Time Perspective, Deficits & Dementia

When the average person graduates from high school, they’ve already used up 93% of the total in-person time they’ll ever spend with their parents. They’re already in the tail end.

The same often goes for old friends. In high school or college, you hang around the same group of friends about five days a week. In four years, you probably rack up 700 group hangouts. Now, scattered around the country with totally different lives and schedules, you’re probably in the same room at the same time only 10 days each decade. The typical person leaving college is already in the last 7% of the time they’ll ever spend with their friends.

What do you do with this information? There are three main takeaways:

1) Living in the same place as the people you love matters. You probably have 10 times the time left with the people who live in your city as you do with the people who live somewhere else.

2) Priorities matter. Your remaining face time with any person depends largely on where that person falls on your list of life priorities. Make sure this list is set by you—not by unconscious inertia.

3) Quality time matters. If you’re in your last 10% of time with someone you love, keep that fact in the front of your mind when you’re with them and treat that time as what it actually is: precious.

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U.S. corporate profits and stock market valuations are at historic highs, but the kind of real, productive investment that’s supposed to create those profits (building factories, equipment, infrastructure, etc.) has been falling for decades. Why have U.S. corporate profits and equity valuations reached historic highs despite a concurrent secular decline in net domestic investment?

In the mid-20th century, profits came from companies investing money to build things, sell more, and earn returns. Today, profits keep climbing even though companies aren’t really investing more in the real economy. So where are the profits coming from?

Federal budget deficits are the source. The government is essentially borrowing money and pumping it into the economy through programs like Social Security and Medicare, and that money flows almost dollar-for-dollar into corporate profits — which then get recycled into the stock market, inflating share prices.

Net Corporate Profits = Net Domestic Investment + Government Deficit − Household Saving − Foreign Saving.

This is just bookkeeping — it has to be true by definition. A government deficit is negative saving. When the government spends more than it takes in through taxes, it stimulates income and profits.

Here’s how it works in plain terms:

The Treasury issues bonds and uses the money to send entitlement checks (Social Security, Medicare, etc.) to households
Those households (mostly middle and lower-income, who spend nearly everything they get) go out and buy goods and services
That spending shows up as revenue at corporations
Because the spending didn’t require companies to spend more on production, most of it drops straight to the bottom line as profit

The wealthy people who originally bought the Treasury bonds basically just swapped cash for a Treasury bond — they didn’t lose anything. But the Treasury’s spending stimulates real consumption, which becomes corporate profit.

There’s a nearly one-for-one long-run relationship between fiscal deficits and corporate profits. In other words, every additional dollar of deficit roughly translates into a dollar of corporate profit over time. However, if you just look at quarterly correlations between deficits and profits, you’ll see a negative relationship — that’s because during recessions, profits collapse and deficits spike at the same time. But that’s a short-term cyclical effect that masks the long-term structural relationship.

The “natural experiment” occurred when the U.S. government briefly ran brief budget surpluses in the late 1990’s, withdrawing net spending from the economy. During this period of declining deficits and brief surpluses, corporate profits fell too. But with the recession in 2001, fiscal deficits returned and profits immediately resumed their upward climb.

What Happens Then?

Once corporations have these excess profits, what do they do with them? Here’s where the second half of the financialization story kicks in.

In a healthy economy, companies would reinvest profits into expanding production. But for decades, the returns on real investment haven’t been attractive enough to justify it (due to global competition, especially from China, weak domestic demand, etc.). So instead, firms returned profits to shareholders through dividends and buybacks.

Those distributions go mostly to wealthy households — and wealthy households don’t spend most of that money on goods and services. They reinvest it in financial markets, often through passive index funds. Mandated to remain fully invested, these funds then recycle the inflows to purchase stocks in proportion to their market capitalization indifferent to valuation, thus bidding up prices without any change in fundamentals.

In other words, an index fund doesn’t ask “is this stock cheap or expensive?” — it just buys mechanically. So when more money flows in, prices get pushed up regardless of underlying fundamentals. Research shows that each $1 of inflow increases market value by roughly $5 — meaning passive flows have an outsized impact on valuations.

How Did We Get Here?

1. The collapse of national saving. In the 1950s and 1960s, net domestic investment, funded entirely by national saving, averaged 11% of GDP. But then structural fiscal deficits started to offset private saving, and national saving has now collapsed to nearly zero.

2. The long decline in interest rates. Two big forces pushed rates down: China joining the WTO in 2001 (which created huge trade surpluses that flowed back into U.S. Treasuries) and the post-2008 era of zero interest rate policy and quantitative easing. Cheap borrowing costs let the government run big deficits without “crowding out” private investment.

3. The shift from tangible to intangible investment. Gross domestic investment ebbs and flows with the business cycle, but its longer-term average has held relatively steady, only slipping from about 23% of GDP during the 1950s to 1980s to about 21% in recent decades. Net domestic investment has declined from nearly 11% of GDP in the mid-twentieth century to about 5% in recent years. Over the same period, depreciation rose from roughly 12% of GDP to more than 16%.

The reason: today’s “capital” is software, data, servers, and R&D — which depreciates and goes obsolete much faster than the factories, machines, and infrastructure of 50 years ago. So companies have to spend more just to replace worn-out capital, leaving less for genuine expansion.

4. The financialization of profits. As deficits soared from near zero in the 1960s to 8% of GDP by the 2020s, the profit share grew in parallel, from 6% of GDP to more than 10%. Over this same time, national saving collapsed from 11% of GDP to near zero.

5. Growing inequality as a consequence. Because the profit share of GDP grew, the labor share necessarily shrank. Even as social transfers soared by 10% as a percentage of GDP, the labor share of national income entered a prolonged decline, falling from near 68% in the early 1980s to 62% by the mid 2020s. And because the rising profits accrue mostly to wealthy households, who don’t spend much in the real economy, this further fuels the cycle of recycling profits into financial assets.

There are competing theories for why corporate profits have grown so much — the “superstar firm” hypothesis (industry consolidation gives dominant firms pricing power), globalization (cheap foreign labor crushed wages), and the rise of high-margin tech companies with intangible-heavy business models.

While part of the equation, these factors operate within the larger macroeconomic environment established by fiscal and monetary policy. In other words: those theories explain which companies win, but the deficit story explains why the total pie of corporate profits has grown so much faster than the underlying economy.

What This Means Moving Forward:

The foundation supporting U.S. corporate profits and equity valuations has weakened, leaving the market increasingly fragile. Profits now depend on large-scale fiscal deficits, a sharp departure from the mid-century model when profits were generated by private investment of retained earnings.

