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Hi, I'm Jim O'Shaughnessy and welcome to Infinite Loops.
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Sometimes we get caught up in what feel like infinite loops when trying to figure things out.
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Markets go up and down, research is presented and then refuted, and we find ourselves right back where we started.
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The goal of this podcast is to learn how we can reset our thinking on issues that hopefully leaves us with a better understanding as to why we think the way we think and how we might be able to change that to avoid going in infinite loops of thought.
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We hope to offer our listeners a fresh perspective on a variety of issues and look at them through a multifaceted lens — including history, philosophy, art, science, linguistics, and yes, also through quantitative analysis.
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And through these discussions help you not only become a better investor, but also become a more nuanced thinker.
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With each episode we hope to bring you along with us as we learn together.
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Thanks for joining us, now please enjoy this episode of Infinite Loops.
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Disclaimer: Jim O'Shaughnessy is chairman and Co-Chief Investment Officer of O'Shaughnessy Asset Management, where Jamie Catherwood is an associate.
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All opinions expressed by Jim, Jamie and podcast guests are solely their own opinions and do not reflect the opinions of O'Shaughnessy Asset Management.
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This podcast is for informational purposes only, and should not be relied upon as a basis for investment decisions.
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Clients of O'Shaughnessy Asset Management may maintain positions in the securities discussed in this podcast.
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Jim O'Shaughnessy: Well hello everyone, it's Jim O'Shaughnessy with another episode of Infinite Loops, and I am delighted to have what used to be my recurring guest until he disappeared for like three months.
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But he disappeared for a very good reason.
1:56
He is a new daddy to another daughter who's three months old now. Congratulations, Alex. Alex Danco: Hey, Jim.
2:06
Thanks for letting me back on.
2:06
Jim O'Shaughnessy: We won't even talk about my ghosting of you.
2:11
That would put me in a bad light, I think.
2:16
Alex Danco: Look, everything is a new light now.
2:16
There's just the before times, and the after times.
2:19
Jim O'Shaughnessy: That's right, and everything is priced to magic.
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So, let the good times roll, right?
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Alex Danco: So far, it's been mostly delightful.
2:26
Our second kid has been really a joy.
2:26
But the thing is, there's two of them now, not one. Twice as many. You have two or three? You have three, right?
2:40
Jim O'Shaughnessy: Three.
2:40
When you go from two to three, you go from one-on-one to zone defense.
2:42
Alex Danco: I was going to say, that's what everybody tells you. That's the line.
2:50
Jim O'Shaughnessy: The best idea though, was Patrick was 10 years older than Lael, my youngest.
2:51
He was extremely responsible, had a very paternalistic instinct towards his little sister.
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Alex Danco: Patrick is the oldest?
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He seems like the oldest.
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Jim O'Shaughnessy: He is the oldest, yeah.
3:06
We had him when we were 24.
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When asked, I used to say, I want him to like the same music I do.
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That's pretty much the truth.
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Then we had Kate who's an author and a wonderful human being, she was a very, very difficult baby.
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It turned out that she had probably some sort of reflux that we didn't know about at the time.
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But literally, she cried all the time.
3:25
That put me and Missy off a little bit about having number three.
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Then finally Missy was like, "Come on, let's just have another one.
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So, Lael came onto the scene and the the older kids actually were much more helpful than anything else.
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Alex Danco: That's honestly been one of the biggest, happiest surprises is how good our older one is with the tiny one. He's just been great.
3:48
We're very lucky parents. Jim O'Shaughnessy: Yeah.
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I'll tell you, man, those are the three days that are imprinted indelibly on my mind and memory, I will never forget the birth of any of the three of my kids.
4:02
Because I'm so much older than you.
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You're younger than my youngest?
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No, you're younger than- Alex Danco: I'm 32.
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So, you can slot me wherever you want.
4:09
Jim O'Shaughnessy: You're younger than Kate and Patrick.
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But anyway, Patrick was born in '85, they had just started the whole thing where the dad got to be in the birth, and I was so chuffed to just like yes, yes.
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Missy, I was watching and I'm like, "Honey, you got to see this, this is amazing."
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She was looking at me, and she was like, "Fuck you."
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Again, to her credit she did it all without any drugs because she had read that if you don't take the drugs, you bounce back much quicker and so she did in fact, but yeah, very unhappy with me when I suggested she take a look.
4:52
Alex Danco: That's a lesson learned vignette somewhere. To all new dads.
5:00
Jim O'Shaughnessy: Do not, do not.
5:00
Also, another one to all new debts, do not, no matter how hungry or starving you are, do not eat food that the hospital has brought for your wife.
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That one- Alex Danco: It's not yours.
5:17
Jim O'Shaughnessy: I was looking over my shoulder for a hitman for like the next year. She was so angry.
5:18
I'm sure you've seen The Exorcist, she went all exorcist on me, "You are my food."
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Anyway- Alex Danco: Does she listen to the show?
5:34
Jim O'Shaughnessy: Missy? Yes, she does. Alex Danco: Excellent.
5:38
Jim O'Shaughnessy: Not all of them.
5:38
She is a photographer, as I think you know, a street photographer.
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As a matter of fact, we are sending gifts now to people who come on, so you're going to get one.
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But there are three zines that she did with another street photographer and they're awesome.
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You shall be getting that.
5:55
But anyway, she doesn't listen to the market ones.
6:01
Honestly, she's so tired of...
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I guess I'm probably almost impossible to live with because it's like, "Honey, you'll never believe what I just discovered about...
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" Then she'll just do this, she'll put up her hand and she'll be like, "I don't want to know.
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I honestly don't want to know."
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Alex Danco: I'm filtering this out at the source.
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Jim O'Shaughnessy: Exactly.
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Alex Danco: I pass filter.
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Jim O'Shaughnessy: She's very smart about that.
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Because I can, as you might guess, I can get excited about new things, especially.
6:26
By the way, have you ever read the book, The Lucifer Principle?
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Alex Danco: The Lucifer Principle, no.
6:33
Jim O'Shaughnessy: I hadn't either. It's very good. I recommend it.
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I'm not done with it yet, but learning all sorts of new things that I didn't know.
6:40
For example, I had no idea where the term pecking order came from.
6:45
Alex Danco: Oh, enlighten me, I don't know.
6:47
Jim O'Shaughnessy: A guy decided to study chickens and their behavior.
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Conveniently, his mother and father had a chicken farm.
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He went, I don't recall his name right now, but anyway, this is, I think, 1920 or there abouts.
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He goes and sits in the chicken yard, with his notebooks, and he takes copious notes.
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Here's one of the first things that he noticed.
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When his parents put the feed down, the chickens look at it, but don't go running over on moss.
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One chicken, walks up, eats her fill, and leaves, then another one, and so on, and so on.
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He thought, this is interesting.
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He figured out ways to identify all the various chickens, and he found that the order never changed.
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It was also always the alpha mama, who went first, all the way down to the lowest, poor hen on the totem pole.
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He thought, this is interesting, chickens have hierarchies.
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He thought, I wonder what would happen if we threw a wrench into that.
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He went to another chicken farm, got a hen, tossed her into the chicken yard, all hell breaks loose, the chickens start pecking each other and have this huge brawl, and then they totally calm down and are placid again.
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He investigates the alpha hen has almost no pecks on her, all the way down to the poor little hen who's bottom of the totem pole, she is so pecked, that many times she dies.
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He invented the term, the pecking order, because the pecking order is for the alpha up here, all the way down to the betas down here.
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Alex Danco: This would be a good example of the fog of war principle that I believe we've talked about before on this show of why in social scenes, it's very important that there is not a visible pecking order.
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It's like, you can know who is on top, and you can know who's on the bottom, but it's very important that everybody in the middle is not resolved.
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Because if you do, it breaks the group apart.
