NOAH
JACOBS

TABLE OF CONTENTS
2025.02.09-On-Overengineering
2025.02.02-On-Autocomplete
2025.01.26-On-The-Automated-Turkey-Problem
2025.01.19-On-Success-Metrics
2025.01.12-On-Being-the-Best
2025.01.05-On-2024
2024.12.29-On-Dragons-and-Lizards
2024.12.22-On-Being-a-Contrarian
2024.12.15-On-Sticky-Rules
2024.12.08-On-Scarcity-&-Abundance
2024.12.01-On-BirdDog
2024.11.24-On-Focus
2024.11.17-On-The-Curse-of-Dimensionality
2024.11.10-On-Skill-as-Efficiency
2024.11.03-On-Efficiency
2024.10.27-On-Binary-Goals
2024.10.20-On-Commitment
2024.10.13-On-Rules-Vs-Intuition
2024.10.06-On-Binding-Constraints
2024.09.29-On-Restrictive-Rules
2024.09.22-On-Conflicting-Ideas
2024.09.15-On-Vectors
2024.09.08-On-Perfection
2024.09.01-On-Signal-Density
2024.08.25-On-Yapping
2024.08.18-On-Wax-and-Feather-Assumptions
2024.08.11-On-Going-All-In
2024.08.04-On-Abstraction
2024.07.28-On-Naming-a-Company
2024.07.21-On-Coding-in-Tongues
2024.07.14-On-Sufficient-Precision
2024.07.07-On-Rewriting
2024.06.30-On-Hacker-Houses
2024.06.23-On-Knowledge-Graphs
2024.06.16-On-Authority-and-Responsibility
2024.06.09-On-Personal-Websites
2024.06.02-On-Reducing-Complexity
2024.05.26-On-Design-as-Information
2024.05.19-On-UI-UX
2024.05.12-On-Exponential-Learning
2024.05.05-On-School
2024.04.28-On-Product-Development
2024.04.21-On-Communication
2024.04.14-On-Money-Tree-Farming
2024.04.07-On-Capital-Allocation
2024.03.31-On-Optimization
2024.03.24-On-Habit-Trackers
2024.03.17-On-Push-Notifications
2024.03.10-On-Being-Yourself
2024.03.03-On-Biking
2024.02.25-On-Descoping-Uncertainty
2024.02.18-On-Surfing
2024.02.11-On-Risk-Takers
2024.02.04-On-San-Francisco
2024.01.28-On-Big-Numbers
2024.01.21-On-Envy
2024.01.14-On-Value-vs-Price
2024.01.07-On-Running
2023.12.31-On-Thriving-&-Proactivity
2023.12.24-On-Surviving-&-Reactivity
2023.12.17-On-Sacrifices
2023.12.10-On-Suffering
2023.12.03-On-Constraints
2023.11.26-On-Fear-Hope-&-Patience
2023.11.19-On-Being-Light
2023.11.12-On-Hard-work-vs-Entitlement
2023.11.05-On-Cognitive-Dissonance
2023.10.29-On-Poetry
2023.10.22-On-Gut-Instinct
2023.10.15-On-Optionality
2023.10.08-On-Walking
2023.10.01-On-Exceeding-Expectations
2023.09.24-On-Iterative-Hypothesis-Testing
2023.09.17-On-Knowledge-&-Understanding
2023.09.10-On-Selfishness
2023.09.03-On-Friendship
2023.08.27-On-Craftsmanship
2023.08.20-On-Discipline-&-Deep-Work
2023.08.13-On-Community-Building
2023.08.05-On-Decentralized-Bottom-Up-Leadership
2023.07.29-On-Frame-Breaks
2023.07.22-On-Shared-Struggle
2023.07.16-On-Self-Similarity
2023.07.05-On-Experts
2023.07.02-The-Beginning

WRITING

"if you have to wait for it to roar out of you, then wait patiently."

- Charles Bukowski

Writing is one of my oldest skills; I started when I was very young, and have not stopped since. 

Age 13-16 - My first recorded journal entry was at 13 | Continued journaling, on and off.

Ages 17-18 - Started writing a bit more poetry, influenced heavily by Charles Bukwoski | Shockingly, some of my rather lewd poetry was featured at a county wide youth arts type event | Self published my first poetry book .

Age 19 - Self published another poetry book | Self published a short story collection with a narrative woven through it | Wrote a novel in one month; after considerable edits, it was long listed for the DCI Novel Prize, although that’s not that big of a deal, I think that contest was discontinued.

Age 20 - Published the GameStop book I mention on the investing page | Self published an original poetry collection that was dynamically generated based on reader preferences | Also created a collection of public domain poems with some friend’s and I’s mixed in, was also going to publish it with the dynamic generation, but never did.

Age 21 - Started writing letters to our hedge fund investors, see investing.

Age 22 - Started a weekly personal blog | Letters to company Investors, unpublished. 

Age 23 - Coming up on one year anniversary of consecutive weekly blog publications  | Letters to investors, unpublished.

