Bear, Bull, and Minotaur - How Little We Understand Markets

One of the many things that makes the stock market fascinating is that the exact same facts can reasonably support reasoning behind, say, P/E of 19 or 39 ... depending on a variety of other forces at play, some as curious as "mood."

Clothing and music go in and out of fashion and so, in a sense, do stocks or particular sectors of stocks or even the stock market itself.

If stock price were purely a function of variation in sales and profits there would be variability enough. But then you add to that animal spirits and the variability varies even more. The amount by which variability varies varies over time depending on various factors.

There are bull markets (stocks are up!) and bear markets (stocks are down!) and even that can be misleading.

"Is that a bull or a bear," asks the investor.
"Oh, Clive. That looks like a minotaur. No bull here, friend. You may have been taken in by a mythological creature."
"Mythological?"
"Well, not completely. The minotaur has built this maze of gains and losses that you're now navigating. The stock market is a labyrinth and you never quite know which way it'll turn next or whether you'll ever find your way out."

Attention and Institutional Design

Anxiety-and-boredom institutions versus skill-meets-challenge institutions is precisely the difference between attention strip-mined and attention cultivated.

The Rapid Emergence of National AIs

The president of South Korea was recently in San Francisco and shook hands with Nvidia's Jensen Huang over an agreement to develop a large language model for South Korea, something they are simply calling Korea AI.

[photo from The Korea Herald https://www.koreaherald.com/article/10819850 ]

This is a fascinating development that you may have missed.

250 years ago, hundreds of governments were creating constitutions. This was a new kind of technology that answered the question, If we are not our sovereign's country - if we are not simply Catherine the Great - Queen of Russia's - domain but are instead a nation that is defined as something that transcends a monarch - what are we? A constitution is an attempt to answer that question.

And of course constitutions evolve over time - most clearly with amendments but more subtly with hundreds of court rulings, laws, and emergent norms. But Korea AI represents something new: an emergent tool that has the capacity to synthesize polls, precedents, budgets, scientific and research discoveries, the evolution of culture and so much more into something we might call Korean.
This is not unique to Korea. How many countries are engaged in creating their own national AI?

If the bar is "formal national commitment to AI sovereignty," the figure is startling: at the AI for Developing Countries Forum in Bangkok in February 2026, delegates from over 100 countries adopted a declaration to pursue AI sovereignty — control over AI data, computing resources, and the models operating within their borders — explicitly so that models reflect each nation's "languages, cultures, and values." If the bar is "actually building or funding a national model," the realistic count is somewhere in the range of 30 to 40 countries with concrete programs, and it's now a budget line in most of the G20 — a stated strategic priority of essentially every government with the fiscal capacity to fund one.

Korea's announcement, in other words, isn't an outlier — it's one of the last major economies to formalize what has become, in about thirty months, a near-universal ambition.

In a sense, this is an attempt to formalize a national culture: its mix of capabilities and knowledge and its values and goals.
An American AI suggests the possibility of synthesizing culture into laws and budgets. The cultural debates about what we mean by British or German or even European give way to an elaborate scorecard that has the potential to synthesize debates from talk shows, public opinion, research from universities and - of course - legislation debated and passed into laws and budgets. The emergent property of a nation can become intellectual engine to an American AI or Colombian AI.

Among the many questions this raises is simply this: is this more or less democratic? A consciousness that emerges out of the various sometimes harmonious sometimes clashing impulses, thoughts and goals in the same way that a sense of self emerges out of target weight and the allure of chocolate, goals and priorities expressed versus goals and priorities lived, etc. Is this sense of Korea AI or America AI something transcendent of the old media and legislature or does it represent something too opaque to qualify as democratic?

This Blog Author's Philosophy in a Sentence

Progress is the transformation of “there is only so much” into “there is so much”- by enabling people, ideas, and institutions to combine in ways that create possibilities none could create alone.

Elon Musk's Cultural Dissonance Regarding Religion and AI - His Interview with the Economist

The Economist's Editor-in-Chief Zanny Minton Beddoes interviewed the world's richest man. So much could be said about it, but I'll limit myself to one observation about its beginning and its end.

At the start, Elon Musk calmly acknowledges that AI could mean an apocalyptic future for mankind — but says he's fairly confident the more probable outcome is that AI and robotics deliver unprecedented, widespread prosperity. Risk acknowledged, reward embraced.

At the end, he's defending his prediction that Britain — a place he admits he hasn't visited in years — is headed for civil war because it lets in people from other cultures, primarily Muslims, whose beliefs will create a rupture. Risk acknowledged, reward forgotten.