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People in the top half will feel pressure to leave, and the people at the bottom half will feel that they're not welcome.
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Jim O'Shaughnessy: Exactly.
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Alex Danco: But it is very important that you have an alpha jock, and that you have a nerd at the bottom, so people can understand their roles in relationship to those people. Know more.
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Jim O'Shaughnessy: By the way, he covers that, too.
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There's the alpha, there's the class clown, there's the...
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All roles get assigned, no matter whatever your circumstance is, they get assigned.
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Like you say you the way to really fuck with people is upset their hierarchy or social order.
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When you do so, he gives all sorts of examples.
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I, for a long time, and I'm going to again, supported a charity called the Acumen Fund.
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One of the insights of the founder, Jacqueline was that she wanted to be like a VC.
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What she would do is see where a problem was, and then fund something that she thought would solve that problem.
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Really interesting is, she goes to Africa and she sees that all the mosquito netting that has been donated by the United States is disused, no one is using any of it.
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So, she talks to a bunch of African women, and they're like, "No, we have much more honor than that.
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We're not poor, we're not going to accept that as a gift."
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She has this insight, I bet that if I fund this woman's group that wanted to start a business doing mosquito netting, that would work.
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So, she funds the business.
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They do several options, from the most expensive to the least expensive.
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Guess what, all the women of the village come and buy it, and they're doing it to signal their status.
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Alex Danco: Or at least not be seen not doing it.
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Jim O'Shaughnessy: Exactly.
10:47
Then, I'm at a part of the book right now where he's talking about all the ancient squabbles and everything, and how in many cultures to lose one's honor or to go down in the pecking order, literally, they would prefer death.
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Alex Danco: This is actually a really good reminder of a book that I read recently, as a follow up to a book you recommended to me, which was Class by Paul Fussell, we've talked about this before on the show, great, great book.
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The thing about class is that, it is a book whose concept is timeless, of course, but whose particulars we have, to a large degree, moved on from.
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Jim O'Shaughnessy: No question.
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Alex Danco: The old wasp aesthetic has clearly been moved on from.
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In some ways, the middle class has the same anxieties and has the same relationship as they did before.
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But nonetheless, it's like many of the aesthetic things have been moved on from.
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The [inaudible] of the world has been completed.
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Basically we have the elite [inaudible] moved up and up and up and slowly swallowed a lot of things.
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Jim O'Shaughnessy: Exactly.
11:49
Alex Danco: But here's a book that was recommended to me that I have read since then, which is called The Sum of Small Things: A Theory of the Aspirational Class.
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It is by Elizabeth Currid-Halkett. Good book, I liked it. I definitely endorse it.
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It's this interesting- Jim O'Shaughnessy: Synopsize it for me.
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Alex Danco: It is a book about the people who I see every day in my neighborhood, or less, it is a particular group of people who are not the rich upper class with their own set of neuroticism, nor are they the large group of proletariat and upper proletariat, it is a group of people defined by they all have nannies and slightly struggle to pay for them for their children, but do it anyway.
12:32
It's very important, that, that is, in fact, the criteria.
12:32
There's this general idea that's familiar, which is poor people buy status, rich people buy time, which becomes the status.
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Because buying time is a lot more expensive than buying status.
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So, it becomes the real status.
12:42
Again, part of the whole part of why it's expensive being poor, when you are fighting your way upwards, class-wise, you have to spend money on things to show your class position, like mosquito nets or whatever, where, if you are at a certain class level above that, you don't actually just feel that pressure to do it. So, you just don't.
13:02
This is why, actually super rich people drive Subaru Foresters. It's a practical car.
13:07
That's not where I'm spending this money, I'm spending it on much, much, much, more expensive things.
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Jim O'Shaughnessy: A Subaru to take me to my Gulfstream IV.
13:18
Alex Danco: Right, exactly.
13:21
But this book is not talking about super rich people, this is talking about the merely professional.
13:25
This is families with mom and dad and two professional incomes, who are not divorced, and who are spending a lot of money on things that are very, worthwhile things, very worthy things.
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Things like their kids' schooling and everything to help get their kids get advantages and spending money on lots of organic food and produce and on this summer camp and piano lessons experience or whatever.
13:50
It's talking about all of the various costs and benefits and signals to all this stuff.
13:54
One that is particularly near to us, just because of what stage of our life we're in right now is breastfeeding, which is a really...
13:59
If you were to take a big, giant group of women, I guess just by the nature of the subject, one of the strongest class differentiators you'll see is breastfeeding, which is interesting, because you look, it's like breastfeeding is as sure a sign that you will get of income.
14:18
It's interesting because you look at this, you're like, well, why is this?
14:18
It's like, breastfeeding is "free", it doesn't cost anything.
14:21
It separates the opposite of free, because it costs you your time and optionality, if you're breastfeeding a kid.
14:26
That it's enormously expensive, and doing it, it's like...
14:31
You have this interesting paradox, which is that if you go talk to any mother in this peer group, they are not breastfeeding their kid because it is a status. Absolutely not.
14:40
They're doing it because they want to and because they've decided this is the thing that they're going to do for their kid.
14:45
They want to do it, they believe it has benefits.
14:48
They believe it's good for bond and all these real reasons why they're doing it.
14:52
But doing that has the effect of being a status symbol, because it means that you are deliberately sacrificing this very important thing called your time and your optimally.
15:03
It's like, you can't skip one- Jim O'Shaughnessy: It doesn't work that way.
15:06
Alex Danco: It doesn't work that way.
15:07
It doesn't work that way, exactly.
15:07
You can extend that to all kinds of these paradoxical things where it's like, the cheaper option is the more powerful status symbol, because it has a cost that is far, far, far greater in terms of time than in terms of money and symbols, in the literal sense, which you can just buy on credit.
15:25
That's the thing, you cannot fake that kind of expense, you cannot put it on a credit card.
15:32
It's impossible, and that's why it's powerful.
15:36
Jim O'Shaughnessy: Exactly.
15:38
What's interesting about that is that seems to be ruled by fashion.
15:45
I was born in 1960, and I was not breastfed, but not because my mother didn't want to.
15:52
She had unfortunately- Alex Danco: Probably didn't let her.
15:53
Jim O'Shaughnessy: Actually, she had breastfed my oldest sister, and got an infection in her breasts, and was unable to produce milk thereafter.
16:00
She was actually quite upset about it.
16:08
When I was talking to her about it later, I was like, "Everyone breastfed back then?"
16:08
She goes, "Oh, no, no one did."
16:14
My dad, he buys 18 books when all you need is one.
16:14
He'd gotten the 20 books on how to raise your kid, and one of them was, and I can't remember who wrote it, but was, you should breastfeed.
16:29
He tells my mom this, and she's like, "Actually, that's probably a good idea."
16:33
Because it was really like...
16:33
I don't know if it was a status thing or anything, because she said to me, man, when other women saw me, they were like, "What's up? What are you doing?"
16:41
Alex Danco: It had very different meaning.
16:44
Jim O'Shaughnessy: Back then, it was wet nurses.
16:47
Alex Danco: That's right. Exactly.
16:49
It is interesting, the degree to which...
16:49
Again, certainly, from my personal life, it's a really interesting little sociological cross section you can do is to go to the park near our house at various different times of day, and look at who is there.
17:03
What that says about the picture paints with the kids in the park.
17:08
When you go in the early morning, it is often parents on their way, with their kids on their way to dropping them off at daycare versus work.
17:15
Versus if you go two hours later, it's a different group of kids with all their nannies.
17:19
Versus if you go during lunchtime, it is a different set of older kids who are largely...
17:25
They're the exception to the rule.
17:28
There's kids from the local middle school that were hanging out or whatever.
17:31
But then if you go back again, you have a different set of kids, again, from the one income set of parents hanging out with them at the park, taking the place of the nanny kids.
