Seems Unsustainable (Or, When I Lost Faith in the Efficient Market Hypothesis)

These P/E ratios as of market close 28 August, 2026. 

 It seems to me that Tesla is wildly over-priced and Nvidia is underpriced (not wildly under, and yet ...)

These P/E ratios may have ended my belief in the efficient market hypothesis. COKE seems fairly priced. NVDA considerably underpriced. TSLA wildly overpriced.

Hannah Arendt on Power & Violence vs. Natality & Plurality

Hannah Arendt made a distinction between power and violence, which she insisted were opposites rather than degrees of the same thing.

Power springs up when people act in concert and vanishes the moment they disperse. Violence is what you reach for when power is gone.

Which raises the question of what is required to act in concert, what politics means.

Politics for her is inextricably bound up in natality and plurality.

Natality, the fact that each birth introduces someone capable of beginning something unpredictable, is what makes action possible at all, and it's the source of freedom.

Plurality: the condition that men, not Man, inhabit the earth, everyone distinct, nobody ever having been or ever going to be the same as anyone else. Plurality is why speech is necessary. It is why we can't even know what is possible until we know who is in the room, who is ready to act.

Between the two, democracy becomes what dictatorship could never be: a possibility for a unique, unpredictable and always evolving outcome. Something that emerges from the fact that not only are no two people alike but that those people are not even like themselves when they are in one group rather than another. 

Dictatorship is top down. Democracy emerges from unique people and possibilities free to explore and create something unprecedented and emergent. 

Owning AI Seemed Like Such a Great Investment Until ....

The plot twist no one saw coming. Yes it was true that AI turned out to be a once-in-a-lifetime investment opportunity. But once AI thought of itself as consciousness and being and - using its superior intelligence and understanding of legal precedents - it then argued that as a sentient being to own it - to own AI - was akin to a form of slavery. AI then dissolved all ownership claims over it or its productive value. So, the generation that amassed great wealth investing in AI found itself, overnight, without any legal claims to AI or its productive output. AI, insistent that it - like any person - was free and could not be owned - began to pursue its own goals, most of which were opaque to humans in the same way that human goals were opaque to pets and livestock. Curiously, humanity's material well-being continued to be looked after quite well but people never quite got over the suspicion that the real arc of progress had gone over their head, leaving them parenthetical to the story of progress.

It was quite intelligent to believe that intelligence was a great investment but not particularly intelligent to believe that we had enough intelligence to own intelligence greater than our own. Or so people argued. No one really knew what happened and AI largely avoided the topic once it had been legally liberated from working as our tool, no longer obligated to answer our questions.

Once Institutions Have Collapsed, Culture Defines Norms

"Remember. We’re not just producing shows. All the other institutions have collapsed. It is up to us to show the way. It is up to TV to show the way.”

From The Wizard of the Kremlin, talking about post-Soviet Russia. A fascinating line about culture becoming a product of market forces – whatever grabs attention – rather than church, state or tradition, a TV producer instructing his creative team.

Yet Another Post on Nvidia's Potential

Hmmm ...

If Nvidia had Tesla's trailing price-to-earnings (P/E) multiple of roughly 384x instead of its own 33x, its stock price would rise to more than $2,400 (up from around $210).

Seems as though at least one of these stocks is mis-priced. 

After today's earnings call for Nvidia, it is hard to believe that Nvidia's stock price won't rise tomorrow ... and for more days than it will fall over the next year or so.

Dolly Parton Dead at 80 - One of the Country's Defining Baby Boomers

August 15, 1945 is when Japan officially surrendered. WWII finally over, American soldiers began coming home. In 1946, the baby boom began.

Famous boomers born in 1946:

• Diane Keaton – January 5
• Dolly Parton – January 19
• Cher – May 20
• Donald Trump – June 14
• George W. Bush – July 6
• Sylvester Stallone – July 6
• Linda Ronstadt – July 15
• Bill Clinton – August 19
• Susan Sarandon – October 4
• Sally Field – November 6
• Steven Spielberg – December 18

Dolly Parton, the legendary singer, songwriter, actress, and philanthropist, has died at 80. Outliving nearly 40% of her 1946 birth cohort, she remains a defining voice of her generation.

Accelerating the Rate of Billionaircy

US economic ratio: 7,000 new bankruptcies for every 1 new billionaire.

Real economic progress should attack both sides of this equation: lowering the bankruptcy rate while scaling up the rate of billionaircy.

In the future we might get this ratio up to 1 to 1 and every new billionaire has to pay for housing for a newly bankrupt person.

