Ep.89 — Dave Nadig — Decoding the Metaverse — searchlore

Ep.89 — Dave Nadig — Decoding the Metaverse

Published Feb 3, 2022

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0:08

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.

1:46

Jim O'Shaughnessy: Well, hello everybody.

1:50

It's Jim O'Shaughnessy with another episode of Infinite Loops and I cannot tell you how much I was looking forward to today's guest.

1:59

It is my friend, Dave Nadig, a pioneer in the ETF world.

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You are currently the Chief Investment Officer, the Director of Research for ETFtrends.

2:05

com, you're the author of a book about ETFs, but that's not why I love you, Dave.

2:16

Dave Nadig: We're not going to talk about any of that.

2:18

Jim O'Shaughnessy: We're not going to talk about that at all.

2:21

And so I got a DM from Dave a few days before this podcast and he's like, "So, what are we going to talk about?"

2:29

I'll do you know lessons from the pandemic, I'll do deep dive on Jed McKenna, I'll do the favorite blues guitars, whatever you want to do.

2:39

That is why I love you, sir. Welcome.

2:41

Dave Nadig: Well, thank you so much for having me.

2:43

I will admit a rare moment of crippling imposter syndrome given your previous guest list.

2:50

But our mutual friend, Tom Morgan talked me off the ledge.

2:53

Jim O'Shaughnessy: Well, so we're going to start, I think, with the piece you wrote, which I think is brilliant.

2:59

We'll get to it in a minute. But it made me...

3:03

I realize my own memory is lying to me every day and that's why I keep all these journals.

3:09

And so after I did the podcast with Tom, where he developed his thesis about love and that's what binds the world and everything, which I thought was really interesting.

3:19

I kind of thought, "I think I wrote something about that."

3:24

And so I go back and I find...

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And by the way, 27, 24 year old Jim, way smarter than 61 year old, Jim.

3:33

So anyway, I loved doing science fiction treatments and I found it and it was, I think from 1988, so that would've made me 28.

3:43

And I'll just give you the real brief theme.

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The theme was that very advanced aliens were opening up a window onto earth for a brief period of time to see whether we were ready to ascend to a higher order.

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And in the treatment, I said the last window started in the kind of mid sixties...

4:12

And by the way, right before I was coming on with you, I'm listening to The Amboy Dukes' Journey To The Center Of Your Mind.

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If you watch music videos from 1966 through about 1970 whatever, hello- Dave Nadig: Trippy stuff, yeah.

4:28

Jim O'Shaughnessy: So he calls it, Phase Change.

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And so I found the treatment and I'm like, "Huh."

4:36

Yeah, by the way I had in the treatment that our dear friend Richard Nixon slammed that shut, he found out about it, slammed the shut and that was the reason that he arrested and made an example of Timothy Leary.

4:51

Dave Nadig: Oh, I love it.

4:53

Because he was our true progenitor. Got it. Yeah.

4:57

Jim O'Shaughnessy: Exactly.

4:58

But honestly, I do kind of think there is something to this notion that there are Phase Changes as Tom calls it, I call it The Great Reshuffle, everyone's got a different name for it.

5:10

But when I read your piece that you called MetaVerse: Brave New World or Capitalist Hellscape?

5:16

I thought it was very good by the way but I wanted to use that as our jumping off point because I think we're in another...

5:23

I think the window's open again.

5:25

Dave Nadig: Yeah, absolutely.

5:27

I agree, I think that the window is opening and some of it's generational, I think that's one interesting way of thinking about this.

5:35

I'm a big fan of Neil Howe generational theory wrote The Fourth Turning, probably got a little more press than he wanted to around the last election, currently writes for Hedgeye but I read his stuff religiously.

5:48

And one of the things that he really beats home is that every generation is brand new, everybody thinks that they've invented everything and every generation effectively does invent everything all over again.

6:01

And it's really easy to be on this side of the generational gap, I won't say which side we might be on, but the other side of the generational gap.

6:08

Jim O'Shaughnessy: I will, we are olds.

6:10

Dave Nadig: Yeah, we are olds, we're on the other side.

6:13

Well, I'm on the edge, I'm technically not a Boomer because I'm just young enough that I'm a Gen Xer but- Jim O'Shaughnessy: I love that. Dave Nadig: ...