17:37
Then late evening, yet again, you actually get an entirely different set of people from a much more working class set of families, during and after dinner.
17:49
It's really interesting how you have this whole sunrise to sunset change over the course of what kids you see there and why.
17:59
Which goes on to influence which kids are the other kids hanging out with?
17:59
These are more or less directly consequences of when do people have time versus not?
18:03
What time do they have available to them?
18:09
versus what time have they purchased in the form of child care or whatever it might be.
18:13
It sounds so interesting to just watch and see all these second order effects of this come out.
18:19
Again, we're not neutral here, because we are an active participant in this community.
18:24
So, I can't completely be a sociological observer.
18:24
It's fun to see all these things, and especially, occasionally, some parents who get competitive with each other, as parents sometimes do, participate a little bit.
18:36
And some of the status jockeying that takes place around.
18:40
It's really, really funny to watch, because again, as you know, it's sort of taboo to directly compete on things you brag about with other people.
18:43
Instead, people do it through proxies, the greatest one being kids.
18:49
It's like oh, you use your kid as this proxy battle for how virtuous you are as a parent and how much you have spent on how well they're doing.
19:02
It's funny to see this already start now.
19:02
Our older kid is two, she's a two year old.
19:06
But nonetheless, that doesn't...
19:06
Among her little peer set and all the parents of those kids, it's like you're already starting to see this. It's fascinating to see.
19:17
Jim O'Shaughnessy: It's amazing.
19:17
I've gotten the full process, which is a lot of fun, because those signals often intensify as your child goes through high school.
19:30
Then especially here on the East Coast of the United States, the competition to get kids into Ivy League school, is...
19:38
I'm from the Midwest, as you know.
19:38
When we moved here, and we're seeing all of the tutors for SATs and all this thing.
19:45
Missy and I, we both took SAT once.
19:45
Our parents didn't do one goddamn thing to help us.
19:52
Literally, now- Alex Danco: It wasn't because they were mean, it's just like it could have been weird. That would be strange.
20:01
Jim O'Shaughnessy: Exactly, that would be strange.
20:04
We learned in some of our kids...
20:04
All of our three kids went to the same primary school.
20:08
There was a scandal, because it was found out that one of the kid's parents had helped him write an essay.
20:15
I remember going into my dad, I had to write this...
20:15
For a seventh grader, I had to write a fairly detailed essay.
20:23
I go and ask my dad, and he looks at me, and this is the one great thing he did, because I did the same thing.
20:33
He had a big library, and he goes, "Look it up in there."
20:33
I remember that so much, that when I was raising my own kids, I did exactly the same thing, and you know what?
20:46
It's a great thing to do, because it encourages curiosity, and encourages lots of great things. Just by luck.
20:54
Alex Danco: Well, a couple of things.
20:55
One is part of the reason why I suspect parents face pressure to not do...
21:01
Parenting right now is impossible, because no matter what you do, you feel 10 tons of guilt every single day, because you were told that by the world around you and by your peers around you.
21:09
One nice thing about Canada is we don't have an Ivy League here, we don't have the concept of the Ivy League here.
21:12
We have the concept of good schools.
21:17
Jim O'Shaughnessy: McGill- Alex Danco: First of all, I went to McGill.
21:19
McGill is a great school.
21:19
But McGill undergraduate student body is 20,000 kids.
21:25
University of Toronto's undergraduate student body is 40,000 kids, and it's probably, I would say, the best school in the country, I think overall.
21:31
These are large institutions who see their job as producing as many learned graduates as possible.
21:37
Jim O'Shaughnessy: Exactly.
21:39
Alex Danco: That is not what the Ivy League does.
21:40
Jim O'Shaughnessy: No, God no.
21:42
Alex Danco: This is a very different mindset about what higher education is.
21:43
I got a great education about McGill.
21:49
If I had the choice to do it over again, I would go right back and do the exact same thing.
21:54
But you have a whole very different approach towards what university even is, because also the application process for these schools is literally what are your grades?
22:04
If they're above this line you get in, if they're not, you don't get in, more or less.
22:08
It's not exactly that simple.
22:08
But it's basically that simple.
22:11
There's no, what's your essay and your extracurriculars? What's your legacy?
22:16
How unique and special are you?
22:16
How- Jim O'Shaughnessy: What sports do you play?
22:18
Alex Danco: Because of that, there's a couple of downstream consequences of this.
22:21
It's like it's still competitive to get into these schools.
22:25
You still see this second order behavior on the part of parents where, like here in Toronto, there are these, they're called finishing schools or things like that, where kids can take extra classes where everybody gets As in order to burnish your grades.
22:39
It's basically paying money to increase your kid's GPA, so they can get into UT or wherever.
22:44
Jim O'Shaughnessy: I love it.
22:46
Alex Danco: That's the thing.
22:47
People hate on the thing. I think it's stupid.
22:47
I agree, but I don't know, this is just how people are reacting, it's a complex world, people are going to have strange reactions.
22:58
But the degree to which it's like...
22:58
When I think about my American peers, and the pressures that they face there, it's like night and day.
23:03
It's just absolutely not comparable.
23:06
Jim O'Shaughnessy: It's actually...
23:08
Having grown up in the Midwest and applied to college from the Midwest, and now living in the East since 1991, it is completely different on both coasts.
23:21
East Coast and California, this behavior is manic.
23:21
In the middle of the country, still pretty much not as manic.
23:28
I have noticed though, when I talk to friends who live in the Midwest or there abouts, it's increased...
23:35
Missy and I were talking about the other night, we had her mother over, 95.
23:40
I'm dying to get her on the podcast because she is so wise.
23:40
That generation is leaving us.
23:50
Anyway, that's a sidebar.
23:50
We were talking about Halloween.
23:50
When I was a kid, Halloween was fun, but you got excited the day of Halloween.
24:00
Alex Danco: That's such an interesting point.
24:00
That's such an interesting point. Huh.
24:01
Jim O'Shaughnessy: Now, it's like, the entire month.
24:05
I was over at Patrick's for dinner the other night, and both grandkids were like, "Papa, we can hardly wait that Halloween is coming."
24:11
I'm like, "Wait, isn't Halloween at the end of October?" Alex Danco: Hold on.
24:19
Okay, there's something really, really interesting in there that I want to explore.
24:24
We could explore this the whole show.
24:24
This is really interesting.
24:24
Okay, tell me if you agree or not with the following comment on that. Jim O'Shaughnessy: Sure.
24:32
Alex Danco: Let's take Halloween as example, because it's Halloween season right now. Jim O'Shaughnessy: Yep.
24:35
Alex Danco: It used to be at the day of Halloween versus now, it's like you have the month of Halloween as this buildup of anticipation for the day itself, which...
24:42
It's like the build up is the main event.
24:42
The build up is the thing.
24:42
Specifically, it seems like a lot of the build up, it's like a test of you, the parent.
24:46
What work are you doing to do this?
24:52
What work are you doing into the anticipation of the event?
24:52
It's like, unlike Halloween where you can objectively have a good time, the build up, that is actually not possible.
25:04
It is only a test of your devotion, and a test of your ability to demonstrate your commitment to whether it's good parenting or good Halloweening or whatever it might be, which is an easier forum for people to feel bad about themselves, and therefore has more capacity to absorb work and effort.
25:20
Jim O'Shaughnessy: I completely agree.
25:23
Again, to our experience of Halloween, I was lucky, a few days before I said to my mom, "Mom, will you take me down to Ben Franklin," which is a five and dime, so I can get a- Alex Danco: I know of Ben Franklin.
25:36
We had a Ben Franklin growing up.
25:37
Jim O'Shaughnessy: Okay, great. Cool.
25:39
Alex Danco: It's where we used to go too.
25:39
That's exactly what it was for, It was for Halloween decorations.
25:41
Jim O'Shaughnessy: Exactly, and/or candy.
