.

Simply put, it says that when problems become challenging to solve forwards, they may be more readily solved backwards.

Inversion as a general thinking tool has been around for millennia.

Stoic philosophers had premeditatio malorum - “the pre-meditation of evils” - an exercise in which they would imagine the worst case scenario ahead of time.

It allowed them to make plans to avoid this outcome.

The formal mental model was popularized by German mathematician Carl Jacobi in the mid-1800s.

When faced with difficult problems (which happened frequently in his field of elliptic functions!), he had a strategy: “Man muss immer umkehren.”

Translation: “Invert, always invert.”

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Sahil Bloom
@SahilBloom

I recently asked my audience: What is the most genius marketing campaign of all time?

I got 2,000+ responses.

THREAD: 20 of the most iconic marketing and advertising campaigns in history:

De Beers “Diamonds are Forever”

Arguably the most iconic, controversial, and impactful marketing campaign in history.

Created the massive, global diamond industry.

(Note: This will be the subject of a future thread…)

Coke vs. Pepsi Superman Battle

Pepsi ran the Halloween ad on the left. Coke responded with the ad on the right.

Game, set, match.

h/t @perfexcellent

The Original Apple iPod Campaign

“1,000 songs in your pocket”

Simple, intuitive, genius.

Starbucks Wrong Names on Cups

Starbucks employees writing the names of millions of customers in hilariously wrong ways to get them to post the images across social media with Starbucks branding.

For free.

h/t @SleepwellCap

Sahil Bloom
@SahilBloom

10 common mental errors that derail decision-making:

Survivorship Bias

History is written by the victors.

But in studying and learning from "survivors”—and systematically ignoring "casualties”—we create material distortions in our conclusions.

We overestimate the odds of success because we only read about the successes!

Naïve Realism

Humans generally think very highly of themselves.

We tend to believe that we see the world with perfect objectivity.

We also assume that people who disagree with us must be ignorant, uninformed, or biased.

This error sits at the core of many societal problems.

The Dunning-Kruger Effect

Humans are notoriously incapable of objective evaluation of their own competency levels.

People with a low ability at a task are prone to systematically overestimate their ability at that task.

Example: Everyone is a genius in a bull market.

Loss Aversion

Humans tend to prefer avoiding losses vs. achieving gains—the pain of losing something is more powerful than the pleasure of winning it.

We will typically do more to avoid losses than we will to seek gains.

We systematically overvalue what we already have.

Sahil Bloom
@SahilBloom

Shared a lot of wins publicly in 2021, so it feels appropriate to share the losses just as publicly.

Here are my 10 biggest Ls from 2021 (and what I learned from each one):

Dopamine Addiction

Humans were not made for social media—the dopamine hits are dangerous.

I fell victim.

On several occasions, I found myself constantly refreshing my notifications on a viral thread.

It was gross.

I’m learning to physically force separation to avoid it.

Hustle Culture Fail

I spent the better part of the last decade as a hustle culture aficionado.

Then I burned myself out and was totally incapable of thinking creatively.

I made a change. Now I:
• Work like a lion
• Sleep 8 hours
• Take more walks

My life & work have 10Xed.

Solana Fail

I invested in Solana early and was riding high when it hit $30+ in April—10X+ on my investment.

I sold it and thought I was the next Warren Buffett.

Then it hit $100, $200, & $250—as I stubbornly sat on the sidelines refusing to re-enter.

I am not Warren Buffett.

The Hedonic Treadmill

I tweeted this in May—and then failed to practice what I preached.

Every win felt a bit less exciting. It’s part of our biology, but it was no way to live.

Measure internally, not externally.

The Hedonic Treadmill is real.

Humans have a tendency to quickly return to a baseline level of happiness after positive events.

Step off the treadmill.

Focus on increasing your happiness baseline, not on the height or frequency of the spikes above it.
— Sahil Bloom (@SahilBloom) May 21, 2021

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$Emperor\U0001f451$

Emperor👑
@EmperorBTC

Technical Analysis Masterclass- Part 2

'Entering the trade'

Entering a trade without ascertaining a certain things is gambling.

In this masterclass we will learn the pre-requisites to enter a trade.

DON'T ENTER A TRADE WITHOUT DETERMINNG THE FOLLOWING.

Please share.

We understand what reward to risk (popularly called risk to reward) is.
It will be denoted by R:R.

We will also try to bust a few myths about R:R and how to avoid losing trades.

Before entering a trade, you need to determine 3 things.