6:20

I'm a cusp so I'm an okay cusp Boomer.

6:24

But I do think there's some truth to that, that you see the generations that are younger than you reinventing things that you feel like you've been through before.

6:33

And it's so easy, I feel that emotional knee jerk reaction to be like, "Well, these kids today, get off my lawn.

6:40

I feel it, that's a real thing, that is not made up culture, that is a real thing.

6:45

The Simpsons had it right, Old Man Yells at Cloud.

6:47

But the reality is I think it's incredibly important when you see those moments of invention happening, a generation younger than you, that's the future, you are witnessing the future being manufactured in real time.

7:01

So to dismiss that is the worst kind of delusion, I think you have to wade deeply into it and I think that's what the metaverse is.

7:07

Jim O'Shaughnessy: Yeah, I agree.

7:11

And so I for one, I'm thrilled, I just think that this new world that's unfolding, yes it will have all sorts of problems, no question, all worlds do.

7:22

But I had Matt Clifford on who did a thesis that was...

7:29

Essentially after Napoleon tried to take over all of Europe and crown himself emperor, the Western democracies were kind of like, "We might want to dampen the variance a little bit here."

7:40

And so they created a host of variance dampening institutions, right?

7:47

So a very ambitious guy like Napoleon, instead of having a long war and then having the inspiration for a bloody revolution that killed even the people who were in favor of it, everyone was like, "Wait a tick, let's bring this down.

8:03

Let's give the Napoleons of the world a ladder to climb."

8:08

Let's say, "No, you're going to go to Oxbridge or Yale and Harvard, then you're going to join McKinsey and then you're going to be a partner, everything will be great."

8:15

And so we saw are this compression.

8:18

And then we throw the world's greatest, history's greatest variance amplifier into the mix, the internet.

8:28

Dave Nadig: Internet, yeah.

8:30

Well, and it's been and...

8:32

Look, there's a certain crew of us, some of us are in financial Twitter, some of us who are in the cognitive sciences field, some of us come from religious backgrounds but there's a crew of folks on the internet that debate all of these things.

8:45

And on the one hand, I think it's important that we acknowledge what a ridiculous sign of privilege it is to have the time and the mental space to be able to even think about these things, as opposed to food, water, family, health.

8:57

So putting aside, we need to acknowledge our ridiculous privilege to even be part of that discussion.

9:04

I think you're right, I think this is an important thing to monitor but where I diverge from that crew a little bit, I'm pretty deeply uninterested in trying to point out, why where we are is broken.

9:19

That sort of recidivist history business.

9:22

I understand the reaction, I hit delete on hundreds of tweet replies and messages that I don't send because there is this sense of, somebody is wrong on the internet about something that happened that I witnessed or that I was part of or that I'm deeply read on.

9:38

You're deeply on Napoleon, you could talk about that forever.

9:41

I've become less and less interested in that.

9:46

Not because I think it's unimportant or it's uninteresting, I just don't think I personally have much of an effect by wading into that.

9:55

And I think it's much more interesting to focus on what's being built than what was built and broke.

10:00

And there's a lot of what was built and broke and we could spend a hundred and we have spent a lot of time talking about things that are broken and why they're broken and your whole podcast with Tom Morgan about how we've created a world that exacerbates the left brain, hyper focused dominance.

10:15

And those are super interesting discussions but every day I wake up and this is where I live and I don't live then, I live now and I'm trying to get to tomorrow.

10:23

Jim O'Shaughnessy: Oh, man.

10:26

No wonder that we are brothers from different mothers, I guess.

10:30

Because that also is the distillation, I think, of the combination of Stoicism and Daoism and it's basically, I always put up that Oppenheimer quote, "Of course the world's going to hell.

10:44

And the only thing that we can do to stop it is to not try to do anything to stop it." Right? Dave Nadig: Yeah.

10:52

Jim O'Shaughnessy: So I like you, obviously want to focus more on all the cool shit that I see happening every day because you're right, we have enormous privilege.

11:05

But one of the things that I see happening as well is that the internet is killing geography, time and space and it is giving people, just regular folks, for the first time in human history the ability, if they're talented, to have somebody A, notice that talent, then B, hire them or subscribe to their Substack or whatever.

