If you prefer to receive these recaps weekly instead of daily posts, you can manage your subscription preferences right by viewing this email on the web. Look for your profile icon in the top right of the browser, and you can update your settings from daily to weekly (and vice versa) there. However I can get you the full narrative arc without it feeling cluttered - I'm just happy you're here!

Kris Abdelmessih just handed readers a formula they'll use in their head for the rest of their life, whether they're at a poker table, buying insurance, or deciding on a deductible. The real trick isn't the math so much as knowing when you actually have an edge worth sizing versus when you're just holding favorable-looking odds that don't mean what you think they mean.

After This Post You Will Be Sizing Bets In Your Head

Let's connect some dots from this week's notes...

Gary Mishuris handed me a WWII term I hadn't touched since high school, and it's the perfect shape for a mistake I see everywhere in investing. Soldiers leave an island, the towers stay, and someone builds their own tower expecting the same cargo to fall from the sky, mistaking the visible form for the invisible mechanism underneath it. Clone an investor's moves without the macro conditions, the competition, the timing they had, and you've built a tower too.

Quote from the Personal Archive - Gary putting words to something I'd felt but never named

"If you don't totally understand how it works, you're susceptible to missing some key steps."

"If what I build only benefits me, then it's not big enough." Charlamagne wants to build the BET of podcasting, and the smart part isn't the ambition, it's that his flagship show stays separate from the platform brand carrying it. Black Effect can scale like a startup while each show stays a scene, which only works if nobody flattens the niche chasing the highest bidder.

Quote from the Personal Archive - Charlamagne on what the platform actually has to hold

"The BET that I grew up on - the BET that you could go to and get a little bit of everything. You could get entertainment, but you could also get education. You could get inspiration."

George Glass mixed Jill Scott's breakout album, and he doesn't exist. Jazzy Jeff knew a hip hop producer's name would taint how a soul record got judged in the late 90s, so he borrowed a fake boyfriend from a Brady Bunch episode and put that on the credits instead. Real credit went to the work, not the name that could get in its way.

Quote from the Personal Archive - the whole lesson, stated plainly

"You put the project above all else."

"A bee bit my bottom. Now my bottom's big." That's the whole joke, and it survived a Simpsons writers room full of geniuses because Conan O'Brien trusted his own gut laugh over the room's judgment. Matt Groening told the story on Conan's podcast, and it's become my go to reminder that you don't have to out-genius the room, you just have to know what you know.

Quote from the Personal Archive - the reminder for my fellow frequent impostors

"Doesn't matter how smart the room is. Sometimes the bit just works."

"I would be doing it anyway, I'm just figuring out ways to share it since it's already happening." That's become my answer whenever someone asks where I find the time, and it doubles as a filter. Good taste means knowing what you'd do anyway is worth doing, bad taste is letting someone else's content need borrow your sensibility.

Quote from the Personal Archive - the sentence I keep repeating back to myself

"You want to have good taste in what you would just do anyway."

Justin Castelli picked "Juicy" for our new listener-submission format, and I didn't see the American life angle at first. Joseph Moore and I talked our way into it anyway, corners and trouble on one side, a mother's version of events on the other, and a kid whose real work was radio shows and word play that no gradebook would ever count. Making it looks like the point of the song, but what it's actually clocking is everything that had to happen first, the same thing this whole week keeps circling back to.

Quote from the Personal Archive - what I walked away believing about the song

"I'll take this reminder about how more counts as work than what the average person labels work."

Jack Raines turned a $6,000 Roth IRA into roughly $400,000 on SPAC trades, then lost $157,000 of it in three minutes on a concentrated earnings bet. We got into it on Excess Returns, and the real conversation wasn't the trade, it was the difference between having an edge in one weird corner of the market and just taking broad risk and calling it the same thing. That's the whole Kelly problem in one guy's actual bank account.

David Rosenberg came back on to explain why he wants the bonds everyone hates, sitting at 50% equities, 30% bonds, 10% cash, 10% commodities while everyone else chases concentration. He's sizing around where he thinks the crowd's edge estimate is wrong, and he's been early before too.

Jack Forehand and I closed the week with the Excess Returns Weekly Wrap, pulling together Rosenberg, Jim Paulsen, Jenny Johnson, Bob Pozen, and Alex Edmans. Paulsen's read stuck with me the most, seven of eleven S&P sectors have barely grown while tech and commodity names carry the whole earnings story. Looks like broad strength. Isn't.

Also this week, Tony Greer had me on The Macro Dirt Podcast to talk more about the Cultish Creative Music Club's American Experience series, including our new take on Billy Joel's "Scenes from an Italian Restaurant", and Kris Abdelmessih and I went even deeper on the Kelly Criterion piece above on Notes on Notes if you want the extended cut.

Where in your life are you copying the form of someone else's success without understanding the mechanism underneath it

WHAT'S ONE THING YOU'D DO EVEN IF NOBODY EVER SAW IT

Name a time your name almost got in the way of your own work, and what you did about it

WHOSE JUDGMENT DO YOU TRUST OVER THE ROOM'S, AND WHY

What's a bet you're sizing right now based on odds that just look favorable, not odds you've actually earned

WHAT COUNTS AS REAL WORK IN YOUR LIFE THAT NOBODY ELSE WOULD PUT ON A GRADEBOOK

Where have you mistaken effortless-looking success for something that didn't take real work to build

As always, I did my part, now it's your turn to write some reflections in your own Personal Archive.

(then, be sure to let me know where you're keeping it, I'm in search of the others too)

ps. Claude helped me organize and synthesize these thoughts from the week's posts. If you are curious how I use AI, read this post: Did AI Do That: Personal Rules