Today’s stock valuations rest on continued (and growing) fiscal deficits. If at some point the U.S. is forced — by the bond market, by political will, or by a debt crisis — to reduce deficit spending, the entire mechanism that’s been propping up profits and stock prices could go into reverse.

Reversion to a healthier macroeconomic environment of declining deficit spending and greater net investment may cause sharp declines in both corporate profits and valuation multiples and likely trigger a financial crisis with politically toxic consequences. Ironically, the more palatable option may be to remain on the current path until a financial crisis imposes on us the discipline that we are unwilling to impose on ourselves.

Either path leads to a painful adjustment; it’s just a question of whether it’s by choice or by crisis.

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One of most exciting longevity trends right now is the decline in dementia. At a given age—70, 75, 80, etc.—the prevalence of dementia is down compared to what it was decades ago. Today’s 90-year-olds have less than half the risk of dementia that ones in 1984 did.

Memories, Cash Flow & The Happiness Crash

Your hippocampus doesn’t encode days that feel identical. If this Tuesday looks like last Tuesday, your brain files them as a single compressed memory. The second day never gets its own folder.

This is why decades feel like they disappeared. The hippocampus uses novelty as its filter for “worth storing.” Repetitive routines trigger temporal compression. Same commute, same desk, same dinner, same bedtime: the brain deduplicates the whole sequence into one entry. You lived 365 days. You filed 40.

As people move through continuous experience, the hippocampus and medial prefrontal cortex fire in discrete bursts at moments the brain flags as “something changed.” Each burst becomes a retrievable memory later. In stretches with no boundaries, the bursts flatten. Participants with more boundaries in a given period remembered more of it afterward. Segmentation literally builds memory.

Sleep is the second mechanism. During slow-wave sleep, the hippocampus replays the day’s episodes and transfers them to the neocortex for long-term storage. This is when memory actually gets filed. Cut sleep short and encoding efficiency drops. Chronic sleep debt means experiences you had never complete the transfer. The memory existed. It just never made it to disk.

The third mechanism is where dopamine meets attention. Novel stimuli trigger the ventral tegmental area to release dopamine into the hippocampus, which gates what gets encoded. Mind-wandering does the opposite. When your default mode network takes over (phone scrolling, rumination, email during dinner), the hippocampus stops tagging the present. You were at the wedding. Your hippocampus was in your inbox.

The fix comes straight out of the mechanism. New locations, new food, new people, new routes home. The brain needs boundaries to build memories. Go to bed earlier so replay actually runs. Put the phone down when something is happening so the dopamine signal can fire.

The more forgettable the day, the shorter the decade.

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Traditional valuation metrics like the Shiller CAPE (price-to-earnings) ratio have been screaming “overvalued” for most of this century, but there has been almost no mean reversion since 2008 for U.S. stocks:

Why?

When you swap earnings for free cash flow (sales minus input costs, labor, taxes, and capex — basically what’s actually available to pay owners), the picture changes dramatically. Until recently, the price-to-free-cash-flow ratio bounced around but had no long-term upward drift:

Two structural shifts explain the divergence:

Labor share has declined ~8 percentage points of GDP since 1980. Less of the pie goes to workers, more goes to firm owners. This boosted earnings.
Capex has been relatively weak as a share of firm value. Firms (especially big tech) generated massive earnings without heavy reinvestment, so cash flow grew even faster than earnings.

However, that clean free-cash-flow story is under pressure right now. Some of these companies have gone from huge positive FCF to zero or negative FCF, taking on debt to fund it. Big tech has flipped from cash-generating machines to massive spenders on AI data centers, chips, and energy infrastructure.

The chart below is the same as above, but extends the data adding the last few years:

Bullish case: This is 1-2 years of heavy investment that will produce a new plateau of even higher cash flows, and AI further reduces labor share.

Bearish case: AI isn’t “free money” — even adopter firms (not just the hyperscalers) will need serious capex to implement it, and the payoff is uncertain.

Full podcast discussion on this topic on an episode of Odd Lots this week.

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There was a sudden, sharp and historically unprecedented decline in self-reported happiness in the US population. It occurred during 2020, the year of the Covid pandemic, and mainly persists through 2024.

This happiness crash spread across nearly all typical demographics and geographies. The happiest groups pre-Covid (e.g., whites, high income, well-educated and politically/ideologically right-leaning) tend to show the largest happiness reductions.

The glaring exception is marital status, which has consistently been an important marker for happiness. The already wide happiness premium for marriage has, if anything, become slightly wider. With both married and unmarried reporting large declines in happiness the country has become segregated: slightly over half-the married adults-remain happy on balance; the unmarried, nearly half, are now distinctly unhappy.

Status, Procrastination & Hair Transplants

Your brain is running status calculations all the time — looking for who is capitulating to whom, who commands attention, who has the nicest stuff, who seems confident, who people want to be around, etc, etc. This is un-installable software in your brain.

Every time you feel a pang of envy scrolling through someone’s engagement photos, every time you adjust how you describe your job depending on who’s asking, every time you feel a flush of pride when someone important remembers your name — that’s the program running. You can intellectually reject status games all you want — your brain is unconsciously still playing them.

The important thing is that status is completely relative. It’s not calculated against some universal benchmark. It’s calculated against whoever else is in the room. A surgeon has high status in a hospital but not necessarily at a skate park. Which is why status is so deeply entangled with money. Money is the most legible, most portable status signal we have. Every financial decision you make is shaped, consciously or not, by where you think you stand relative to the people around you.

There are two fundamentally different kinds of status. The first is the respect and admiration you get from people who actually know you — your friends, your coworkers, your community. Your standing on the local ladder. It’s earned through relationships, rooted in a specific place and a specific group of people. And it’s the kind that actually predicts whether you’re happy. When your local standing goes up, your well-being goes up. When it drops, it drops. The effect is stronger than income, education, or job. Having money only really feels good insofar as it makes the people around you respect you more.

The second is what most people mean when they say “status” — wealth, income, job title, clothes, etc. The stuff people can more readily see (and quantify). It’s much easier to compare your salary to someone else than it is to determine if you’re a better partner/friend/daughter.

This kind of status barely moves the needle when it comes to happiness. People adapt to new income levels almost immediately (hello, hedonic adaptation). You get the raise, you feel good for a month, your reference group shifts, and you need more.