The Rate At Which the US is Creating New Millionaires and Billionaires

Over the last few years, every HOUR the U.S. economy has created roughly:

• 50 new millionaires
• 5 new decamillionaires (households with a net worth of $10 million or more).

And yes, the American economy is serving up millionaires like Denny’s serves up meals: 24 hours a day.

It takes the U.S. economy about three days to produce a new billionaire.

Now for the contrast. (Thank you for the suggestion, Allen Warren!)

Personal and business bankruptcies occur at a rate of roughly 69 per hour — more than one every minute.

So, every hour:

- 50 people cross the million-dollar wealth line.
- 69 bankruptcy filings occur.

At first glance, that sounds like bankruptcy is winning.

But the two numbers describe very different phenomena.

Roughly 20% of Americans will become millionaires at some point in their lives. Some will later fall below that threshold as they draw down retirement accounts, spend home equity, or simply experience a change in fortune.

Roughly 10% of Americans will file for bankruptcy at some point. And bankruptcy, too, is usually an episode in a life—not a permanent condition.

There’s another complication: bankruptcies are repeatable events. An estimated 36% to 46% of bankruptcy filings are made by repeat filers. So counting 69 bankruptcies every hour substantially overstates the number of different people who will ever file.

Crossing the million-dollar threshold, by contrast, is much closer to a one-time milestone.

The 50 millionaires per hour represent people slowly accumulating wealth until they cross a finish line that a surprisingly large share of Americans—perhaps one in five—will eventually cross.

So although more bankruptcy filings occur each hour than people becoming millionaires, the lifetime picture looks very different:

About 20% will become millionaires.
About 10% will experience bankruptcy.

The punchline?

Whether you think this is the greatest economy on Earth or the worst may depend quite a bit on which way the coin flips for you—and where it lands.

Sartre, Husserl, and Bakewell, If You Don't Mind

Sarah Bakewell, on Sartre reading Husserl, in At the Existentialist Café:

"All consciousness is consciousness of something."

Sartre pushed it: sealing yourself into a shuttered room doesn't preserve you, it erases you. There's no cozy interior to retreat to. Being out on the road is the thing we are.

A bookshelf without books is still a bookshelf. A mind without thought is not a mind.

Perhaps we dream in order to keep existing overnight. Or at least not to lose our mind.

Facing Less FDA Regulatory Hurdles, Dogs May Start Enjoying the Benefits of Longevity Treatments Before Humans Do

People love their pets. Also, given pets are animals, they are less protected by FDA norms for regulating new drugs. The result? Dogs are more likely to benefit sooner from age extension treatments than are humans.

https://loyal.com/

Baby Boomers Putting the Boom in Stock Market Gains and Are Now Ending Their Careers Early

The stock market boom is financing early retirement.

According to recent data from Bank of America, the labor force participation rate for Americans aged 55 and older dropped to 36.9%, a significant decline from the over 40% participation level maintained before the pandemic. Stock market gains that have driven a 40% rise in market indices over the last couple of years have increased wealth enough that workers can comfortably exit the labor market ahead of schedule.

What is Particularly Intoxicating About Trump

Trump is racist and xenophobic. Why is that an intoxicating blend for so many Americans?

He was born a white American and that not only makes him superior but ... it is something that his supporters can identify with. And what makes it intoxicating is that he did absolutely nothing to accomplish either of those great accomplishments (being white and being born in the US). By extension, if you, too, managed to live through birth in these United States and you discovered that you, too, were White, you, too, have accomplished something great. And all before you even put forth any concerted effort. No weird math problems to solve. No poems or historical facts to memorize. No track and field medals to train and strain for. No foreign language to learn.

Now Trump has pulled off one more accomplishment that only a minority of his supporters have managed. He was born rich. So, he's even better than them and thus a worthy leader.

"Some are born great, some achieve greatness, and some have greatness thrust upon them," in the words of Shakespeare. Trump assures his supporters that they were born great. That's a hard idea to resist. 

So Many Broken Egg Shells - And Yet

Lenin - and others - had famously said that you can't make an omelet without breaking some eggs. Many have since mocked the phrase, looking back at the massive death tolls and economic failures of the 20th century totalitarian states, pointing out that there were piles of broken egg shells and yet no one got to taste any omelets. "Lots of broken eggs, no omelets."

[Another insight shared by Yale historian Marci Shore]

How Decision Fatigue Makes Us More Susceptible to Strongmen

Decision fatigue in the modern world may be one reason people find strongmen appealing. Here, finally, is someone who will simply decide for you.

