Hi,

I originally wanted to lay out a cohesive narrative to help maybe a few people “win” this decade (2021-2030) or at least prevent them from losing money.

But the more I wrote, the more frustrated I get. Because writing for the few people (who would read a 1000+ word essay) would not drive sufficient change I wish.

You can read more about what I’m doing: 2021 plan.

I’m publishing this despite being woefully incomplete (20 pages Google docs… maybe only 20% of what I want to say), because for the layperson, it can still be incredibly helpful. It may also serve as a pre-text to what I may later discuss.

We truly don’t understand the mind, the nature of stories… thereby, we truly don’t understand how fallible we are. How stupid we are. I know I don’t know a lot. But I know enough to always take a step back on any claims (economics, politics, stocks, etc.)

It’s “sad” but perhaps, this fantastic mind we have is what enables life to be worth living too. Generally, we choose to live in the fantasy we want.

If there’s one “tip” I can quickly off-quip, it’s do not buy NFTs. These will proliferate like locusts for the decade. You have no idea if the bids are spoofed. There will always be an infinite supply of stories. I may write a guide to evaluating NFTs soon, but as a rule of thumb, don’t.

Anyways, I may (in the future have update posts and tag it #storyeconomy or something). We’ll see.

 


We are living in the Story Economy.

The stories people tell, the stories you tell, directly move trillions of dollars.

  • 100s of people will make billions ($1B+). (Elon Musk, Bitcoin, Chamath, …)
  • 1000s of people will make millions ($1M+). (traders, entrepreneurs, populist leaders, etc.)
  • 1,000,000s of people lose thousands (-$10K). (ill-informed people)

The common advantage for those who make money (besides a lot of luck, hard work, and sometimes questionable ethics) is that they understand we’re living through a story economy (how memes spread, how emotions works)…

This is not a get-rich-quick guide.

I’m really only trying to protect you. Because on the internet, anyone can be a dog.

It’s best to not assume you are one of the lucky l00,000s, because there’s a lot of smart, lucky, hard-working dogs out there. Most of the money transfer is zero-sum (the opposite of “win-win”).

I do provide solutions (at the individual and societal solutions) near the end though, but it’s useless without context.

First, we need to

(1) understand what exactly is a story and

(2) how did we get here?

What exactly is a story

A story is a representation – of reality or fiction.

It’s our reason for living, it’s who we are.

  • It’s the movies, the video games, music we love.
  • It’s the reason we are inspired by food. It’s our conviction that the artisan chocolatier is important. (Foodie legend has it that you can taste the story.)

A story of fiction is the one we’re most familiar with.

But for the purpose of this post, we’re only going to focus on the story of reality. Because that’s where the real money’s at.

Whether it’s news to you, almost (if not) everything is a story.

And almost everything you read or watch is part of a bigger story. (Tesla = the story of Elon Musk).

Stories are the only thing we know. And they sort of function like Russian Nesting Dolls.

The Story Problem

Now here’s the problem:

Stories are representations. Misrepresentations (misinterpretation) happen because they ARE necessarily imprecise.

There’s a certain duality (eg yin yang symbol) – stories are both representations and misrepresentations.

A story on top of a story are further abstractions. It’s an endless game of telephone.

Our understanding of the world should be accretive. Like the Scientific Method, our understanding of the world should build on top of each other like a pyramid (or Minecraft tower) with the center being “truth”.

But is that how it works?

Not really. Not at all.

There’s a lot of terrible analogies I can give, but sometimes they’re like giant Jenga towers that never topple.

Story Society (2009 – 2019)

Great Financial Crisis

After the Great Financial Crisis (GFC), we saw a crisis (and loss of trust).

We saw how so many people felt the institutions (which are stories in themselves) failed.

We think of how the pandemic has accelerated certain digital trends. But the GFC was really the first accelerant.

https://fred.stlouisfed.org/series/EMRATIO

Many no longer trusted mainstream news. And many felt empowered to tell their story on “what’s really happening”.

For the first time, everyone had a reason to believe and a singular example that showed the failure in trust.

Social Media

Early Middle Now (as of 2021)
Digg, Reddit, StumbleUpon, 4Chan, Tumblr, YouTube, Myspace Vine, Instagram, Facebook, Twitter, YikYak, Secrets TikTok, Clubhouse, Twitch

I’ve described a “story” abstractly so far

Here’s the thing: In most instances, there really are very few “truths” that are personally verifiable. Because information is decentralized.

Example – Climate Change

    1. Take something as simple as climate change. (Or immigration)
      1. Understanding climate change is as simple as 1+1=2, right?
      2. “What reason do I have that it is real?”
        1. “Because some high-falutin NYT columnist tells me it’s real?”
          1. “I don’t trust him, he’s part of the MSM.”
        2. There are very few experiential truths.
          1. One undeniable truth is that climate change initiatives will cause a net job loss in fossil fuel industries. If this is all you/a friend/family member know, can you blame them for viewing this as yet another way to screw the Average Joe?

I very much support climate change initiatives. But that’s more so a fact that I believe in my ability to assess credible people (scientists). Not because it’s as obvious as “1+1=2”.

The risk/reward of believing is also very asymmetric.

  1. If climate change is real, we save humanity.
  2. Incalculable innovation and net jobs.

Yet, I can’t deny the fact that if a few assumptions changed (if my life was different) can lead my beliefs to a very different path.

There’s 2 central points to this:

  1. The truth is often so hard to decipher, so it’s worth having humility.
  2. Ultimately, all these stories add up to even bigger stories and thus philosophies
  3. This is why “misinformation” can be so incredibly disrespectful. There are many lies, but this is often a game of telephone. Where do you start censoring?
    1. If it was as simple as true/false statements, it’d be very easy.

Now, I’ve made all the points thus far because as I’ve hopefully shown, this is the farthest thing from an easy problem. And in 2020, people have figured out a way to make a lot of money.

Information is important, but mostly we read what fills our emotional needs.

This is not groundbreaking stuff.

You know this to be true, from your own daily habits. But this is destructive too.

Story Economy (2020 – Present)

Now, I want to switch to how we’ve transformed into a Story Economy.

There are really 2 parts to the Story Economy.

  1. Financial markets
    1. Stocks
    2. Crypto
  2. Internet culture / creator economy
    1. Across TikTok, Instagram, Twitch, YouTube.

Here’s the key thing, 2 things have happened

  1. Internet culture
    • The supply of mentally-worsened people have skyrocketed (thanks to the pandemic).
    • You can tell a “compelling” story in 15 seconds.
    • the kicker: because of the emotion (parasocial) relationship can be so intoxicating, people oft support their favorite creators with all their income
  2. Financial markets (stocks, crypto)
    • people have figured out the ability to tell stories can directly change the course of history
    • the kicker: these thousands of people have “100x leverage” (oversimplifying call options)

More than ever, there is an incentive to make outlandish claims

  • Because the more inspirational/believable (or even funnier) the stories, the likelier it can become reality.
  • Because humans are more vulnerable when frail (which is the case right now).

 


 

This is where I’ll stop.