The pursuit of status has less to do with material comfort than with love — that what we’re really chasing when we chase rank is the assurance that we matter to someone. That we won’t be abandoned. That we’re worthy of attention and care. Which makes the whole status economy feel even crueler, because the version of status our current system sells — the one made of metrics and money and things that scale digitally — is the one least likely to deliver the thing we actually want.

The whole system runs on a kind of collective amnesia about what actually matters. We build the metrics. We optimize for the metrics. We forget why we built the metrics. We assume the metrics are the thing instead of a proxy for the thing. And then we wonder why we feel empty.

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There’s one piece of advice I’m confident applies to basically everyone: you should make sure your psychological center of gravity your real and immediate world – the world of your family and friends and neighborhood, your work and your creative projects, as opposed to the world of presidencies and governments, social forces and global emergencies.

This will make you happier. It will make you more meaningfully productive.

Keeping your center of gravity immediate and local means treating the world of national and international events as a place that you visit – to campaign or persuade, donate or volunteer, to do whatever you feel is demanded of you – and that you then return from, in order to gain perspective, and to spend time doing some of the other things a meaningful life is about.

One very good way to tell that your center of gravity is out of whack is when it feels like you spend a lot of time inside the minds of far-off strangers. To follow the news isn’t merely to follow the activities of Elon Musk, but to feel overly familiar with his twitchy and emotionally reactive inner life as well. This isn’t healthy.

We need a certain psychological distance, some cognitive privacy. There’s some appropriate level of such privacy between me and my wife, for goodness’s sake, so you’d better believe there’s one between me and Musk.

Returning your center of gravity to your immediate world means remembering that “the way you want the world to be” is something you can live, here and now, not just something for which you advocate or argue. Your immediate world isn’t only somewhere you come to recharge, before heading back to the arena. It is the arena.

I’ve found one tried-and-tested mindfulness exercise to be helpful here. Become consciously aware of your feet – of their position in space and their temperature, their contact with your footwear or the ground. Come out of your head for a moment, and especially out of other people’s heads. Here you are. Here. On the ground.

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A two-minute trick to outsmarting procrastination, from a new book titled How A Little Becomes A Lot:

Choose something you’ve been putting off and commit to doing it for exactly two minutes. Set a timer: When it goes off, you can stop – no guilt, no pushing through. You’re not changing your life overnight – you’re just proving that beginning doesn’t have to be overwhelming.

The limits of our willpower and the importance of structuring our environment to help us accomplish what we want. To change our behavior, we need to change out surroundings. Instead of saying “I’m going to refrain from eating Fig Newtons today,” it’s better to put the Fig Newtons on the top shelf behind a box of rice crackers.

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The men who can afford it are shelling out up to $20,000 to get hair transplants, which have become harder to detect and ever more precise.

Men with more modest means can find packages that fly them to Turkey and deliver the same procedure for around $3,000 — or they can start with the cheapest option of all, which is going on finasteride. Prescriptions for the drug in the United States tripled between 2017 and 2024, a time when telehealth companies were taking off, just as men started spending hours a day staring at their hairlines on Zoom.

Feeding that anxiety is a mass-marketing campaign teaching men the same brutal self-scrutiny that women have long been trained to perform. A typical male in his 20s or 30s is likely to receive a flood of ads and shout-outs on Instagram, TikTok, YouTube and the livestreaming platform Twitch for hair-growth products that appeal to men their age.

Young men who have come of age in the time of the manosphere are prime audiences for endless reels from influencers — some of them exceptionally buff, some of them funny, some of them with millions of followers, who are trying various treatments in the hope of regaining a full head of hair. The hair-loss influencer Zeph Sanders has over one million TikTok followers tracking his “hair journey.” The ubiquity of this kind of content makes losing one’s hair no longer seem inevitable; going bald can now feel like a choice — a conscious decision.

The advertising and those influencers are conveying the message to young men that they should start taking finasteride young; in their early 20s. The approach fits into the broader “prejuvenation” trend, in which young men and women are using lasers, fillers and products like Botox to fend off signs of aging before they start, rather than doing damage control when degradation is already well underway.

Parents come in asking about finasteride for their teenage sons, looking to make sure they get “all the best they can have in order to succeed in life.” Young men are also coming in on their own for help keeping their hair. There’s no new epidemic of hair loss, but there is an epidemic of men freaking out about it.

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Here’s a number that should change how you think about retirement: 12.

That’s how long the average healthy 60-year-old has before their mobility, energy, and independence start to significantly decline. Not before they die… before life gets noticeably harder. You have more time than you have energy. More years than you have vitality. And if you don’t understand that distinction, you’ll waste the good years preparing for the declining ones.

The cruel irony is that most people spend the first decade of retirement living as they did in the last decade of work—carefully. You saved for 40 years. You delayed gratification. You were prudent, responsible, cautious. And that got you here. It built the nest egg. It secured your future. But if you keep living that way, you’ll waste the very years you saved for.

Your 60s are not a rehearsal for your 80s. They’re the main event. And if you don’t spend (not recklessly, but intentionally) during the years when you can still fully enjoy it, you’ll reach 78 with a big bank balance and a long list of regrets.

If you’re reading this in your 60s, you’re in the window. You still have your good years ahead of you. You haven’t missed it. But the window is finite, and it’s closing.

If you’re in your 50s, you have even more time, but you also have a chance to shift how you think about retirement before you get there. To plan not just financially, but experientially. To design a retirement that front-loads the living, not the saving.

Removing Burden, Parent Goals & Happiness

The British-born Zen master Houn Jiyu-Kennett said her teaching style wasn’t to lighten the burden of the student, but to make it so heavy that he or she would put it down. I had a full-body reaction the first time I encountered that. To me, the phrase meant this: you can slog through life trying to ‘get on top of things’, trying to reach the point at which you feel like you know what you’re doing, trying to fix your flaws, or make yourself emotionally invulnerable… All of that is an attempt to ‘lighten the burden’, and there are a thousand self-help gurus on standby, promising to aid you in the effort.

But making the burden heavier? That means seeing that as a finite human you’ll never get on top of everything, never fully understand what makes others tick, never immunize yourself from distress. The burden of reaching that goal is an impossibly heavy one. And so you put it down. You let your shoulders drop and your muscles unclench. And then – crucially – you’re free to actually be here, actually do stuff, actually show up. You get to climb life’s mountains without lugging a huge rucksack full of steel ingots on your back the whole way, which is both easier and much more fun.

The spiritual writer Michael Singer points out: reality doesn’t need you to help operate it. It gets along just fine without your worrying.