11:30

Dave Nadig: You guys have leaned heavy into this, right?

11:32

You've hired a bunch of people you've never met at this point, right? Jim O'Shaughnessy: Yeah.

11:35

Dave Nadig: And our firm we've done the same thing.

11:36

I mean, we've hired, I don't know, dozens of people in the pandemic and I don't think any of them live anywhere near where we used to have offices and that's a beautiful thing.

11:44

I think that the challenging part for me though, not to beat this horse to death but I really want to push you forward on this, Jim is, when we talk about things like the metaverse, let's bring it back to that for a second.

11:56

I think when guys of our age and hair and color and socioeconomic status, start talking about stuff like this, we need to understand we're carrying that baggage into that conversation.

12:09

And so when we say something even remotely critical about somebody's DeFi project or the next token idea that somebody has, the immediate reaction is and should be, "Well, these are just olds, they don't care about this.

12:22

They're just resisting change."

12:23

And I really want to push against that because what I see when I look at what's going on inside the metaverse as a large topic or any individual project is a tremendous amount of good intention.

12:35

You talk to most folks who are really maximalist about this Web 3.

12:35

0 stuff, you talk to the NFT guys, they're fired up about artists rights, they're fired up about residuals, their hearts are in all the right places.

12:48

And so when I contribute to those discussions at the tiny level I might be able to and I have something to bring, often what folks like us have to bring is not history but reality.

12:59

Like, "This is what the regulatory environment looks like today.

13:04

This is how trading in custody works today."

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Not like, "This is how we used to do it and therefore we should always do it that way."

13:10

But if you don't understand the state of play, you can't change it.

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And I feel like that's where guys like us have a little bit of an opportunity to contribute because I think we have a really strong understanding of the state of play when we woke up this morning and you have to start where you wake up, you don't get to start yesterday.

13:26

Jim O'Shaughnessy: That is a great point.

13:30

And just on one side of that point...

13:34

By the way, I agree with everything you've just said, I always am trying to look forward, I'm always trying to say, "Okay, so what's the logical end state here?" Right?

13:44

Dave Nadig: Mm-hmm (affirmative).

13:45

Jim O'Shaughnessy: I did it with Netfolio, which became Canvas.

13:48

But that was all around the lines of...

13:50

One of my little thought exercises that I like to play is, "Okay.

13:54

So we now have this technology, this technology is going to enable, in my opinion, it's going to enable regular people to be treated like the ultra-rich were treated a century ago."

14:10

And so when you start thinking that way, "Well, the ultra-rich all had drivers or carriage men, right?" Uber.

14:18

"Well, the ultra rich had all of these homes scattered all around the world." Airbnb.

14:24

"Well, the ultra-rich had their portfolio managed specifically for them." Hello, Canvas. And so on and so on.

14:33

So one of the things that you touch on in the article is this idea that what you see happening, I think, I don't want to put words into your mouth, but is the idea that if we're looking at where end states are, which begin as new beginnings then, right? Dave Nadig: Right.

14:53

Jim O'Shaughnessy: The beginning of infinity, right?

14:54

We never have a settled model, we always are moving forward, which is fantastic.

15:00

But one of the things that you mentioned, is everything going to ultimately just turn into a token?

15:06

Dave Nadig: Yeah, I actually am a big fan of this idea.

15:11

And I'm trying to think when my first aha moment tokenization may have been.

15:15

So I used to say this at the very beginning of the internet, back in the '80s I had a PLATO terminal, I mean, talk about ancient, right? '85 something like that.

15:24

The very proto ARPANET access.

15:28

And I already hated passwords then, all I had was passwords to mainframe computers on the UMass campus and I already hated how many freaking passwords I had to have.

15:40

And so I would say for years, "At some point somebody's going to put a chip in my thumb and that's the only dang thing I'm ever going to need."

15:47

And what we're talking about now with tokenization is really just the logical extension of that.

15:52

We're just saying, "Look, you don't even need to physically instantiate these things.

15:55

We've got the encryption down, we've got the technology down, we believe the global internet is strong enough to let these things be virtualized.

16:03

You don't need to put the chip in your thumb anymore."

16:06

Now there are lots of people still trying to put chips in people's thumbs and all that.