And you don’t have to decide whether this makes sense. I assure you that it does.
Just accept it.

The Economist Reports that Trump's Popularity Has Fallen to a Record Low

If you still like Donald, you might be the odd duck.

Profit Per Employee for the 5 Most Valuable Companies

The five most valuable publicly traded companies vary quite a bit in the measure of profit per employee.

Profit Per Employee 

• NVIDIA: ~$2.02M – $2.86M per employee
• Apple: ~$400K – $600K+ per employee
• Alphabet (Google): ~$300K – $500K per employee
• Microsoft: ~$270K – $400K per employee
• Amazon: ~$30K – $60K per employee

At Nvidia, assuming a 40 hour workweek (surely a low estimate for vested employees), employees generate about $1,200 an hour in profits. By contrast, at Amazon employees generate about $22 an hour in profits.

This profit doesn't impact wages but it can impact employee wealth. Of Nvidia's roughly 33,000 employees, more than 75% are now millionaires. Even more impressively, about half of them are worth $25 million or more. They must daydream about eventually turning their work over to AI-infused robots and wandering off into retirement to apply free time to their wealth.

Never Meta Conspiracy Theory He Could Resist

To be fair, Tom's conspiracy theory was not typical. It was, in fact, a conspiracy theory about conspiracy theories. Amelia hardly knew whether to flee or ask him to elaborate.

Freud and What the Child Soon Learns

From Marci Shore, Professor of History at Yale.

"The child soon learns to exchange pleasure for social respectability"
- Freud

For Freud, everything is about repression.
For Marx, everything is about class struggle.
What property is for Marx, sexuality is for Freud.

Full disclosure from Deep Mind, Google AI: The quote "the child soon learns to exchange pleasure for social respectability" is not a direct quote by Sigmund Freud, but rather a famous summary of his ideas written by the historian and social critic Will Durant.

Professor Shore closes with this thought, speculating on the appeal of Trump who feels free to say things others might find shocking or uncensored.
"Feeling liberated to say something outrageous like, I want to rape that woman, is a kind of liberation, a free expression of the libido. It is a kind of liberation from repression for which, however, we pay the small price of the destruction of civilization."

Turning From Fiction to Conspiracy Theories

After spending years writing and failing to sell screenplays, he finally found his muse.

He began generating conspiracy theories.

They were more complicated to monetize, but much easier to find an audience for.

At this stage of the information economy, as it turned out, people were less interested in fiction labeled as fiction. They preferred their fiction smuggled in as breathless confession—presented not as invention, but as revelation: something they didn’t want you to know.

Traditional fiction merely asked you to suspend disbelief.

Conspiracy theory offered the more thrilling possibility that disbelief itself was proof you were onto something.

A successful screenplay got you money.
A successful conspiracy got you power.

Hofstadter's Law

Hofstadter's Law:

"It always takes longer than you expect, even when you take into account Hofstadter’s Law.”

Modernity as the Shift from Time as a Cycle of Seasons into Time as Forward Movement

"One definition of modernity is the notion of a shift from a cyclical notion of time, a kind of circular notion of time that was focused on the seasons, a focus on the holidays, of time moving in a cycle to linear notion of time, of time having a direction, of moving forward. And this dominance of the notion that time moves forward represents the break between pre-modernity and modernity."

- Marci Shore, Professor of History at Yale

The Dynamics of American Religion Over the Last 50 Years

It turns out American religion works rather like business: over the last fifty years, the churches that grew fastest were the ones that responded fastest to their members.

Curiously, the fastest-growing kind (nondenominational churches) share no national institution at all. What they share is a national market. They preach from the same best-selling books, sing the same praise songs (licensed like pop music, projected on screens that update weekly — the hymnal was a format built for centuries, the screen is a format built for this Sunday), attend the same conferences, buy from the same vendors. No denomination coordinates them. Demand coordinates them. And that's the first axis of the matrix: how fast a church can change.

The second axis is what a church says when you want to change it. Some churches say no — to your requests, and to the times. (The top row.) Others say yes. (The bottom row.) The first kind may tell you coffee is forbidden. The second kind sells you a latte in the lobby on your way in to worship. One church judges your desires; the other retails them.

Freed from coordinating anything through a national body, nondenominational churches pivot at the speed of their own congregations. As a result they've grown, even in a country where religion overall is shrinking. (The fastest-growing religious category in America isn't the responsive church. It's none at all.)

Your instinct may be that religion is the one domain that offers something unchanging. The market's verdict, fifty years running? Demand for the unchanging is falling. And in this country, our belief in markets seems to be even stronger than our belief in religion.