Welcome to The Nightcrawler, a weekly collection of thought-provoking articles and analysis on technology, innovation, and long-term investing. The Nightcrawler is published every Friday evening by Eric Markowitz, Nightview Capital’s Director of Research.

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In this evening’s email… 

Quote of the week: “I would rather have questions that can’t be answered than answers that can’t be questioned.” ― Richard Feynman

Intellectual compounding over a lifetime

Whether it’s building a career or achieving superior investment results, we all want to achieve great things. But how? This 1986 speech by the famed mathematician Richard Hamming frames the subject masterfully. Hamming, who worked on the Manhattan Project and pioneered some of the most important projects at Bell Labs during his 15-year career, explores the psychological drive, innate passion, and desire to learn that’s needed to outperform.

“Intellectual investment is like compound interest,” Hamming says. “The more you do, the more you learn how to do, so the more you can do, etc. I do not know what compound interest rate to assign, but it must be well over 6%—one extra hour per day over a lifetime will much more than double the total output. The steady application of a bit more effort has a great total accumulation.” He continues: 

• Key quote: “The desire for excellence is an essential feature for doing great work. Without such a goal you will tend to wander like a drunken sailor. The sailor takes one step in one direction and the next in some independent direction. As a result, the steps tend to cancel each other out, and the expected distance from the starting point is proportional to the square root of the number of steps taken. With a vision of excellence, and with the goal of doing significant work, there is a tendency for the steps to go in the same direction and thus go a distance proportional to the number of steps taken, which in a lifetime is a large number indeed… the difference between having a vision and not having a vision is almost everything, and doing excellent work provides a goal which is steady in this world of constant change.”

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Luck vs. skill in investing

The writer Frederik Gieschen published an essay this week that unpacks the complex relationships between skill, luck, analysis, experience, and intuition when it comes to investing. The piece explores a painfully true investing meme many of you might be familiar with: an image depicting the bell curve distribution of investing mindsets (from simpleton on the left to genius on the right, where most of us reside in the uncomfortable middle-ground). “What makes this journey so frustrating is that the relationship between effort and return inverts,” Frederik writes. “Both the left and the right seem to move quickly and effortlessly, in flow with the market. And in the middle, the relationship to luck changes.” He continues: 

• Key quote: “Returns on the left are all luck, no skill. However, when people on the left get lucky, they lean into it. It’s a streak, this market is hot, let’s go, baby! Players on the right understand the complex relationship between luck and skill which can be nearly impossible to disentangle. Even so, when they get lucky, they accept it with gratitude. They keep their ego in check and maintain a healthy respect for the vast, complex, and unpredictable market.”

A few more links I enjoyed: 

An Interview with Microsoft CTO Kevin Scott About Building Platforms on AI – via Stratechery 

• Key quote: “What we’re seeing right now is there’s relatively little downside in having an excess of compute, and that’s theoretical because the reality is we do not have excess compute. The demand for all of these AI products and services is so high right now that we are just doing crazy things to try to make sure that we’ve got enough compute and enough optimization of the entire system so that we can fulfill the demand that we’re seeing.”

The Age of the Sovereign Creator – via Hamish McKenzie

• Key quote: “The Aggregation Era has thus birthed significant new economies, but it has also given the individuals and small teams who rule these platforms almost godlike powers. Today, for good or ill, the fate of the vast majority of the world’s creators rests in the hands of Mark Zuckerberg, Elon Musk, Sundar Pichai, and the Chinese Communist Party.”

Better Tools, Bigger Companies – via Packy McCormick

• Key quote: “Techno-Industrials will create more value and wealth over the next decade than pure software companies for the simple reason that the combination of atoms and bits is more powerful than bits alone. In a couple of decades, I think we’ll see more Techno-Industrials with higher market caps than the largest current incumbents, and that those market caps will be much higher than they are today, as technology unlocks better products, higher margins, and faster growth.”