25:43
But anyway, she was like, "Well, why do you want to go now?
25:48
Halloween isn't until three days from now."
25:48
Just kind of like, I'll take you on the day.
25:55
Then you've got a horrible mask with the strap that always broke, the elastic strap in the back. But you didn't care.
26:01
I'm sure you've seen Jerry Seinfeld's routine about Halloween and candy.
26:03
Get candy, get candy, get candy.
26:12
But now, just to allow you to continue on your exploration of this, it's like I would...
26:18
Again, it was at Patrick and Lauren's.
26:18
Lauren already has pumpkins, and I'm mystified and there you go.
26:24
Alex Danco: This is your allegory for college, it's like, college is now not about the four years of college, it's about the 15 years you spend preparing to get into college.
26:30
Once you're there, it's over.
26:37
Jim O'Shaughnessy: Exactly.
26:38
Notre Dame is not considered an Ivy, they call it the Catholic Ivy, because it's incredibly hard to get into.
26:46
Patrick and Lael went to Notre Dame, my daughter Kate went to Yale.
26:54
But what was interesting was, this was, especially with my daughters, this were their initiative.
27:00
It's like, because I had the attitude, the important part is to learn how to think and socialize to get socialized, and the rest of it doesn't matter.
27:12
It really doesn't matter where you go.
27:12
I had a very desultory switching from school-to-school.
27:17
That's a different story.
27:17
I was at School of Foreign Service at Georgetown, really liking it actually because they had some great professors, and then I met Missy, my wife over summer vacation. Love conquered all.
27:26
I graduated from the University of Minnesota, barely.
27:34
The reason I graduated with a degree in economics as opposed to history, I had four more credits in economics.
27:42
Alex Danco: There you go.
27:44
Jim O'Shaughnessy: That was the reason.
27:44
Alex Danco: That went on to shape your entire life, right?
27:46
Jim O'Shaughnessy: It did, oh, boy.
27:48
Honestly, I graduated college to please my mother, to be totally honest about it.
27:56
I would have much preferred starting a business at 18.
27:56
But it was just like, no...
27:56
Because you got to, again, put it into context.
28:03
My mom was a scholarship girl.
28:03
She got scholarships to everywhere, from high school to college- Alex Danco: That was back when scholarships were pretty scarce. Jim O'Shaughnessy: Yes.
28:15
Also, so was attending college.
28:18
Alex Danco: That's right.
28:19
Jim O'Shaughnessy: My dad graduated from Yale, my mom, a local school in St. Paul.
28:20
But their thought of having a child that does not have a college degree was so- Alex Danco: Yeah.
28:31
Jim O'Shaughnessy: It was sick.
28:31
Alex Danco: Now, it's this... Exactly.
28:32
It's taken on this incredible meaning.
28:32
There's so much to think about here.
28:36
Okay, let's go back to the Midwest for a second, which is you said that the Midwest is still relatively less insane than the coasts around this kind of thinking.
28:40
Although, I wonder, the degree to...
28:47
Somebody told me something like this that made me think a lot, which says like, part of the reason why the Midwest remained insulated from this ultra competitive effect for such a long time was the local companies that hired all the college graduates were local.
29:05
All the Dallas banks were hiring out of Texas, out of A&M or whatever it was, because they were local companies, and that's where the relationships were, that's where the local hiring networks were, all this stuff.
29:14
Since then, all these companies have now been swallowed into giant multinational companies, where the hiring is centralized.
29:20
Now, it's like, whatever local Texas bank got swallowed by Bank of America or whatever, and now they hire out of this big centralized things, looking at Ivy League schools, all these things.
29:31
It homogenizes a lot of the what people are looking for, through the hiring pipeline, which then creates more pressure, if you are growing up in Texas, to go to an Ivy League school- Jim O'Shaughnessy: Well, okay, of course.
29:43
Just let me interrupt briefly, because that's the oldest joke in the book, right?
29:47
I think it was an Onion headline, Texan who went to Harvard doesn't know which to mention first.
29:52
Alex Danco: There's got to be a good punch line to this joke, we didn't workshop here.
29:58
Something about I went to school in Cambridge...
30:01
I don't know, We'll figure it out.
30:01
Jim O'Shaughnessy: No, I actually had that happened to me when I had that [inaudible] I was doing a phone interview with a guy who wanted to come on board as a quant.
30:07
Because that folio was like Canvas, except Canvas actually works.
30:14
Anyway, he wanted to come on board...
30:14
Well, this was 1999, so the tech was not really there yet.
30:21
Anyway- Alex Danco: That didn't matter.
30:23
Jim O'Shaughnessy: I'm doing the phone interview with him, and obviously, I've got the guy's resume.
30:27
So, he starts, and I will not ask.
30:33
He's like, "Well, when I was at school in Massachusetts...
30:33
" I'm like, aha, no question.
30:40
Then a couple of beats later, "Yeah, when I was in Cambridge."
30:40
Literally- Alex Danco: He's so bothered by the fact that you didn't follow up.
30:53
Jim O'Shaughnessy: He got so bothered that he was like, "When I was at Harvard...
30:58
" And here's the pièce de résistance.
30:58
He said, "When I was at Harvard...
31:05
" I went, "Good Lord, why did you go to Harvard if you want to be a quant?
31:05
You should have gone to the University of Chicago."
31:09
Alex Danco: At least you said Chicago, and not MIT.
31:16
Jim O'Shaughnessy: Right.
31:18
Proceed about- Alex Danco: I can't remember where I was going. That's a great story.
31:25
Jim O'Shaughnessy: We were talking about the fact that in the Midwest, at least, the local company employed people.
31:27
In the Midwest, one of the best degrees to have was from a local or nearby institution, which, for example, in St.
31:34
Paul Minneapolis, where I grew up, MMM, Minnesota Mining and Manufacturing, they were a huge employer.
31:47
I knew several people at MMM.
31:47
I'm like, "Where do you hire?" "U of M.
31:47
They've got a great program."
31:54
You know the thing that blew me away? They really did.
31:54
When I was at- Alex Danco: It's a self-fulfilling thing.
32:00
[inaudible] these programs are fantastic.
32:00
Jim O'Shaughnessy: But when I was there...
32:02
I was economics because I had four more credits, it turns out that at that time, Keynesianism was really wobbly, because this is the '70s and the stagflation.
32:14
The '70s is one of the worst decades ever.
32:14
Alex Danco: Stagflation, what's that?
32:16
I've never heard of this.
32:16
Is this something that's in our near future or something?
32:20
Jim O'Shaughnessy: I wonder.
32:22
Anyway, Keynes is very wobbly, and into the breach comes the new school back then, which was rational expectations.
32:31
Essentially, their critique was brilliant in its simplicity, because everything in economics is ceteris paribus, all other things being equal.
32:41
Alex Danco: All other things being held the same. Jim O'Shaughnessy: Yeah. Right.
32:43
The founder of the rational expectations school, said basically, "That's not true at all."
32:48
They used a very simple explanation that anyone could get, and it was like, if the government changed its tax policy from X%, whatever it was back then, I think it was 70% back then.
33:00
If the government changed its tax policy from 70% to 99%, your models all assume that no one, no economic agent will change any of their behavior.
33:15
They're like, sorry, they do. Everyone wanted him.
33:15
I had the good fortune of taking classes from these guys.
33:21
Of course, after rational expectations became a big deal, Harvard, Yale, Stanford, they all pick them off.
33:27
But back then it was like yeah, University of Minnesota where my grandfather graduated from after getting kicked out of the one for having a beer or having a keg in the woods during prayer service, fantastic, 1902, at University of St. Thomas.
33:44
Those were the great names back then.
33:44
But now, we've gone literally global.
33:51
Alex Danco: Going global has a couple of effects, which is that, it creates this incredibly local punishment on the judgment of you as to whether you are doing what it takes to get your kids into Harvard, Yale, wherever. But at the same...