Who knew? I don’t think of myself as an obscenely self-centered narcissist, yet I have to admit that when I heard those words, I suddenly perceived the subtle sense in which my thoughts and actions – and especially the background muscular tension I instinctively bring to them – were indeed somehow premised on the notion that reality itself would be badly affected were I to relax my guard.

I seem to imagine that my worrying is effective – that there’s something about the very act of fretting about the future that helps keep everything on track. This is, rather obviously, false. All I really need to do is to show up for what’s happening, appreciate the spectacle of it, and go with the flow.

Life is not a problem to be solved. Or else that life is nothing but a never-ending stream of problems to be solved, which in fact amounts to the same thing. Grasping this is both an enormous relief and tremendously energizing – because now you get to pour your finite time and energy into something infinitely more absorbing than trying to keep life under control, which is actually living it.

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I had a conversation with a guy a few months ago whose immigrant parents came to America and worked tirelessly in low-wage jobs to make ends meet. Those kids are now adults, and this guy felt a sense of shame that as a college-educated white-collar worker he would not have to suffer the same way his parents did for him. His parents instilled in him the lessons of frugality and grit. Would his own children learn the same from him if they watched their father live a comparatively easy life?

He gave an example: when he was a kid, all books were borrowed from the library. Now his young daughter demands (and gets) to purchase $15 Taylor Swift books that pile up in her room.

My response was that if we talked to his immigrant parents, I would bet they would say: that was the goal. To put it differently: The goal of some parents is to work so hard that their kids and grandkids get to live a life that appears spoiled by the standards of previous generations.

What’s common to miss here is that when one generation’s life becomes comparatively easier than before, their life does not become objectively easy; they just move on to worrying about higher-order problems that were previously deemed not urgent enough to worry about.

I hope my kids and grandkids won’t have to worry about cancer in the ways we do. I hope they have incredible technology that makes their jobs easier than ours. I hope that everyday frictions we deal with today disappear. I hope their energy is so abundant they consider it unlimited.

Is that spoiled? I suppose, but when you frame it like that you might think of a different word – perhaps “lucky,” or, “fortunate.” Or perhaps, “beneficiaries of the accumulated hard work of those who came before them in a way that leaves them able to spend their days solving new problems.” Which is what you and I are today.

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Mark Manson reviewed over 2,600 studies to rank 19 of the most common self-improvement techniques based on their effectiveness. He sorted them into four tiers: (1) legitimately works, (2) works sometimes, (3) probably not helping, and (4) straight up bullshit. Here were the results:

TIER 4: STRAIGHT UP BULLSHIT (AND MAY ACTUALLY HURT YOU):

19. Suppressing Negative Thoughts — The “ironic process” means trying not to think about something makes you think about it more. It can work for very smart people in very short-term, high-pressure moments, but the rebound effect makes things worse over time for everyone.

18. Microdosing Psychedelics — No consistent measurable benefit beyond mood improvement (i.e., you’re just getting a little high). Studies show a decline in cognitive function and executive reasoning, and long-term microdosing may carry adverse health effects from chronic exposure to psychoactive compounds.

17. Intuitive Decision-Making (“Trust Your Gut”) — Your gut doesn’t make better decisions; it just makes you feel better about your decisions. The exception is domain experts with decades of pattern-matching experience, but for most life choices, it’s self-serving and often detached from reality.

16. Catharsis / Venting Anger — Screaming into a pillow or punching a wall doesn’t release anger — it trains you to indulge it. The small effect sizes that exist are negative, meaning it makes you angrier more often.

TIER 3: PROBABLY NOT HELPING

15. Crystal Healing — Pure placebo effect. If you believe it works, you might get a small something, but there’s essentially zero evidence of any mechanism. Mostly it just harms your bank account.

14. Willpower / Ego Depletion — The concept of willpower as a finite tank you drain throughout the day is highly contested and probably not real. Believing you have limited willpower tends to make you underperform, and productivity problems are usually emotional problems in disguise.

13. Power Posing — Any mood boost is extremely transient, and the early hormonal claims (testosterone increases) have been debunked. It’s essentially a tiny placebo triggered by becoming momentarily aware of your posture.

12. Learning Styles (Visual/Auditory/Kinesthetic) — Over 90% of U.S. teachers still believe in this, but research consistently shows no real effect. The benefit people report is simply from having a choice in how they learn, not from matching a “style.”

11. Positive Affirmations — A “win more” strategy: people who already feel good get a small boost, but people with low self-esteem often feel worse because it highlights the gap between the affirmation and their actual beliefs.

10. Morning Routines — Extremely personality-dependent and mostly a placebo driven by a sense of control. Forcing a routine that mismatches your chronotype or becoming rigidly dependent on it can actually backfire.

TIER 2: WORKS SOMETIMES (MAYBE/DEPENDS):

9. Positive Visualization — Works well for physical/athletic performance and when paired with concrete planning. Without a plan, it’s just daydreaming — and pure outcome-based visualization actually decreases motivation.

8. Energy Healing — Surprisingly landed in the top half with a medium effect size (0.53), though only 56% of studies found any effect. The benefit likely comes from human touch, the ritual, and a strong placebo/expectancy effect rather than anything metaphysical.

7. Cold Water Immersion (for Mental Health) — Fairly consistent mood and stress benefits, likely driven by a big dopamine release. However, it’s a “win more” strategy — helpful if you’re already mentally healthy, potentially destabilizing if you’re fragile.

6. Speed Reading — You can realistically go from ~200 to 300–400 words per minute, which is meaningful, but the 1,000 wpm promises are nonsense. The trade-off is reduced retention, and much of reading speed turns out to be genetic.

TIER 1: LEGITIMATELY WORKS

5. Gratitude Interventions — The most consistent finding in the entire list: 98% of 166 studies showed a positive effect. The effect size is small, though, and compared to other positive interventions like acts of kindness, the unique “gratitude mechanism” mostly disappears.

4. Meditation — Consistently effective for stress and anxiety reduction, roughly equivalent to SSRIs for depression in some studies. The deeper benefit is knowing your own mind better, though compared to other active positive interventions, the unique advantage narrows.

3. Eat the Frog (Hardest Task First) — 95% of the benefit comes from the prioritization process itself, not the timing. Figuring out what matters most creates clarity and reduces anxiety, and ending the day on easier tasks boosts self-efficacy.

2. Bibliotherapy (Reading Self-Help Books) — 93% of 188 studies found positive effects, with a decent effect size approaching some therapy modalities. The key is the right book at the right time, and structured recommendations from a therapist boost the hit rate significantly.