Notice the accounting. For his own disruptive creation, Musk holds danger and promise in the same hand and bets on promise. For the disruption of unfamiliar beliefs, he can no longer find the promise at all.

Which is odd, because the promise is the modern world's founding wager. The First Amendment may be the most brilliant social invention in history. (Yes, that's the US, not Britain — but Musk claims it as his creed; free speech absolutism was his stated reason for buying Twitter.) Put simply, it commits a nation to welcoming ideas that others find offensive — on the bet that the collision of beliefs produces more progress than protection from them ever could.

Musk is clear-eyed that welcoming AI means welcoming an intelligence that may reject us, oppose us, or synthesize with our own to create unprecedented progress. He seems unable to see that welcoming foreign religions, philosophies, and perspectives is the same wager — one that may applaud us, boo us, or synthesize with our own beliefs to create unprecedented progress. It's a wager the West has been winning for centuries.

In this sense, AI isn't a break from history. It's the newest entrant in a long series of disruptive arrivals — democracy, thousands of religions including atheism, philosophies, lifestyles, ideas — that collided to create the modern world.

The modern world is nothing if not a belief in the benefit of welcoming — of making ourselves vulnerable to — what is foreign, new, and possibly disruptive. The entanglement of risk and reward is something intrinsic to progress. 

https://www.economist.com/insider/the-insider/an-interview-with-elon-musk

Elon Drops from 4X Wealthier Than Second Richest Person to Just 3X

As of 24 July 2026 ... Elon Musk has lost as much as the second richest man in the world and still has roughly $750 billion.
He's dropped from more than one trillion dollars in net worth to $725 billion. Larry Page - cofounder of Google / Alphabet and second richest man in the world - is now worth $262 billion. Per Forbes.

data:
https://www.forbes.com/real-time-billionaires/#38ff1823d788

Nvidia vs. Tesla - A Striking Contrast Between Two Stocks

This is a stunning contrast between a meme stock that remains disconnected from underlying reality and one of the most remarkable companies of this century that is positioned in a way that investors don't quite yet believe. One a stock that credulous investors are buying at a premium and another that skeptical investors are hesitant to buy at an remarkably reasonable price.

Tesla:
Margin Deterioration: Operating margin plummeted to 1.4% from 4.1%.
Valuation Disconnect: Trailing P/E sits at an extreme 345x multiplier.
Capital Strain: Free cash flow reversed into a $1.09 billion burn.
Market Headwinds: Facing intense EV price wars and autonomous competition.

Nvidia:
Profit Powerhouse: Operating margins actually exceed 65%.
Cheaper Valuation: Forward P/E is highly reasonable at 22.7x.
Insatiable Demand: Customers are immediately purchasing all available AI chips.

Just focus on the margins alone.
Tesla profit margins of 1.4%.
Nvidia profit margins of 65%.

Irrational exuberance contrasted with rational skepticism.

*******

And the morning after I posted this on 22 July, Tesla is down more than 13%, its P/E ratio closer to 300.

And to be fair, Nvidia stock price is down 2.5% this morning as well. 

Fainting Spells

She seems entirely too perky. 

How do you suggest that we slow her down?

Do you know any good fainting spells?

You Think

It is not just that you think differently from other people. You think differently from everyone. And as if that is not enough, you think differently WITH each person.

Think about that.

Band Evolution

They started out as a punk band but then the guitarist learned 3 new chords so now they're a pop rock band. If he does that two more times, though, they'll have to bill themselves as prog rock.

(I know. I know. Maybe only 4 people will get this and only two of them who will find it entertaining. Kind of like the audience for a prog rock band.)

Donald Trump Paid $6 Million in Damages Today to E. Jean Carroll

Somehow this fact and the fact that Trump is the only president in the 250 years of this country to have never beat another man in the general election seem related.

Per Mother Jones, if only women had voted in the 2016 election, Hillary Clinton would have won 45 states (plus Washington, D.C.) for a total of 458 electoral votes. If only men had voted, Donald Trump would have won 35 states for a total of 350 electoral votes.

You American voting boys. You really need to up your game.

AI Representation

Lindsay Graham dead.
Mitch McConnell brain dead.

Makes you wonder how long before districts will be perpetually represented by the AI avatar of a politician who once was an actual human. Like Disney's Hall of Presidents but avatars actually sitting in congress.

The Limit of Institutional Imagination

What invention is to products and technology, entrepreneurship is to institutions. 

One of the limits to an entrepreneurial economy will be our institutional imagination. By definition, institutions can do what no individual can. This suggests that the imagination of an individual is not enough. We need something that - like the capability of institutions - emerges out of the interaction of individuals rather than is a story told by or curated by some charismatic leader.