34:05
This is part of what I really like about Canada, is that, because it is still a relatively self-contained place with relatively contained expectations and measurements, there are obviously some people who are like, "I want to leave and break out of this and go to some us Ivy League school or I have some concept of good that is beyond this place.
34:24
I want to go to the real big city, I want to get out of this provincial dump."
34:30
Jim O'Shaughnessy: Actually, come on, Toronto is a wonderful city. Come on.
34:38
Alex Danco: It's funny, just before we recorded I was recording with Howard Lindzon on Panic With Friends.
34:40
We were talking about Toronto a little bit, where he's from.
34:47
Jim O'Shaughnessy: I know.
34:48
Alex Danco: About an interesting...
34:49
I'll talk about it in this podcast too, a really interesting thing I've noticed before post-pandemic, which is if you go downtown now, it feels much more American- Jim O'Shaughnessy: Really? Explain. Alex Danco: ... in an interesting way.
35:03
Jim O'Shaughnessy: I desire elaboration.
35:04
Alex Danco: The joke about Toronto always was that it was New York run by the Swiss, which was not a compliment.
35:12
It was just like here is this very functioning city but that is completely devoid of life and character.
35:17
That was the stereotype in the '60s, '70s, '80s, whatever.
35:17
Over the past 10 to 15 years, the city has exploded culturally with...
35:22
Not just exploded with population but with culture and with life and meaning and all this good stuff.
35:32
But has nonetheless been very, I guess I can say held back by a lot of it's social norms, about things being very orderly and things being not too flamboyant and showy.
35:43
Do you know the phrase tall poppy syndrome?
35:43
Jim O'Shaughnessy: Yes, I do.
35:45
I associate that with the Brits. Alex Danco: Yes.
35:47
Well, there's two meanings to it.
35:47
There's the tall poppy syndrome of actually excelling versus there's the, don't be a tall poppy, or else you'll get cut down.
35:55
Jim O'Shaughnessy: Exactly, that's the British.
35:57
Alex Danco: Kennedy is the same way.
35:57
It's like, don't stand out too much.
35:59
In 1,000 small ways, it is considered bad.
35:59
Since the pandemic, something interesting has happened, which is, in many physical places, like downtown, for instance, is full of people taking up more personal space.
36:11
Jim O'Shaughnessy: That's very modern.
36:15
Alex Danco: There a lot more people walking around with boom boxes, playing music, a lot more people zipping around on scooters, many of them food delivery couriers, this relatively new presence swarming around the streets.
36:28
But generally giving a little bit less of a shit about people around them.
36:35
Very like, I'm going this way. It feels very New York. It feels very New York.
36:40
Jim O'Shaughnessy: Very unCanadian. Very New York.
36:42
Alex Danco: It feels very American.
36:43
It's a sudden shift, but it's a real one.
36:43
Jim O'Shaughnessy: But New York is not in America.
36:46
New York occupies its own magic space in the universe. Alex Danco: That's true.
36:54
Jim O'Shaughnessy: When I was the principal salesperson for OSAM and other my earlier companies, I traveled all the time, and I would say to Missy, my wife, "Okay, honey, I'll see you in a week.
37:05
I'm going to real America."
37:05
Because, New York is not real America.
37:11
Alex Danco: Okay, that's true.
37:11
But I also feel like this thing that I'm articulating is something that America and New York have in common, though, which is this idea of the ego given more room to run. There is that super ego.
37:25
Jim O'Shaughnessy: Here we go, not in Minnesota, where I grew up.
37:28
Literally, when I would be giving speeches in Canada, everyone who wanted to talk to me afterwards would come up, and the first question they always asked me was, "How long have you been an expack?"
37:38
I'm like, "No, I'm from the States."
37:38
That was the other thing I learned, not America, because at that time, Canadians were really sensitive, is America calling itself America because you're a part of North America too.
37:53
I got trained to say the states.
37:53
This one guy looks at me, and he was dumbfounded.
38:00
He looks at me and he goes, "Where did you grow up?"
38:00
I said, "In the Twin Cities, Minneapolis, St. Paul."
38:06
He goes, "Well, Minnesota, that's a wonderful Canadian province." But continue.
38:13
Alex Danco: There was an interesting article that came out a couple of weeks ago about how all of the non-East Coast, West Coast regions of America, which used to be all these own regional identities are now all just slowly becoming the South.
38:26
The South became the culture that won, mostly because it was the most effectively memed culture of it being a rebel, and that was how you found this identity with rebelling against the East Coast or whatever.
38:37
It was a kind of counterculture, which I thought was interesting, and they use Minnesota as the example.
38:44
It was like, Minnesota used to be this very, very distinct place that clearly was Minnesota with its norms and the accents and hot dish and all these things.
38:48
Now, it's just like, if you go to a random suburb in Minnesota, it feels fairly similar to a random suburban in Tennessee, or whatever it might be.
38:57
Jim O'Shaughnessy: Probably quite true.
38:58
Alex Danco: In any case, though, going back to the original thing that I was talking about Toronto, it is interesting to me the degree to which, for a variety of reasons, maybe it's rebelling against lockdowns and against various, you can't do this.
39:10
Maybe it is just a practical consequence of there being more space for people, because the city emptied out, now it's slowly coming back together.
39:24
Maybe it's just the same trend line that's been going forward for a long time and we only noticed it because of this discontinuous shock of the pandemic.
39:30
It could be any number of these things.
39:35
Some consequences are great, some consequences are bad.
39:35
One of the bad consequences is that you know what, there's a ton of now, all around the city is street racing.
39:42
It's like the new official sport of Toronto now is illegal street racing.
39:42
It's pretty bad, actually.
39:48
Jim O'Shaughnessy: That seems so James Dean to me.
39:49
Alex Danco: It is very James Dean.
39:52
It is the same people as the James Deans, except for now they're all the second generation immigrants.
39:57
But it is the kids of people who emigrated to Canada in the '90s and whatever and now they are the James Deans.
40:03
That's a huge part of it.
40:08
A friend of mine, who lives on a street in Toronto called Parkside Drive, which is this long straightaway of road, right next to a park that has a hump in the middle of it that you can launch off if you go too fast is a very frequent site for racing.
40:19
He's just like, every once in a couple of months a car gets wrecked in front of the high park gates.
40:25
This is a new thing, this did not used to happen a couple of years ago, even.
40:30
It's going to be interesting to see what continues to unfold with this strange city.
40:34
Still, in many sense is a frontier city in many, many, many ways. Jim O'Shaughnessy: Yeah.
40:41
That feeds in, you know what I love about our chats is you and I talk about what we're going to talk about before we go on, and then we never talk about it.
40:48
Alex Danco: One time we did.
40:52
Jim O'Shaughnessy: That's right.
40:52
Alex Danco: That was our one presettable episode.
40:53
Jim O'Shaughnessy: That's right.
40:54
That actually feeds into world building.
40:54
I told you before we went on the air, that I call it the great reshuffle, the move to the digital world is having an undeniable impact, which I think COVID and lockdown accelerated mightily.
41:13
One thing is time, space, geography no longer matter.
41:13
One of my hires here on Infinite Loops, he lives in Bangalore, India.
41:20
His CV was me watching him on Twitter for like nine months, and the quality of his work and everything.
41:28
One of my little things is like, my degree in economics suggested competence.
41:35
He did nothing to prove it, it suggested that I was competent.
41:35
Now, I see this emerging as a trend that's going to continue.
41:43
Your CV is going to be a living, breathing thing that exists in real time online, and that's the way people are going to find you and hire you.
41:55
The idea that geography never matters, or doesn't matter anymore, I think it's huge in terms of what will happen to the workforce.
42:04
Alex Danco: Okay, I think that that is totally true, except for let me counter that with this opposite thing that I also think is totally true.
