Edward Quince's Wisdom Bites: Keeping With Year End Traditions

 "The true test of civilization is not the census, not the size of the cities, nor the crops - no, but the kind of man the country turns out."

                            - Emerson 

Edward Quince's Wisdom Bites: Keeping With Year End Traditions

 "There are two things to aim at in life: first, to get what you want; and after that, to enjoy it. Only the wisest of mankind achieve the second."

                        - Logan Parsall Smith 

Feel free to go back to December 2023 https://edwardquince.blogspot.com/2023/12/  

and December 2024 for more https://edwardquince.blogspot.com/2024/12/

Edward Quince's Wisdom Bites: The one about the six foot man

(Expanded from April 9, 2025)

In April, volatility reminded us of Howard Marks’ most memorable metaphor: the six-foot man who drowned crossing a stream five feet deep on average.

The Danger of Averages

You don’t live on averages. You live through drawdowns.

Leverage narrows the range of survivable outcomes. You can be right long-term and still be ruined on a bad Tuesday.

The Financial Takeaway

Survival is the only road to riches.

Leverage doesn’t add value—it magnifies outcomes. Build a margin of safety large enough to withstand bad luck, not just bad analysis.

Assume the stream has deep holes. Invest like someone who wants to stay in the game.

Fortune favors the unlevered—or at least the perpetually cautious.

Edward Quince's Wisdom Bites: The one where doing nothing is the hardest work

 (Expanded from January 13, 2025)

We opened 2025 with Nick Sleep and Qais Zakaria’s Nomad Investment Partnership—proof that inactivity, when disciplined, can be wildly profitable.

Strategic Inertia

Nomad understood something markets hate: time is the only exponential variable in compounding.

Their solution was radical restraint. Minimal trading. Minimal reporting. No performative busyness. They avoided the “say-something syndrome,” recognizing that frequent updates create the illusion of progress while sabotaging patience.

Scale Economies Shared

They backed businesses like Costco and Amazon that shared scale economies with customers—lower prices, higher loyalty, wider moats. Growth came not from squeezing margins, but from widening trust.

The Financial Takeaway

Your edge isn’t brilliance. It’s boredom tolerance.

If news won’t matter in five years, don’t give it five minutes. The hardest work in investing is often resisting the urge to appear active.

As Munger said: it’s the waiting that makes the money. Most people can’t stand the quiet.

Edward Quince's Wisdom Bites: The One About The Pope

(Expanded from May 12, 2025)

Somewhere between earnings season and FOMC minutes, we found ourselves reading papal encyclicals.

Stay with me.

Capitalism Without Virtue

In Rerum Novarum and Centesimus Annus, Popes Leo XIII and John Paul II offered a critique more incisive than most hedge fund letters: capitalism without virtue becomes a thinly disguised totalitarianism.

This is not theology—it’s systems analysis.

When labor is treated purely as a cost, not a vocation, fragility follows. When work becomes “Work for Work’s Sake,” dignity erodes. When profit becomes the only regulator, fraud eventually sneaks in through the side door.

The Financial Takeaway

Markets are powerful servants and terrible gods.

A company that grinds its workforce down may boost margins briefly, but it is eating its seed corn. Social liabilities compound just as surely as financial ones.

True wealth includes autonomy, meaning, and peace. If your returns rely on moral bankruptcy, you’re borrowing performance from the future—and the interest rate is punitive.

Edward Quince's Wisdom Bites: The one with the falcon and the donut

(Expanded from May 5, 2025)

In May, we wandered briefly away from charts and into something far more revealing: a CEO driving his own product.

Lyft CEO David Risher introduced two concepts worth their weight in free cash flow: Falcon Mode and Enshittification.

The Donut Dilemma

While driving for Lyft, Risher picked up a rider named Anne. Her commute decision depended entirely on price. At $20, she’d go in. At $40, she’d stay home. That day the fare was $30—barely tolerable.

She paid it only because she had donuts in the backseat for her team.

A spreadsheet would log this as a successful transaction. Reality logs it as resentment.

Fighting Gravity

This is enshittification in action—the slow degradation of a product in the blind pursuit of profit. Cory Doctorow’s framework is simple: first platforms serve users, then they exploit them, and eventually they extract everything they can from everyone involved.

It’s not malicious. It’s gravitational.

The cause is additive bias—solving problems by adding layers instead of removing friction. Metrics improve while experience decays.

The Financial Takeaway

Falcon Mode is the antidote: operate at altitude, but retain the ability to swoop.

Dashboards tell you what happened. They rarely tell you why.

For investors, beware of businesses that grow by extracting rather than creating value. If the model depends on customer irritation and employee exhaustion, it is not compounding—it is consuming.

Quality is felt before it is measured. If you wouldn’t ride the product, don’t own the stock.

 

Edward Quince's Wisdom Bites: The One With The Bird Poop

(Expanded from February 7, 2025)

Welcome back to the digital saloon, where we trade fleeting forecasts for the only currency that matters: reality.

In February, we stumbled into one of my favorite investing parables—one involving cosmology, Bell Labs, and a rather unglamorous pile of pigeon droppings.

The Noise That Wasn’t

In the mid-1960s, astronomers Arno Penzias and Robert Wilson were attempting to eliminate a persistent hiss in their radio antenna. They tried everything—checking wiring, changing orientation, even scraping away what they delicately described as “white dielectric material.” (Translation: bird poop.)

They assumed the noise was an error. A nuisance. Something to be cleaned.

It wasn’t.

The hiss turned out to be the cosmic microwave background radiation—the afterglow of the Big Bang itself. In trying to remove “noise,” they discovered the origin story of the universe.

There is a lesson here for investors, and it’s not subtle.

The Illusion of Control

Markets are not moved by neat models; they are shaped by outliers, accidents, and events that never made it into your spreadsheet.

The human brain despises uncertainty. Robert Greene calls the “need for certainty” the greatest disease of the mind. It pushes us to mistake confidence for competence and precision for truth.

This is why strategists still publish year-end S&P targets with decimal points, as if the market were a Swiss watch instead of a drunk octopus.

If you relied solely on forecasts to understand markets, you’d have been confused for roughly a century.

Embracing the “I Don’t Know”

The most honest answer to “what will the market do next?” remains: I don’t know.

Rather than predicting rain, build the ark.

Intellectual humility is not weakness—it is structural strength. What you dismiss as noise today may be the signal that defines tomorrow. As Eisenhower reminded us: plans are useless, but planning is indispensable—because the crisis is always the thing you didn’t plan for.

Sometimes the universe speaks softly. Sometimes it sounds like static. Sometimes it looks like bird poop.

Ignore it at your peril.

Edward Quince's Wisdom Bites: The Atlas We Carry

 Cloud Atlas is a time-looping ledger of human cause and consequence: every exploitation returns as its own invoice.

Capitalism’s glory is compounding—but compounding applies to moral choices too:

• exploitation compounds fragility
  
  

• integrity compounds trust
  
  

• patience compounds possibility
  
  

• purpose compounds permanence
  
  

Speculation—Mitchell’s “bonanza instinct”—is the infantile belief that wealth should arrive without wisdom.

A humanistic capitalist rejects that.
Purpose is a long-duration asset.
Trust is a dividend stream.
Dignity is intrinsic value.

Mitchell’s warning isn’t anti-market—it is pro-human market:
capitalism not as a predatory adulthood, but as a mature guardianship.

The Financial Takeaway:
Never interrupt compounding—of capital or character.
The future is not built by quarterly maximizers but by stewards of endurance.

Profit without purpose is noise.
Profit with purpose is music.