1.Behavioral Activation (“Do Something”) — The most robust finding across all 19 techniques. Simply taking action, even small action, generates motivation rather than waiting for motivation to strike. It’s on par with CBT for depression and costs nothing.

Full Discussion Here: Self Help, Solved

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From the World Happiness Report (2026 was just released). The country rankings below are based on three-year averages, so the 2023 result captures responses from 2021, 2022 and 2023.

Q2 2026 Global Stock Market Valuations By Country

A higher price to earnings ratio (CAPE) means a country’s stock market is more expensive. A lower number is less expensive.

United States Stock Market: 36
Average of Foreign Developed Stock Markets: 22
Average of Foreign Emerging Stock Markets: 18

The rankings below show the price you are paying for the earnings, dividends, cash flow and book value for the companies within these countries.

*Abbreviations:

CAPE: Cyclically Adjusted Price Earnings – a valuation measure that uses real earnings per share (EPS) over a 10-year period to smooth out fluctuations in corporate profits that occur over different periods of a business cycle.

CAPD: Cyclically Adjusted Price Dividends – a valuation measure that uses dividends over a 10-year period to smooth out fluctuations in corporate profits that occur over different periods of a business cycle.

CAPCF: Cyclically Adjusted Price Cash Flow – a valuation measure that uses cash flow over a 10-year period to smooth out fluctuations in corporate profits that occur over different periods of a business cycle.

CAPB: Cyclically Adjusted Price Book – a valuation measure that uses book value over a 10-year period to smooth out fluctuations in corporate profits that occur over different periods of a business cycle.

Source: The Idea Farm

Brain Hemispheres, Meaning & The Placebo Effect

We are living at a time of profound unhappiness.

But here’s the really weird part: The ones suffering most are not just the down-and-out types—the addicts, the impoverished, the failsons. Those for whom there are obvious things gone wrong in their lives. On the contrary, it is also those who seem to have everything going right for them—in other words, our young and most successful strivers.

I’ve spent my life surrounded by that very group. As a longtime college professor, I have been privileged to teach hundreds of wonderful students—ambitious strivers just starting out on what promised to be terrific careers and lives. I have met countless young people who were so inspired by ideas, so purpose-driven, and so enthusiastic.

But in 2009, I left academia to run a nonprofit in Washington, D.C. And when I returned to campus a decade later, the atmosphere was dark. Larger and larger percentages of students were suffering from depression and anxiety. At some schools, more than half of students were receiving mental health treatment. My office hours were more like counseling sessions than tutoring. Hope and optimism had been replaced by anger and sadness.

Most of the younger generation is online a lot: scrolling social media, watching videos. To simulate a social life, they spend hours listening to podcasts of other people having interesting conversations. You could call it “social pornography.” Most of the time, there’s nothing better to do. They crave a big, meaningful project and immersing themselves in it. But they can’t come up with any ideas for what that project might be . . . so it’s back online.

They don’t fit the traditional résumé of unhappy people. They’re not addicted to drugs, nor struggling financially. In fact, their life looks enviable from the outside. But like so many young people I’ve spoken to over the years, they feel empty.

What these young strivers describe to me is something akin to waiting in an airport terminal for a delayed flight that never leaves. They try to stay occupied to keep themselves from going mad, always in the hope that boarding will finally be called and the flight will take off. And their distraction tactics—which invariably involve technology—keep them from thinking too much but make their sense of emptiness worse.

One of the young strivers I talked to was telling me about his virtual job, dating apps, social media friends, and video gaming. Then, out of the blue, he said something fundamental.

“I feel like I’m living in a simulation.”

Others said the same thing. Life felt unreal: full of false rewards, empty accomplishments, therapeutic talk, and fake experiences, all curated to pass the time as painlessly as possible.

Again and again, people said that life was busy but not meaningful. That experiences and relationships felt meaningless. Or that they didn’t know what they were meant to do in work and life. And it’s worse for the strivers than anyone else: The richer, more technologically advanced the country, the greater the percentage of the population that answers “no” to the question “Do you feel your life has an important purpose or meaning?”

Here’s why: Strivers are great at solving technical problems and answering specific, hard questions. They have been educated and trained to believe that, while the world is incredibly complicated, with enough knowledge and hard work, every problem can be solved.

The truth is, many big, complicated problems can be solved with sheer intellectual horsepower. But meaning is not one of them. “What is the meaning of my life?” is a question that cannot be answered like “How do I build an app for finding concert tickets?” or “How do I create an effective six-month weight-loss program?” Meaning is a question that must be lived, not solved with a Google search or simulated using artificial intelligence. It requires deep contemplation and a commitment to living a real life, full of unsolvable secrets, puzzling riddles, unexplainable bliss, and terrible suffering.

But in all their technical excellence, strivers trivialize their humanness by reducing life’s magnificent inscrutability to a series of complicated but solvable problems. They aren’t just living in a simulation; they are also creating the simulation they are living in.

In his 2009 book, The Master and His Emissary: The Divided Brain and the Making of the Western World, Ian McGilchrist argued our brains have two hemispheres that deal with everything, but they do so in consistently different ways. The right side of the brain is the “master,” which asks big, transcendent questions such as “Why am I alive?” The left side—which he calls the “emissary”—addresses such practical questions as “How do I get food so I can keep being alive?”

In other words, in the right hemisphere we ask the lofty why questions about life. On the left side, we ask, earthbound, what to do now and how to do it.

Hemispheric lateralization explains the acute crisis of meaning today. In our increasingly complicated, technology-dominated, and endlessly distracting world, people are shoved to the left side of their brains. They are stuck in a complicated simulation where there is a lot going on, but which is bereft of mystery and meaning.

Older people remember the before times, when meeting a potential mate for the first time involved a real-life conversation, and a big question of life’s meaning couldn’t be reduced to a Google search. But most young adults today have never known any domain other than Left Brain Land. And this is especially true for the strivers. They know every complicated nook and cranny of that technical dystopia, but the mysterious realm of meaning seems mythical, like the lost kingdom of Atlantis.

Stuck outside the realm of the numinous right hemisphere, life becomes just an endless loop of complicated left-brain routines and habits—a simulation of a life that is deep, mysterious, and authentic. It’s frustrating and empty.

Worse: It’s boring. And humans absolutely despise boredom.

Why are we so bored? Because life feels repetitive and meaningless, and even a minute here or there with nothing to do feels like an hour. So out comes the phone, every few minutes, all day long, changing our brain chemistry in dangerous ways.