42:11
Which is, if you look at how people self-segregate, to be with people who are like them, in terms of the neighborhoods where they live, and also in another ways.
42:21
It's like, that self-segregation is happening at a rate and also at a degree of irreversibility that seems to be at all time highs. In terms of...
42:33
Again, these specific neighborhoods where this is happening are differently styled than it used to be.
42:38
To some degree, this is not different than the middle class taking refuge in the suburbs, 50 years ago, or people saying, oh, I want to be in this neighborhood so that I can be with other people like me or whatever.
42:47
Jim O'Shaughnessy: Or school district also really important.
42:49
Alex Danco: School districts, enormous part of this.
42:51
But I think the counter to the anybody can live and work from...
42:56
Right now, two things are happening once.
42:56
One, anybody can live and work from anywhere, that's great.
42:59
I work remotely as do many of my friends.
42:59
Nonetheless, looking around our neighborhood.
43:05
Everybody has basically the same kind of job.
43:05
Everybody seems like this is the same kind of person.
43:10
Well, how did this happen?
43:10
That's my challenge to you.
43:16
What actually got reshuffled?
43:16
Jim O'Shaughnessy: I think, well, what got reshuffled is tons of things.
43:18
Geography being one of them in terms of work, you no longer have to move somewhere to get a job.
43:25
A lot of people's unwillingness to move is gone.
43:34
In fact, we are finding that at OSAM.
43:34
You can work for OSAM and not be in the New York metro area.
43:42
I also think that the transfer and referencing...
43:42
Actually, I started thinking about this...
43:49
Well, I've been thinking about it a little bit before, but your world building article really got me going, because, moving into this digital universe, I am astounded by the leverage that gives a certain type of person.
44:01
I was just thinking, for example, yesterday, when I founded my first company in 1987, my physical presence was required everywhere to get anything done.
44:15
In other words, I had to go to a marble query to take a photo of the marble that I wanted on my brochure cover.
44:22
Because it cost a fortune to have a designer do it.
44:22
I had to go to both the Feds and the local regulators of investment advisors.
44:29
I had to show up in person.
44:36
When I moved here to Connecticut, I had to drive to Hartford, because, nothing could be done online.
44:40
Then I'm looking at this, I can't remember is it Y Combinator or something, they have this program that lets you found and form a business immediately.
44:46
I think that there is going to be a lot of opportunities for a specific type of person, not everyone.
44:52
But if you are a knowledge worker, and you don't care so much about your point, which I think is a good point, by the way, in terms of wanting to live with people like yourself, because you're going to hang out with them, and I get that.
45:11
I just think that what's coming, the leverage, that's inherent, and what's coming, and I don't mean financial leverage.
45:20
I think that lots of good, but also lots of bad might result.
45:20
I'm still on the totally speculative phase.
45:27
I'm probably wrong, as I usually say.
45:27
Alex Danco: It's funny that you mentioned Y Combinator, because Y Combinator is a fantastic representative of the power of leverage now, as the launching pad for all of these unbelievably valuable companies.
45:39
But, up until the pandemic, anyway, one of the rules of Y Combinator was you had to move to the Bay Area.
45:44
You could not do it virtually.
45:44
It was like the DMV in Hartford or whatever.
45:44
It was like, nope, this is actually something where you have to go here.
45:50
You could not do it remotely. There was not...
45:50
At the very beginning, it was actually it was in Boston, but then it moved to the West Coast and never looked back.
45:54
But that is, I think it's a good example of really, the value of Y Combinator is not in the investment, or even the mentorship, it's in the peer group.
46:04
That's really the point of Y Combinator is to be among other peers, who both inspire you and support you and challenge you and push you.
46:08
That's how these things work.
46:13
The degree to which Y Combinator going online with COVID coincided more or less perfectly with this happening to the startup community generally, with finally figuring out how to get a lot of the social dynamics and the social pressures to actually work virtually and not in a physical place, but I think the jury is still out on what's going to happen if it starts to settle back in specific places. Jim O'Shaughnessy: Yeah. I agree with you.
46:38
I do have a thesis that once you open that box, and it's actually working for people, very well, I think that the desire to require, let's be clear.
46:46
I think that, not desire, the impulse to require somebody to live in a certain area will basically be gone.
46:55
If I see an incredibly talented person in India, like I did with [inaudible] who now works for me, I don't care that he's in India.
47:10
I think where your point, I'm still like, I don't know the answer, is the basic human nature of wanting to be with like-minded people. Go ahead.
47:22
Alex Danco: Okay, here's where I want to challenge a point of yours, which is, one of the big paradoxes of let's just use this catch all term, inequality of the last 50 years, is, in the old days, the way that inequality was perpetuated was through physical barriers.
47:38
It was like, only you people can get into these rooms, only you people can get into these colleges, only you people can get these kinds of jobs, and therefore there's this very rigid way in which inequality was perpetuated, which made sense, it's fairly straightforward.
47:52
Now, we are in this much more progressive area where all spaces are open to all people.
47:52
Yet, it's the same people who are rich.
47:57
Not much change in terms of the outcome, even though the barriers towards success, which supposedly were the thing keeping out everybody else were removed.
48:08
Nonetheless, it's still the same people who are still getting all the success. Why?
48:11
Let me ask you this- Jim O'Shaughnessy: Go ahead, you were going to say something.
48:15
But then let me tell you where I'm getting this with your theory. Okay, please.
48:15
Alex Danco: You have this idea, which is that anybody can work from anywhere.
48:16
It's like, that's great, you're no longer required to move to California, Minnesota, wherever it is to get X job.
48:20
Anybody can apply from anywhere.
48:28
Nonetheless, if you are allowed to work anywhere you want, there are going to be a lot of people who know the right people and talk the right way and have the right ideas and who can fund their self-exploration towards getting really good creative jobs or whatever, who also have a high degree of overlap with people who want to live in Manhattan, because they're young, rich people.
48:50
Then they get around all the other people who are like that, and then that's where the company gets started.
48:53
There was no requirement to live in Manhattan.
48:53
Anybody can live from anywhere, anybody can work from anywhere.
48:58
But nonetheless, the company ended up getting founded and the important founders equity ended up getting distributed among people who all were in a certain very elite exclusive place anyway.
49:06
The same thing got recreated, except for without the "barrier".
49:12
Jim O'Shaughnessy: Right.
49:12
I would counter that my many, many rabbit hole dives into human OS would support that idea.
49:18
That through no coercion at all, from the founder of that company, I would think that your point was well taken.
49:26
Here's what I'm waiting to figure out.
49:35
That is, I as you know, I'm a base rate guy and persist.
49:35
I think, that, that is a worthy question mark, that I don't have an opinion that's strong enough to say, yes, no, or even maybe.
49:49
My own experience with New York is right now, Alex, the only part of New York that has come back is downtown.
49:56
You go to Midtown- Alex Danco: Midtown is empty.
49:59
Jim O'Shaughnessy: You could shoot a cannon down Park Avenue. Alex Danco: Sure.
50:05
Jim O'Shaughnessy: Talking to a lot of friends here, I'm not sure that the banks, for example, most of them used to be headquartered down on Wall Street, then they all migrated up to Midtown, with the exception of Goldman Sachs which stayed downtown.
50:19
The banks are trying to get people to come back in and people are quitting, rather than come back in.
50:25
This is to be determined from my point of view.
50:25
I understand you're congregating with like, and I also understand the incredible benefits of living in a place like Manhattan, because it has everything.
50:39
It's like, if you can't get it in Manhattan, if you're interested in it, or some exotic kind of...
50:44
Literally anything, if it's not available in Manhattan, it's probably really, really hard to get.
50:50
I get that, but I'm waiting for the data to come in.
50:56
Because what we're seeing is we're seeing a lot of our friends who are entrepreneurs leaving the area entirely.