16:10

And I read an article yesterday about a guy who's trying to implant vaccine status chips in people, well, whatever. Yeah, sure.

16:17

People will still do that.

16:18

But there is something about this idea of having your identity not be you but be something you control.

16:26

This is my problem with biometrics is I don't really want to use biometrics for my identity, I understand why there's a level of certainty you get with it.

16:33

But I don't really want to scan my fingerprint every time I open up a computer or my phone or anything else or I don't really want it to scan my face because what if I'm dead?

16:43

What I really want is an interaction with some sort of virtual object that only I can control.

16:49

And that's really what tokenization does.

16:51

And when you extend the idea of, "Oh, tokens are just these virtual objects that you can put attributes against."

16:58

All of a sudden the world starts opening up a lot.

17:00

I did a bunch of work in 2003-ish, I did some consulting work for a computer security company of all things and got to do a lot of work with the Department of Defense on their CAC cards, which were their smart cards 15 years ago.

17:15

And there was a lot of development work going like, "What can we do with this?"

17:18

We now have this smart identity for every member of the DoD and all the contractors and everything else.

17:23

And that was the opening for them for a lot of those applications because it moved from, "Oh, I have a thing I can get in the door," to, "Oh, wait a minute.

17:33

This physical card, I have also gives me access to a SCIF.

17:37

And it also gives me access to a specific file and a specific computer system in that SCIF.

17:43

And, oh, by the way, because I used my CAC card to authenticate to that file, that file now knows this CAC card read that file."

17:50

So the tokenization happens on the other side too.

17:53

So those were some big aha moments and I honestly have no idea whether the NSA finished any of that stuff, none of that was classified.

17:59

But that's where the development was already going 15 years ago.

18:03

And when I look at what's going on now in the crypto space, that's when it gets really exciting.

18:09

The problem for me is 90% of the use cases I see, I still think are kind of silly and boring and I think that the more interesting stuff is yet to come.

18:17

I mean, talk to me when I can actually have an NFT that does something really useful for me, like let me pay for my Starbucks meal.

18:25

We're not even close to those things yet, these are really straightforward use cases of having a coupon or a prepaid account somewhere.

18:33

These are really basic use cases for identity and we're not even there.

18:36

Jim O'Shaughnessy: Yeah, I agree and think that, that use case, making them useful is like, "Come on. Let's get there."

18:47

I kind of enjoy watching the excitement though of- Dave Nadig: Yeah, for sure.

18:52

Jim O'Shaughnessy: Right?

18:53

So Infinite Loops, we sold our first NFT.

18:55

Dave Nadig: I know, I bid on it.

18:58

I knew I couldn't possibly afford it but I made sure I was the first God dang bid. I think I bid 0.

19:03

5 ETH or something on it. Jim O'Shaughnessy: Yeah.

19:07

But what's so cool about that is, you just learn so much more about it by doing it, right? Dave Nadig: Yeah.

19:15

Jim O'Shaughnessy: And we had a lot of fun doing it.

19:18

We're going to give the money to charity, I mean, the guy who bought it is actually going to give the slot on Infinite Loops to somebody who he thinks hasn't been able to break through yet but he thinks has a huge amount of potential.

19:34

I mean, the kindness implicit in that, it's just to me, I was like...

19:40

My wife was asking me about it and I'm like, "I think it kind of went as well as it possibly could have."

19:46

And so I- Dave Nadig: Yeah. Jim O'Shaughnessy: Go.

19:49

Dave Nadig: Your comment about the kindness in that community, that resonates really strongly with me.

19:54

Now, I say this also having a lot of evidence that the toxicity we see out of, I'll use the phrase, "Bro," I guess, around this.

20:03

There is a group of the crypto community, which has just been awful to a lot of the young women I know in this industry and they should all just go die in a fire and there're no excuses.

20:12

But in general, this has been an incredibly fun community to even be part of the edges of because it is kind and it's open and people put their ideas out there.

20:21

And this is a community, the crypto community in general, that understands execution is everything and the ideas are free.

20:30

And NFTs are the perfect example about that, it has nothing to do with what the art is, it has to do with the execution of your idea, of your project as the term goes.