And what side of our brains are we on as we do all this? The mundane left, of course, not the mysterious right. The remedy we’ve created to avoid the boredom of modern life—this app, that video—reinforces our inability to ponder the abstractions necessary to formulate any concept of our lives’ meaning.

This asymmetry explains why we’re bombarded with ingenious solutions to age-old problems but never seem to make progress toward greater happiness. In fact, it’s the reverse: We are losing our sense of life’s meaning faster and faster.

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The famous origin story of Think and Grow Rich, by Napoleon Hill, is that Andrew Carnegie commissioned Hill in 1908 to interview 500 successful people over 20 years.

That origin story is fabrication.

In reality, in 1908 Hill was fleeing police in Alabama under a fake name after committing fraud, facing domestic violence accusations, and abandoning his family. The book’s real author was his wife. She took Hill’s rambling, failed manuscripts and refined them into Think and Grow Rich.

The book contains a mix of genuinely good advice:

Specific goal-setting with deadlines
Persistence and grit
The “mastermind” concept of surrounding yourself with sharp people
The value of specialized knowledge

It also contains psuedoscienctific nonsense like:

“Sex transmutation” or redirecting sexual energy toward business
The idea that brains communicate through vibrations
A “sixth sense” chapter about receiving messages from infinite intelligence

If Think & Grow Rich is a fabrication from a con man, how has it sold over 100 million copies and helped millions of people since it was published?

The answer lies in the placebo effect.

Most of the advice from self-help gurus works not because it’s scientifically accurate, but because believing in it changes people’s behavior, which then changes their outcomes. Believing they can accomplish something makes them more likely to try it and then more likely to try hard and persist.

Is his book Useful, Not True, Derek Sivers says most things are hard to know for certain, so you might as well believe whatever is most helpful for you and others. The criticism that self-help is pseudoscience misses the point. Due to the placebo effect, even if something is not scientifically true, it can be useful for many people.

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Key findings from chapter 3 of the 2026 World Happiness Report: Social media is harming adolescents at a scale large enough to cause changes at the population level:

Is social media use reasonably safe for children and adolescents? We call this the “product safety question”, and we present seven lines of evidence showing that the answer is no.

The evidence of harm is found in: 1) surveys of young people; 2) surveys of parents, teachers, and clinicians; 3) contents from corporate documents; 4) findings from cross-sectional studies; 5) findings from longitudinal studies; 6) findings from social media reduction experiments; and 7) findings from natural experiments.

We show there is now overwhelming evidence of severe and widespread direct harms (such as sextortion and cyberbullying), and compelling evidence of troubling indirect harms (such as depression and anxiety). Furthermore, we show that the harms and risks to individual users are so diverse and vast in scope that they justify the view that social media is causing harm at a population level.

We further argue that when these lines of evidence are considered alongside the timing, scope, and cross-national trends in adolescent wellbeing and mental health, they can help answer a second question: was the rapid adoption of always-available social media by adolescents in the early 2010s a substantial contributor to the population-level increases in mental illness that emerged by the mid 2010s in many Western nations? We call this the “historical trends question”. We draw on our findings about the vast scale of harm uncovered while answering the product safety question to argue that the answer to the historical trends question is “yes”.

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The graph below shows the percentage of each country’s total stock market cap made up by its top 10 largest stocks. While people worry about the concentration of the largest stocks in the U.S., it is a global phenomenon.

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Is this finally the moment when the jaws begin to close and U.S. value stocks (red line) outperform growth (blue line)?

Private Equity, Mushrooms & Pawn Shops

Life insurance companies manage huge pools of money. When you buy a life insurance policy or annuity, they take your premiums and invest them so they can pay you (or your family) decades later. These are long-term promises, so it really matters that the money is managed safely.

Unlike banks, which are regulated by powerful federal agencies, insurance companies are regulated state by state. Each state has its own rules and a much smaller budget. Some states (like Vermont) offer very lenient rules to attract business. The result is that insurers can shop around for the weakest oversight — and state regulators are simply outgunned compared to the companies they’re supposed to watch.

Insurance companies used to be boring and conservative. But in recent years, big private equity (PE) firms have bought up many of them. The PE firm is like a slaughterhouse that now owns the sausage factory. Instead of stuffing the sausage with quality meat (safe, plain bonds), they’re tempted to dump in their own leftover scraps (risky, hard-to-sell private credit deals) — because they control both sides of the transaction.

The PE firm originates risky loans, then has its own insurance company buy those loans. The PE firm collects fees and gets a guaranteed buyer for its products. But if those investments go bad, it’s not the PE firm that loses — it’s the insurance policyholders whose money was backing those investments.

The Hidden Risks:

Maturity Mismatch: Insurers are using shorter-term money to fund long-term, hard-to-sell investments. That works until people want their money back all at once.
Captive Reinsurance: Insurers are shuffling liabilities to affiliated shell companies (sometimes offshore) that don’t actually have enough real capital behind them. This makes the insurer look healthier on paper than it really is.

The economy and credit markets have been strong. When times are good, risky bets don’t look risky. But cracks are forming — defaults are rising, and some funds have already started blocking investors from withdrawing money.

The nightmare scenario is that if a recession hits, those risky private credit investments start defaulting, investors rush for the exits, and the illiquid assets have to be sold at fire-sale prices. The people left holding the bag would be ordinary insurance policyholders.

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Why daylight saving time is worse for your body than standard time: An animated story explaining how spring and fall time changes affect your body.

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A new “magic mushroom” drug could treat depression without psychedelic hallucinations: Scientists are exploring a new way to harness the medical promise of psychedelic compounds without the mind-bending side effects.

Researchers created modified versions of psilocin — the active form of psilocybin from “magic mushrooms” — that still target key serotonin pathways linked to depression and other brain disorders but appear to cause far fewer psychedelic-like effects.

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When pawn shops outperform financials, history shows the broader market environment tends to be messy. They have broken above their all-time high and are making new decade highs relative to financials.

Reality Filtered On Beliefs, ATMs & Environment

We don’t see reality clearly. We all think we perceive reality as it is. And the truth is, that’s just not the case. The brain can’t see reality as it is; it predicts reality. Right now, your brain is absorbing 11 million bits of information—the light entering your eyes, the sound of my voice, the ambient temperature of the room.

That’s the equivalent of reading War and Peace every second, twice. However, your conscious attention can only process 50 bits. That’s one sentence per second. You are only consciously aware of 0.000045% of reality entering your brain.

How does the brain make sense of all this? It predicts reality. We all live in a simulation inside our own minds. Our reality is filtered based on our beliefs. Study after study shows how people can observe the exact same event and see something completely different.