51:01
They're going to Austin, going to Miami, going to- Alex Danco: well, I would say, among my peer set that has definitely been net new people going to New York, for sure.
51:11
New York has been a beneficiary among the people that I know, in terms of attracting startup talent, for sure.
51:20
I would say, within the relatively tiny box that is tech, New York has been a beneficiary.
51:26
Jim O'Shaughnessy: I totally agree.
51:27
Alex Danco: Because people want to live there, period.
51:28
Therefore, that's where the company is starting to grow.
51:32
Jim O'Shaughnessy: I tell you, man, the advice I always give young people that I'm dealing with is, if you can live in Manhattan, live in Manhattan, especially when you're young.
51:43
Because the minute you start having kids, you might not like it as much.
51:43
New York beneficiary but I'd have to look at the...
51:50
For example, I'm not going anywhere.
51:50
It's like, I'm older and I see nothing compelling me to go anywhere else, just because everything I like is here, and maybe that's just me, I don't know.
52:04
But a lot of folks, they're like, see you in New York, see you in New Jersey, see you...
52:09
We're going to go and do this.
52:09
I think that location, other than the ability for someone who physically doesn't live in the United States, and would have a very difficult time getting a card to get in here, I think it's going to be a net positive for them.
52:30
I also think the idea of the old style CV is going to change rather dramatically.
52:30
Now, I'm only saying this for a specific group.
52:39
I hate the term, but knowledge workers.
52:43
Alex Danco: Although, it turns out that a group can be bigger than anyone imagined, though. Jim O'Shaughnessy: True. Very true.
52:46
I'm going to have you on as my contrarian guy.
52:53
Because I think that there are a lot of things that be locked down that COVID caused, seemingly universally, really accelerated trends that might have not taken hold for, I don't know, another seven or 10 years.
53:09
Alex Danco: One of my theses about COVID, and the lockdown is the long term impact of the lockdown will be very, very heterogeneous.
53:17
It'll have radically different consequences in different countries, depending on what that country was, and what was the system there and what were people doing and how do people think about it?
53:25
I think it's going to be divergent, not convergent.
53:31
Jim O'Shaughnessy: I completely agree.
53:31
I also think that to try to disambiguate the actual number of COVID deaths versus what they're claiming right now, that's going to be a super long term project, because, it's like all the rats without tails in the Raj in India, when the Brits ran everything.
53:46
They said, we got to get rid of these rats.
53:50
Bring a tail, and we'll pay you the money, and of course, you know, what happened, they all bred rats to take their tails off.
53:54
I think that another consequence of this is the secondary and tertiary effects are still yet to even...
54:03
I don't even see anybody writing about it.
54:11
The number of suicides, the number of drug overdose, the number of people who died because they didn't go to the doctor for their normal appointment, because they were frightened to go to the hospital.
54:22
Alex Danco: That's going to be a long and very important project.
54:24
But the anecdote that I keep coming back to, in my mind over and over again about what is COVID about, is last year, I think we may have even talked about this on the show, last year, this would have been probably June of last year.
54:39
It was still recent, relatively freshman.
54:39
We were still figuring stuff out.
54:43
I was out for a walk, and I was in the park, I was in Withrow Park in Toronto.
54:49
These three people were walking towards each other on the path.
54:49
Two women walking in one direction and somebody walking in the other direction.
54:54
As they walk towards each other, and there was clearly this conflict about what was appropriate yielding at a cat or whatever.
55:04
Within seconds, it exploded into the three people screaming at each other.
55:11
It was really, really obvious looking at them that this was the best time they'd had in years.
55:11
They were all loving this.
55:17
It was so exhilarating for them to scream at each other over this tiny thing.
55:28
It's like, okay, the lesson here is clearly that this is this step function playing field of how people are feeling about themselves, how they're projecting it onto other people, that is brand new and non-incremental.
55:38
How is this going to play out?
55:43
This is why I say that the pandemic's net effect is going to be divergent because fundamentally it's like what's going on now is a mirror about how we feel about ourselves, and people feel about themselves very differently depending on where in the world they're at and how things are [inaudible] there.
55:54
Jim O'Shaughnessy: Absolutely.
55:55
Alex Danco: This is also an interesting way of the idea of America exports this neuroticism to the rest of the world, of how a lot of the discourse in other countries with some lag is becoming very Americanized, although that's probably what gets reported on in news to a larger respect.
56:06
There are probably exceptions like in Australia, I think it actually has become fully Americanized as an issue.
56:16
In terms of the terms of the discourse and how it's framed and things like that.
56:16
But I don't know what people in Budapest are thinking about what happens when they hold a mirror up to it.
56:28
We should ask our good friend Anna [inaudible] at the [inaudible] how this has looked in Europe.
56:33
Jim O'Shaughnessy: She was here in New York, I had a dinner for her. It was wonderful.
56:34
I met a lot of really great people.
56:38
Alex Danco: I was really jealous. It looked amazing.
56:40
Jim O'Shaughnessy: Well, you got invited, I think.
56:42
Alex Danco: I know, I had a one day old or something.
56:46
Jim O'Shaughnessy: Right.
56:46
That would have been a bad move on your part.
56:47
A history of the worst moves, that would be on there.
56:56
Alex Danco: That would have been up there.
56:57
Jim O'Shaughnessy: Anyway, we were talking a little bit about that.
56:58
She was more in the mode of, well, I'm doing so many of these salons, and maybe they're affecting me, because we're getting speakers from all over the place.
57:11
We stay on the topic, and maybe we never get around to talking about, what's happening in your town or your country in terms of the way that this is getting reacted to?
57:24
I think you're absolutely right about it will have a different effect, depending on the country, yes.
57:29
But- Alex Danco: Not just depending on the country, depending on the neighborhood. Jim O'Shaughnessy: Yeah. Right.
57:32
One of the things that I've been noticing recently is that...
57:36
Connecticut has an 80% vaccinated rate, as you would expect. Then the new...
57:45
I joke that we're going to go through the entire Greek alphabet, when we get to the omega strain.
57:50
Alex Danco: The final boss.
57:54
At least when we get to omega, we'll know it'll be the last one.
57:58
Jim O'Shaughnessy: That's right.
58:02
Maybe we can start to naming the variants like they name hurricanes, I don't know.
58:06
Alex Danco: That's right.
58:06
What are they going to when they're past omega?
58:07
Are they just going to start to go like movie theater seats, like the alpha, alpha?
58:11
Or are they going to pick a new- Jim O'Shaughnessy: They'll pick a new thing, I think so.
58:17
But one of the things I was going to say is that literally, in New York City, in particular, and here in Greenwich as well, people have gotten to this place where it's like, I'm over COVID, man.
58:32
Because I'm vaccinated, and there's this idiotic thing, between the vaxxers and the...
58:40
I try to mute all those words on Twitter, and they're impossible. It's impossible.
58:40
Anyway- Alex Danco: If you could mute one word, what would it be and why is that word, research?
58:49
Jim O'Shaughnessy: I love that.
58:56
I haven't muted that word yet, and I'm going to right after this podcast. That is fantastic.
59:02
It's just like I will finally be in this blissful place without people...
59:11
What I love about it is, it just never ceases to amaze me watching people assert their very flimsily arrived at opinion about something, as if it were given to them by God, him or herself their self, and this is...
59:26
You know all the jokes about there were originally 15 commandments? Yeah. Okay, we'll stay there.
59:32
Alex Danco: We'll let you [inaudible] Jim O'Shaughnessy: My point here is that suddenly people are on moss, at least in this area.
59:39
Like, okay, I'm fucking over COVID.
59:47
I'll give you some examples.
59:47
Everyone freaked out with the Delta or whatever, and if you're going to go to a restaurant or a club or anything, you had to have a mask on even if you were vaccinated.