1. Entry trigger
2. Stop loss
3. Target

1. Entry trigger = Reasons for entering a trade. There could be multiple reasons or a single reason for entry.

Generally a set of reasons AKA confluence is a higher probability trade and a generally a safer entry.

Example of an entry trigger.

2. Stop Loss.

The price in the opposite direction of the trade where the trade is exited, at a loss.

At this level, the reason for the entry becomes invalidated according to TA and the price can then move in the opposite direction, probabilistically.

3. Target is the possible price level that the asset might touch based on previous trends or confluence AND where a possible reversal could occur.

Target is the next path of least resistance from where the price might reverse.

We will always ONLY use TA to determine all 3.

Khatvaanga
@khatvaanga

Sri Gurubhyo Namah.
Some tweets on Adi Shankaracharya and in particular the Guru Parampara of @sringerimath. [I had done this series earlier 5 years ago on account of Shishya Sweekaram].

Adi Shankara established the Sringeri Peetham as the 1st of 4 amnaaya peetams.

The four being
1. Sarada Peetam at Sringeri.
2. Govardhana Peetam at Puri
3. Kalika at Dwaraka
4. Jyothir at Badarikashramam.

He installed his 4 most prominent shishyas as heads of the peetams.

Sureshwaracharya was assigned to Sringeri as its head.

Sringeri is a corruption of Rshyashrunga giri.

Rshyashrunga maharshi [and his father Sri Vibandhaka Maharshi] did their tapas at this place.

It is at Sringeri that Shankara spent 12 of His precious 32 years!!

That gives you and idea how much He loved this place.

Rshyashruga maharshi had a horn on his forehead, a result of being born to a deer. His mere presence was enough to shower rains!!

Rshyashrunga was one who led Putrakamesthi Yaagam of Dasaratha Maharaj and which resulted in Sri Rama's birth!!

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Anu Satheesh
@AnuSatheesh5

Ameda Temple
Ernakulam, Kerala 🚩
#keralatemples

Ameda Ksetram is located in the banks of Vembanad Lake. Temple is very unique and Powerful Sarpa Kavu.
Parashurama did Prathishta here. Vilakku which was lighted by Parasurama is still seen inside the temple.

The oil from this lamp is given to bhakthas for recovering from illness.

Sthala puranam says that, Once, when Parashurama was travelling through Kerala, he reached this place. As it was evening, he stepped into the Lake for Sandhya Vandanam
At that Sapthamathrukkal 👇

(Brahmini, maheshwari, kowmari, vaishnavi, varahi, indirani and chamundi) were travelling there on a tortoise through the water. The tortoise was unable to move, because the Water had made its way for Parashurama. The place where the tortoise became Still came to be known as 👇

Aama Ni Nidayam' ( Aama means tortoise) and later become ‘Ameda’. Parashurama came to know about the journey of Sapthamathrukkal. Thus, he did Prathishta for the Sapthamathrukkal here.
7 forms of Aadi Parashakthi are Sapthamathrukkal. Veerabhadra and Ganesha have Sannidhi here.

The main Garbhagriham in the temple is the Sapthamathrukkal. There are Sannidhi to Nagas, Nagayakshi and Vishnu too. Sarparadhana or snake worship is done here. Naga Panchami is famous here. Those who have Naga Dosham come here and get relieved of their Doshas.
🕉🙏🕉

$Antonio Garc\xeda Mart\xednez$

Antonio García Martíne...
@antoniogm

Observing the public conversation around FB, and the private ones happening among techies and ex-FBers, I think the mutual misunderstanding is worse than when I set out two years (and 500 pages) ago to (in a small way) bridge that gulf.

We're basically fucked.

The tech world has gotten so huge, self-reinforcing, and insulated from reality they can no longer even vaguely look at themselves (and their actions) as others do. They just live on a different planet than most people.

Conversely, the average tech consumer doesn't understand the technology that has slowly taken over their lives, and their designated emissaries to figure it out--politicians, pundits, regulators, journalists--understand it barely better than they do, and have their own agendas.

To say more than generalities for a moment, here's what I think is likely the core problem.

Techies take weird, improbable visions, and make them realities: some BS pitch deck to a VC, mixed with money and people, really does turn into some novel thing.

Most people work inside a legacy industry that's evolved that way over time (usually for good reasons), and they think about the future via some analogy with their present (which is a function of a long-ago past). The interruption that tech will introduce is often hard to grasp.

Rich Energy
@rich_energy

Great seeing one of the fastest natural drivers of the last decade Robert Kubica today with @WilliamsRacing at @COTA #USGP #f1 #robertkubica #Poland #richenergy