If you’re on a diet, you see food as larger. If you’re afraid of heights, you see distances as further. Watch a football game: the ref makes a call, and fans of one team see it as absolutely correct, fans of the other team see it as ridiculous. Think about geopolitics: people committed to the belief that one side is right see every event through that lens. We do not see reality clearly. We do not see people clearly. We see others as we believe they are.

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People often cite that the invention of the ATM did not reduce bank teller employment, which actually increased steadily until the late 2000s. But they miss the second half of the story, which is that another technology did – the iPhone.

Labor substitution is about comparative advantage, not absolute advantage: the relevant question for labor impacts is not whether AI can do the tasks that humans can do, but rather whether the aggregate output of humans working with AI is inferior to what AI can produce alone.

Given the vast number of frictions and bottlenecks that exist in any human domain—domains that are, after all, defined around human labor in all its warts and eccentricities, with workflows designed around humans in mind—we should expect to see a serious gap between the incredible power of the technology and its impacts on economic life.

That gap will probably close faster than previous gaps did: AI is not “like” electricity or the steam engine; an AI system is literally a machine that can think and do things itself. But the gap exists, and will exist even as the technology continues to amaze us with what it can now accomplish.

The true force of a technology is felt not with the substitution of tasks, but the invention of new paradigms. When a technology automates some of what a human does within an existing paradigm, even the vast majority of what a human does within it, it’s quite rare for it to actually get rid of the human, because the definition of the paradigm around human-shaped roles creates all sorts of bottlenecks and frictions that demand human involvement.

It’s only when we see the construction of entirely new paradigms that the full power of a technology can be realized. The ATM machine substituted tasks; but the iPhone made them irrelevant.

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Everyone is panicking about the death of reading. This narrative has a seductive simplicity. Screens are destroying civilization. Children can no longer think. We are witnessing the twilight of the literate mind.

I spend my working life in a university library, watching how people actually engage with information. What I observe doesn’t match this narrative. Not because the problems aren’t real, but because the diagnosis is wrong.

Consider a simple observation. The same person who cannot get through a novel can watch a three-hour video essay on the decline of the Ottoman Empire. The same teenager who supposedly lacks attention span can maintain game focus for hours while parsing a complex narrative across multiple story lines, coordinating with teammates, adapting strategy in real time. That’s not inferior cognition. It’s different cognition. And the difference isn’t the screen. It’s the environment.

Peer-reviewed research demonstrates that social media platforms exploit variable reward schedules, the same psychological mechanisms that make gambling addictive. Users don’t know what they’ll find when they open an app; they might see hundreds of likes or nothing at all. This unpredictability acts as a powerful reinforcement signal (often discussed via dopamine ‘reward prediction error’ mechanisms), keeping people checking habitually. This isn’t because screens are inherently attention-destroying. It’s because the dominant platforms have been deliberately engineered to fragment attention in service of advertising revenue.

We have been here before. Not just once, but repeatedly, in a pattern so consistent it reveals something essential about how cultural elites respond to changes in how knowledge moves through society.

Ancient Greece – Socrates worried that writing itself would produce forgetfulness
1533 – Thomas More denounced Protestant texts as deadly poisons threatening to infect readers.
17th–18th Centuries – People considered literacy spread to the general population as corrupting
Late 18th/Early 19th Century – Novel-reading was treated as an existential threat
Mid-To-Late Victorian Era – Penny Dreadfuls were condemned as morally corrupting
20th Century – Comic books, radio, and television

I used to believe, as I was taught, that literacy was primarily about decoding text. But watching how people actually learn and think has convinced me that literacy is about something deeper: the capacity to construct and navigate environments where understanding becomes possible.

Consider those who flourish with audio books but struggle with printed text. For years, educators told them they had learning disabilities, by which they meant: disabilities that prevented learning through the one true method we recognize. But they don’t have learning disabilities. The instruction has a disability – it can’t accommodate different neurological architectures. Give them the same text as audio, and suddenly the ‘disability’ vanishes.

The pattern I observe repeatedly: people who ‘can’t focus’ on traditional texts can maintain extraordinary concentration when working across modes.

We haven’t become post-literate. We’ve become post-monomodal. Text hasn’t disappeared; it’s been joined by a symphony of other channels. Your brain now routinely performs feats that would have seemed impossible to your grandparents. You parse information simultaneously across text, image, sound and motion. You navigate conversations that jump between platforms and formats. You synthesize understanding from fragments scattered across a dozen different sources.

The real problem isn’t mode but habitat. We don’t struggle with video versus books. We struggle with feeds versus focus. One happens in an ecosystem designed for contemplation, the other in a casino designed for endless pull-to-refresh.

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A.I. should allow medical schools to rethink whether 4 years is still necessary. If students can focus more on clinical practice and less on memorizing the Krebs cycle and molecular bio, many programs could eliminate a year, reducing both costs and physician shortages.

Drexel joins roughly 20% of med schools with or are developing 3-year programs for certain specialties, like family and internal medicine and pediatrics. The accelerated path can make these historically hard-to-staff specialties more appealing to students.

Nobody Knows Anything & CT Scan Pills

“Nobody knows anything,” the author and screenwriter William Goldman once wrote of the movie business. Goldman was talking about Hollywood’s famous inability to predict future hits. Surrounded by false confidence, Goldman counseled humility.

Today his motto applies forcefully to the discourse around artificial intelligence. I am lucky to have participated in conversations about the future of AI with executives and builders at frontier labs, economists at AI conferences, AI investors, and other bigwigs at off-the-record dinners where important truths can theoretically be bandied about without risk. And if I had to pick three words to summarize this collective expert view of the future, I could not in a million years, or with a trillion tokens, find three words more suitable than these: Nobody knows anything.

I do not mean that AI architects are stupid. I do not mean that their speculation is absurd or worthless. I certainly do not mean that they don’t have access to narrow truths, such as rising adoption of AI in general and autonomous “agents,” in particular. What I mean is that the frontier labs don’t really know what they’re building exactly, and economists don’t know how to model the thing that they claim they’re building. As a result, nobody really knows what is going to happen with AI this year, or next year, or the year after. There is no secret cigar-filled room of elites who have unique access to some authentic postcard from the future. When you drill down underneath the bluster, the boosterism, the fear, and the anxiety, what’s present at the bottom of it all is a genuine uncertainty, a vacuum into which storytelling is flooding.

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One day soon, a doctor might prescribe a pill that doesn’t just deliver medicine but also reports back on what it finds inside you—and then takes actions based on its findings.