59:58
A couple of weeks ago, we noticed that changing big time and it was like, if you're vaccinated you don't need a mask.
1:00:06
We also noticed that you're supposed to show your, may I see your papers, please.
1:00:12
Alex Danco: We just started doing that.
1:00:15
Jim O'Shaughnessy: No one's asking for them.
1:00:16
The other thing that just amuses me and you know that I'm a freedom maximalist, right? Alex Danco: I do.
1:00:22
Jim O'Shaughnessy: I don't want anarchy, but I want as much freedom for individuals until they impinge on someone else, then that's a nice rule of thumb.
1:00:29
But by the same token, we have to have driver's license.
1:00:35
When I was a kid, I got vaccinated against all of these things.
1:00:35
Nobody was screaming, and- Alex Danco: There's a strong libertarian tradition of saying that we shouldn't have driver's licenses.
1:00:43
Jim O'Shaughnessy: I know.
1:00:45
Actually, now, this is why I love these podcasts with you, because we hit on these really interesting things.
1:00:52
I have a cousin who, super high IQ, super high, like 195 and he literally...
1:01:02
That's not a Stanford–Binet. I know you made a face.
1:01:02
Anyway- Alex Danco: 195, I'm just trying to imagine what that even is.
1:01:12
Jim O'Shaughnessy: His mother tragically died quite young. She had, whatever...
1:01:16
I can't remember, this is back when Stanford–Binet was new, when his mom was taking it. She got a fantastic...
1:01:22
I don't know how high the score goes.
1:01:22
There's another thing, by the way, I don't give a shit.
1:01:28
Directionally, if your IQ is anything above 140, man, directionally you're really, really, really smart.
1:01:34
Alex Danco: You're so smart, you're stupid category, probably. Jim O'Shaughnessy: Yeah.
1:01:41
My very bright on the Stanford–Binet IQ standard cousin, dedicated libertarian.
1:01:49
Literally- Alex Danco: Big poster of the bell curve meme with the- Jim O'Shaughnessy: Yes.
1:01:55
Then, he decides he wants to see America.
1:01:55
He gets a little motor home and this is now 20 years ago. So, a long time ago.
1:02:03
He gets stopped by the police because he's doing something wrong, and he probably was, knowing this cousin, he probably was. They stop him.
1:02:10
You've seen Good Will Hunting, right?
1:02:16
Alex Danco: I have not seen Good Will Hunting.
1:02:18
I am aware of the movie, Good Will Hunting.
1:02:22
I know what the movie is and what it's about.
1:02:22
But I actually haven't seen it. It's in the bucket list.
1:02:26
Jim O'Shaughnessy: Anyway, my cousin gets stopped.
1:02:27
He pulls The Good Will Hunting, argues because he knows the law very, very well.
1:02:34
He's as- Alex Danco: He knows the letter of the law anyway.
1:02:35
Jim O'Shaughnessy: Exactly.
1:02:37
Not the spirit of the law, the letter.
1:02:37
I love that distinction.
1:02:37
He knows the letter of the law.
1:02:46
The judge is looking at him, and shaking his head and letting him go.
1:02:46
He didn't have a driver's license.
1:02:53
He said, "I am an American, and as such, I will show you my birth certificate to show you that I'm an American, because that is a legitimate question."
1:03:01
Because the rights and privileges of being an American citizen.
1:03:05
And there's other stories that IM not going to get into.
1:03:10
I'm talking to him at one of our family reunions.
1:03:10
I'm like, "Larry, I understand, I get it, and all that.
1:03:17
But why make your life so much more of a hassle? Why would you do that?" Go.
1:03:28
Alex Danco: No, I was just going to say, this sounds so much like the three ladies in the park story.
1:03:32
Jim O'Shaughnessy: You know what, maybe that's what triggered him in my mind.
1:03:34
It's like he was- Alex Danco: It's the most fun he's had in years.
1:03:38
Jim O'Shaughnessy: Years, exactly.
1:03:39
He got to applaud authority, get technical with the judge who is just like, fuck, this is just like a traffic stop.
1:03:47
Alex Danco: It feels so good to push back against the perfect villain that was made for you.
1:03:53
Jim O'Shaughnessy: Yes, exactly.
1:03:54
Alex Danco: It's exhilarating, it's absolutely exhilarating. Jim O'Shaughnessy: Yes.
1:03:57
Not my thing, but I totally understand, in that context, you're right.
1:04:01
Alex Danco: Okay, I got to go in a couple of minutes.
1:04:02
I want to close with a question for you, which is a question about The Wire, which I would love to know which take you're on. Okay.
1:04:10
One of the great meta jokes in The Wire, one of my favorite jokes is that you have this character, Stringer Bell, who is established as this master strategist, genius, behind all of the running of this empire or whatever, and they're always establishing the contrast between the inept Police Department versus this genius, Stringer Bell or whatever.
1:04:34
Yet, he has a terrible understanding of economics and makes very poor decisions.
1:04:34
He is not actually in control of things, he does not actually have a good understanding of the world around him, and ultimately, it gets him killed. It has these funny...
1:04:44
There's this representative scene, I think, that's really good, which is when they're talking about the cell phones.
1:04:47
Remember when someone, I think it's...
1:04:52
I forget who is talking about so and so has two phones.
1:04:52
Then he's like, "Okay, call my broker, tell him to sell my Nokia stock. Market is saturated."
1:04:58
It's like, no, you should be buying Nokia, because clearly there is all this elastic demand for these phones.
1:05:03
That is direct evidence against that, this is evidence that you don't actually understand these things.
1:05:13
Here's my question for you, was that all done on purpose, or was it an accident?
1:05:18
Jim O'Shaughnessy: No, I...
1:05:18
I would love it if it was an accident.
1:05:22
That would be even better.
1:05:22
But it's so funny that you...
1:05:22
Because I had the same, after we were done watching it, I was trying to engage Missy in the same conversation.
1:05:30
I'm like, wait a minute, he's stupid. He's an easy mark.
1:05:35
Alex Danco: He's book smart.
1:05:40
That's the whole joke is like, here's this example of street smart but actually is book smart.
1:05:44
Jim O'Shaughnessy: Book smart, exactly.
1:05:45
This is that thing about- Alex Danco: Getting into the real estate deals, he's trying to- Jim O'Shaughnessy: Omar run the streets.
1:05:52
Alex Danco: Omar or Avon.
1:05:52
More directly, Avon, his boss- Jim O'Shaughnessy: Avon was the original street gangster.
1:05:56
Alex Danco: That's right.
1:05:58
Jim O'Shaughnessy: By the way, took great pride in it.
1:05:59
Alex Danco: He was, know what you're selling and go sell it.
1:06:01
Jim O'Shaughnessy: Exactly.
1:06:03
Alex Danco: Know what you do and go do it.
1:06:03
Jim O'Shaughnessy: Exactly.
1:06:05
Well, my friend, you know what we're going to do next time?
1:06:09
Alex Danco: What are we going to do next time?
1:06:11
Jim O'Shaughnessy: We're going to actually cover all the topics that we were going to cover in this one.
1:06:12
Alex Danco: You know what I want to talk about next time, in addition to all the topics we said we were going to talk about this time?
1:06:17
I want to talk about how the world is going to diverge because of COVID.
1:06:20
That was a super interesting topic that we touched on.
1:06:23
Jim O'Shaughnessy: Totally agreed.
1:06:24
Alex Danco: We should try to dedicate an episode to that. That'd be good time.
1:06:25
Jim O'Shaughnessy: You know we won't because it's us- Alex Danco: Because we'll talk about something else, right.
1:06:29
Jim O'Shaughnessy: But we will try. All right, bye. Alex Danco: Sounds good. All right. Bye, Jim. I'll talk to you later.
1:06:33
Jim O'Shaughnessy: Thank you. Bye. Congrats.