20:39

And the people who are putting these projects together often have never met, they're sitting in Discord channels, chatting with each other, contributing their time to stuff they think is interesting.

20:50

That feels a lot like the early internet to me, that feels a lot like 1989, '90, '91, '92, which was...

20:57

I mean, it was not a bunch of standards, bodies then, it was great and everybody was just contributing openly, it was the beginning of the open-source movement a little bit later.

21:07

But it got co-opted so fast and that's why I wrote that article was, there is this tendency for these beautiful moments of creation to be just subsumed by capitalism so quickly.

21:20

Particularly America's version of capitalism, this is not necessarily the case where things develop outside the country.

21:26

And that's what concerns me, that's the part I want to put a finger in because I feel like, I know I can't move the needle, I can't change regulation and politics but if a couple of these projects can go down their paths, understanding that yeah, regulators are going to pay attention and this is what they're going to ask.

21:42

And oh yeah, there's a whole ecosystem over here that you've not even looked at yet but that's how money actually moves around.

21:48

You need to understand that.

21:50

So if I can do anything to help folks understand those things in some way maybe prevent that co-option of some of the beautiful ideas in here and then I'll die happy if I can just move the needle a little tiny bit there.

22:02

Jim O'Shaughnessy: Exactly.

22:04

I'm reading a book you might actually enjoy because it flips many of the ooh, bad capitalism memes on their head.

22:14

It's called The Genius of the Beast: A Radical Re-Vision of Capitalism by Howard Bloom.

22:22

And he essentially says in his introduction that, "Hey, you know all those things that the religions promised that you were going to be happy, that you were going to have a wonderful home, that you were going to have clean drinking water, you were going to have all that?

22:35

Oh yeah, that all got delivered by capitalism, and none by the religions, by the way."

22:41

The religions tended to ooh, like burning people upstate.

22:45

Dave Nadig: So you just opened a door there we got to walk through. Okay.

22:51

So if we're going to say that capitalism is the thing that has delivered on all of these promises, we have to bring it now...

22:57

I apologize to the audience, now we have to bring this back to Iain McGilchrist, and the piece you did with Tom Morgan, because what I would argue is that that is true.

23:05

If you define the expected outputs of religion as a laundry list of items that can be discreetly identified, that is very left brain thinking.

23:15

The very best part of Iain McGilchrist, 1500 word tomb, The Matter With Things is the chapter on paradoxes, which is like page 850, right in the middle.

23:27

He goes through this incredible Herman Melville on whales categorization of every paradox that screws up human brains.

23:37

And in each one of those, he breaks it down to the reason this seems like a paradox or an optical illusion, same thing is that your left brain is trying to parse something into discrete steps.

23:50

And your right brain is trying to think about this as a holism and they don't match.

23:55

Zeno's paradox is the very best one of these.

23:58

Because your left brain is saying, "Well, no, but I can divide it in half again. I can still get closer."

24:02

And your right brain is sitting here going, "Well, no, you're there."

24:05

And that's precisely the problem with thinking about capitalism and religion as somehow collections of humanly desirable outcomes like happiness.

24:14

Jim O'Shaughnessy: Oh, well, yeah.

24:16

I just did a thread on happiness.

24:18

I think personally that happiness is not a thing itself that can be achieved or sought.

24:23

I believe that it is a byproduct of other things.

24:27

In other words, to be happy, you can't just say, "Oh gee, I want to be happy."

24:34

It's a bit like people wanting to manifest things.

24:37

I just have to suit on my couch here and I'm going to be like a billionaire because I'm manifesting it.

24:43

No, no, that doesn't work.

24:46

Does the idea of premeditate things, thinking things through, uniting imbued intuition with the right or the left brain way of thinking?

24:58

Yeah, I think that does work, but it's like knowledge without action is futile, action without knowledge is foolish.

25:07

So the other reason, and I knew that was going to be your reaction, so I- Dave Nadig: You baited me you schmuck.

25:14

Jim O'Shaughnessy: I did. I did. I did.

25:17

Well, like Robert Anton Wilson says, if you think for just a moment, maybe I'm just a cosmic schmuck, you are for at least that little tiny moment, a little less of a cosmic schmuck. Dave Nadig: Oh my God.