Instead of scheduling an endoscopy or CT scan, you’d swallow an electronic capsule smaller than a multivitamin. As it travels through your digestive system, it could check tissue health, look for cancerous changes, and send data to your doctor. It could even release drugs exactly where they’re needed or snip a tiny biopsy sample before passing harmlessly out of your body.

This dream of a do-it-all pill is driving a surge of research into ingestible electronics: smart capsules designed to monitor and even treat disease from inside the gastrointestinal (GI) tract. The stakes are high. GI diseases affect tens of millions of people worldwide, including such ailments as inflammatory bowel disease, celiac disease, and small intestinal bacterial overgrowth. Diagnosis often involves a frustrating maze of blood tests, imaging, and invasive endoscopy. Treatments, meanwhile, can bring serious side effects because drugs affect the whole body, not just the troubled gut.

If capsules could handle much of that work—streamlining diagnosis, delivering targeted therapies, and sparing patients repeated invasive procedures—they could transform care. Over the past 20 years, researchers have built a growing tool kit of ingestible devices, some already in clinical use. These capsule-shaped devices typically contain sensors, circuitry, a power source, and sometimes a communication module, all enclosed in a biocompatible shell. But the next leap forward is still in development: autonomous capsules that can both sense and act, releasing a drug or taking a tissue sample.

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86% of babies born in 2026 will be born in Asia or Africa:

Aliveness, Discretionary Time & Strike Zones

There is an anxious, stomach-clenching feeling that the world is changing very fast, and that you’ll need to struggle very hard to keep up. The furious scramble to a place of psychological safety, to avoid being condemned to disaster and cast into the void………….

You don’t, actually, have to live like that. It won’t make you happier. It probably won’t even aid your career.

It’s worth briefly noting that of course there’s a mundane sense in which keeping up with changing times is a good idea. If you work in a job you’d like to retain, it’s wise to keep your skills fresh. If you see ways that a software tool might genuinely enhance what you do, you’d be foolish to refuse on principle to experiment with it. But that’s not the existential desperation I’m talking about here – that feeling of needing to claw your way to safety, so as not to tumble backwards into the abyss. Instead, you’re just making the sober judgment that, because a certain outcome matters to you, it makes sense to do certain things to try to obtain it.

The stomach-clench of anxiety isn’t anything like that. Rather, it emerges from the feeling that reality poses a fundamental threat to your security, so that hypervigilance and constant effort will be required to forestall annihilation. It implies that it’ll be very difficult indeed to make it to safety (with the corollary that if you fail, it’ll be because you didn’t try hard enough).

But this is one of those cases where the agony arises, in a sense, not from getting things out of proportion, but from not taking them far enough. Because for finite humans, it’s not “very difficult” to reach a place of safety from the onrush of events. It’s impossible. The moment of invulnerability never arrives. Even if you were to find a way to feel like a winner, technology-wise, by 2027, there’d be 2028 to worry about. Even if you felt completely secure in your career, there’d be your health, and the health of those you love, to worry about. And even if you and your family were the healthiest people alive, you might get hit by a bus tomorrow. Uncertainty is our basic state of existence, not something to be got through to the certainty beyond.

The reason “you’re not ready for what’s coming next”, in other words, is that we’re never ready for what’s coming next.

I’m not suggesting that when you grasp this insight you’ll immediately cease worrying about the future and be free of anxiety forever. (That hasn’t been my experience.) But it can free you up sufficiently to notice a different way of approaching life: not by anxiously bracing against impending doom, but by taking a deep breath and settling down a bit into the basic uncertainty of it all. And then, in that tremulous and vulnerable state, to navigate from one day to the next by choosing, from the paths available to you, whatever seems to lead in the direction of more aliveness.

There’s no reason this can’t involve immersing yourself in all manner of digital tools. But you’ll be relegating them to their proper role as tools, useful in some contexts and too limited to be useful in others, as opposed to gods you must appease, regardless of the cost to your experience of life.

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“Discretionary Hours” refers to time beyond sleep, meals, and hygiene. They are available for work, leisure, and other activities. “Work Hours” includes paid work, travel time to and from work, and household chores. The balance between work and leisure has shifted over time, particularly in the 20th century, due to factors like technological advancements and increased productivity

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A bit of positive news. In the past 12 months, we’ve seen:

the largest decline in US murder rate ever recorded
huge declines in traffic fatalities and drug overdoses
a surprising (and largely unreported) decline in teen anxiety and despair, coinciding with ongoing declines in suicide
continued advances in GLP-1 medicines that seem to reduce obesity, inflammation, cardiovascular disease, and other illnesses that are currently under study

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Baseball umpires have improved dramatically. The heat maps below show the evolution of the MLB strike zone from 2007 to 2025. The zone has changed dramatically, going from vibes to nearly matching the rule book definition perfectly.

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The truth about millionaires in America:

-Half have less than $2 million in net worth (and less than $340,000 in liquid assets)
-Most are NOT business owners
-Almost all are house/401k rich but cash poor

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About 90% of all outstanding bonds in the world yield lower than 5%:

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The falling number of public companies/stocks available to buy is a global phenomenon:

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After the Global Financial Crisis (GFC), the P/E ratio for US stocks was similar to that of the rest of the world, but the surge in tech valuations has now pushed the US P/E ratio 40% higher:

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What software companies are in more danger vs. more safe from the relentless A.I. disruption:

🔴 High danger — “Search layer” companies: Companies whose main value is making publicly available data easier to search through a fancy interface. This includes financial data terminals built on licensed exchange data, legal research platforms built on public court records, and patent search tools. Many have already lost 40–60% of their value.

🟡 Medium danger — “Mixed portfolio” companies: Companies that have some proprietary assets but also rely on repackaging public information. The key question is: what percentage of their revenue comes from things AI can’t replace? (Think S&P Global — their credit ratings are safe, but their data analytics tools are exposed.)

🟢 Safer companies have one or more of these shields:

They own data nobody else can get — Bloomberg’s real-time trading desk data, S&P’s credit ratings, Dun & Bradstreet’s business credit files. AI actually makes this more valuable since every AI agent needs it.
They’re protected by regulations — Epic (hospital software) is shielded by HIPAA rules and FDA certifications. AI doesn’t change those requirements.
They’re embedded in money flows — If your software processes payments or settles trades (like Stripe), AI sits on top of you, not instead of you.
They have network effects — Bloomberg’s chat system works because everyone on Wall Street is on it. AI doesn’t change that.