You can use the table of contents to the left or click here to check out my blog posts.

Last Updated 2024.06.10

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On Capital Allocation

XLI

2024.04.07

Money and time are effectively the same thing. The only difference is that you can’t get back your time.

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Money is Time

We are all capital allocators, even if we have no capital.

Money is the resource that is the proxy for the other resource that matters, time. 

If you have even $20 in your bank account, you have five to ten hours of internet labor stored up. Afterall, you can pay somebody $4 an hour to do research or format spreadsheets or throw together a slide deck for you.

If you can make $20 an hour, you have leverage. You can go work for five hours at $20 an hour, and now you have $100… or, 25 hours of someone else’s time to go do things. 

Well, what are you going to have them do? If you want to play the game called capitalism, you’ll try to find a way to have them do something worth more than $4 an hour to you or that creates more than $4 in value. If you can find something that is worth $5, and you invest the time to help your people learn how to do it for $4 an hour in such a way that preserves quality, then you’re making a 25% Return on Investment (ROI). You give them $4 an hour, and you create $5 in value. 

So, you go to work for five hours, make $100, and then turn the $100 into $125. Wow! Easy, right?

Well, no, this is a cartoon example, and let me tell you, there are a lot of ways to pay somebody $4 an hour and never see it again. If you’re curious, ask me for a list sometime. 

The point of this example is just to drive home the tight relationship between money and time. And it doesn’t have to be $4 an hour labor, either. You can scale up the numbers and do the same thing with a $25 an hour software engineer, or $50 an hour consultant, or a $200 an hour software engineer, or $150 an hour consultant

Managing Money

Let’s say you run a hedge fund.

As an actual money manager, your job is to select where to put money that has the highest probability of completing a predetermined goal. If you tell everyone that you beat the market when Vietnam is unstable and you lag a little bit at all other times, then you better beat the market when Vietnam is unstable. Other than fundraising and communicating with investors, your job is to find and analyze financial instruments that help you achieve that goal, which again, is easier said than done. 

However, you’re not only playing this game of allocating investor capital, you’re also playing the meta game of allocating your time and your firm’s capital to make sure you’re spending your bandwidth on the right things. Investing is really unbounded, you can go down a lot of rabbit holes and never come out alive. 

It’s terrifically difficult to figure out when you’re hyper fixating on the wrong thing. Maybe you’re investing in North American rail and focused on the logistical efficiencies of intermodal (those big freight containers that rest on the rail cars), but everyone else is looking at whether or not the rail lines will lay off workers in the recession or just stop hiring–and trust me, there really is a difference.

The question becomes, is the thing you’re fixating on very important? Has everyone else already considered it? Are they looking at the right thing? Is the thing that they’re looking at going to matter more to the whole “market” than the thing you’re looking at? If you are right, on what timeline does it become important? This quarter? Two years from now? And if you’re right about the timeline, what is the best financial instrument or collection of financial instruments to make money off of it? And, of course, when should you enter the position and when should you leave it?

Each one of these questions could be hours or days of research on their own, although the latter few are often where you’ll find some investors create repeatable systems to descope the problem and make it more tenable. 

This meta game of investing your time and resources into doing this sort of research is what enables you to invest your client’s funds in the first place.

All In

One thing I didn’t understand when managing money but I feel I am finally starting to get while helping to lead a startup is how you can go all in on something. 

With an early stage startup, a common strategy that we have been emulating is to treat building a business like running science experiments. You come up with an idea or hypothesis, you test it as quickly as possible, and then break it if need be. 

As you get closer and closer to a theory that is in line with reality, though, you start to invest more in each hypothesis test. In a startup, when you have enough confidence, it can make sense to go nearly 100% in on one product or idea, especially when early stage. 

If you end up being wrong, you’re wrong. You got to learn though, and if you’re paying attention, you probably got to learn a lot. If you’ve kept costs low, the bank account can also go low without the startup failing. Afterall, we’re not necessarily talking about going all in with all the money in the bank, we’re talking about going all in with you and the rest of the team's time. 

On the other hand, if a hedge fund burns through 50% of its capital, the chance of it staying afloat is near zero. Hence, you'll rarely find a hedge fund with a high chance of survival going all in on one idea. If you tell investors you’ll keep up with the market and then evaporate 75% of their capital because you over-fixated on trains, you’re in for a rude awakening.



Caption: Going all in one thing as a hedge fund would really be a “train wreck”…

For a hedge fund, that all in might be allocating all of your investors capital as well as all of your resources in the meta game to researching and implementing that one idea. For a startup, there’s only one game. If you have investor capital, that resource is interchangeable with your time; do you do action A yourself, or do you pay someone to do action A so you can do action B?

Remember, we’re talking about an early stage startup; I’m sure that the similarities between managing money and running a startup increase with the stage of the venture. 

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Lest we forget my poetic streak, unlike money, your own time is not something you can get back. So, whatever you invest it in, make sure it’s worth it to you… make sure it’s something you want recorded on your tombstone and read aloud at your funeral. 

Live Deeply,