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AcquiredNovember 3, 2021
Complexity Investing & Semiconductors (with NZS Capital)
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Guest: NZS Capital)
Of our 65+ sources for the TSMC episode, one stood above the rest: a wonderful Knowledge Project episode with Brinton Johns and Jon Bathgate of NZS Capital laying out the state of the semiconductor market. When coincidentally we met Brinton a week later, we knew fate was telling us we had to dig deeper. It turns out NZS has a lot more to teach Acquired than just about semis! Here we dive into their fascinating philosophy of "complexity investing", which was born out of their interactions with the world-famous Santa Fe Institute (of W. Brian Arthur and Increasing Returns fame!)... and of course we also throw in some semiconductor shop-talk for good measure. :)
4 book mentions in this episode.
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Books Mentioned
The Origin of Wealth
Eric Beinhacker
“Somebody suggested this book to me called The Origin of Wealth by Eric Beinhacker. It was a slog, taking six months to get through it.”
Sentiment: Critical Analysis
Trigger: investing philosophy and complexity theory
For: Investors interested in complexity theory
Key quote: “Origin of Wealth was a slog. I think it took me six months to really get through it.”
The host mentions 'The Origin of Wealth' to highlight its challenging nature and its role in shaping their understanding of complexity theory in investing. They emphasize that the book prompted a shift in their thinking about how to approach investment strategies.
ASIN: 157851777X
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Complexity
Mitch Waldrop
“At the same time, someone suggested Complexity by Mitch Waldrop to Brad. We both read those books.”
Sentiment: Passing Reference
Trigger: complexity theory in investing
For: Investors seeking new frameworks
Key quote: “somebody suggested this book to me called The Origin of Wealth by Eric Beinhacker.”
The host mentioned 'Complexity' by Mitch Waldrop as part of a discussion on the investing philosophy of NZS Capital. It was referenced alongside another book to illustrate the search for better frameworks in understanding investment challenges.
ASIN: B083YVF58B
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“The frequency of every word in the book, Moby Dick, forms a power law, with 'the' mentioned 15,000 times and 'and' 7,000 times, illustrating the concept of power laws in language.”
Sentiment: Deep Dive
Trigger: power law dynamics
For: investors and data analysts
Key quote: “if you plot the frequency of every word in the book, Moby Dick, that actually also forms a power loss.”
The host mentions 'Moby Dick' to illustrate how word frequency in literature can reflect power law distributions, similar to other phenomena in nature and economics. This connection serves to emphasize the importance of understanding non-linear dynamics in investment strategies.
ASIN: B0FJ6DBKBL
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“There's this great book by the way called 'The Idea Factory', it's the history of bell labs. If you're interested in that book I'll be sure to check it out.”
Sentiment: Highly Recommended
Trigger: history of semiconductors
For: Individuals interested in semiconductor technology and its history
Key quote: “there's this great book by the way called uh the idea factory it's the history of bell labs”
The host mentioned 'The Idea Factory' as a valuable resource for understanding the history of Bell Labs and its contributions to semiconductor technology. They emphasized that anyone interested in the development of semiconductors should definitely check out this book.
ASIN: 0262731428
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