25:33

Jim O'Shaughnessy: So what you're going to if you ever do read this book by Bloom, is he totally agrees with you. Dave Nadig: Okay, good.

25:40

Jim O'Shaughnessy: So for example, I've been reading a ton about complex adaptive learning systems and the insight that I'm sure you already know is trying to work with a complex adaptive system from the top down is a very left brained idea. And it doesn't work.

26:00

Complex adaptive systems are emergent behaviors come from below, not from- Dave Nadig: Well, what you just described is the current belief about neuroscience too.

26:07

I mean, the ultimate complex adaptive system is the human brain, and the balance that we're fighting right now in neuroscience is between those two models.

26:16

There's the reductive constructionist physicalist version of this, and then there's the much more holistic version of it.

26:24

And those things often seem like they're in direct scientific conflict, which is part of why I find it so interesting.

26:31

The idea that capitalism or the political system, or our modern culture are just expressions of our core genetic imperatives being rolled out to their natural conclusions.

26:42

That's almost a bit of an old saw at this point totally for people who read this kind of BS.

26:48

People have been talking about that quite a bit.

26:51

I think the part that I find most interesting is how much the problems are the same no matter where you look for the solutions.

27:00

What I mean by that is the problems with capitalism, the way you're describing this book, which I have not read and thinking about it as the solution to this laundry list of problems and that breaking things down narrowly versus thinking holistically.

27:15

The first time I started encountering those problems was when I got diagnosed with epilepsy 30 years ago, because that's how my neurologist started describing what was going on in my brain to me, this battle between the narrow physical, specific structure of my brain that they can point to and say, "Oh, on the MRI.

27:33

Well, that's screwed, sorry, Dave."

27:35

To, oh, and by the way, that's why when you have a seizure, you have time displacement as your aura, before you have a seizure.

27:44

So for 30 years I've been wrestling with this weird dichotomy.

27:47

And every time I approach a big complex problem, you end up running into the same issue.

27:54

It feels the same as it ever was.

27:57

Jim O'Shaughnessy: That is so fascinating.

27:58

And we've talked about this privately before, but I just made that connection because I was crippled with cluster headaches from age 22 through mid 40s.

28:11

And it had all of the same side effects, if you will, that you just described. Time [crosstalk].

28:17

Dave Nadig: Oh, it's the same thing.

28:18

Cluster headaches, migraines, epilepsy, some things that get diagnosed with psychological disorders, they're all fundamentally misfiring issues in your brain. Jim O'Shaughnessy: Yeah.

28:28

And the connection I'm exploring here as we're talking, I'd never actually thought about this and God, now you've given me my homework for the rest of the day.

28:39

I wonder if we look at people who are like us in that we just love ideas, we love going down rabbit holes, we love making connections and all that stuff.

28:53

I wonder what the hit rate would be on people having those types of various issues in their history.

29:03

Like the misfire [crosstalk].

29:04

Dave Nadig: Oh, I think it's very high.

29:05

My experience just completely anecdotally, how would you construct a study.

29:09

Jim O'Shaughnessy: Right and it was [crosstalk].

29:11

Dave Nadig: I have met people from both circles.

29:14

I mean, religion and things like that have been a big part of my life, raised Episcopalian.

29:19

I talked to the people who ask the more interesting questions in those kinds of environments, and they all seem to have some history with something medical, something mental health, or neurological of some sort.

29:31

And then you talk to people who are deeply into that part of it.

29:34

And they get philosophical pretty quickly too.

29:36

So you come to both ends of it.

29:38

And I think that's true, but ultimately not to get too Jed McKenna out of the box here, that comes down to everybody has their own private experience of reality.

29:47

And that's just, it works, mine is not yours, and that's what it is.

29:50

You are a fiction on the outside of my world and I'm a fiction on the outside of yours.

29:54

And so it makes sense to me that people who have alternate paths shown to them.

30:04

I haven't luckily had a seizure in years and years and years. Thank God.

30:08

But when I was having seizures on a fairly regular basis, it's just living with the Damocles that hangs over your head where there's a physical thing that will happen.

30:17

I'll be on the floor doing the floppy chicken at some point.

30:19

But I also know there's going to be this window where my entire understanding of reality is going to get flipped, that aura phase.

30:26

And anybody who's had migraines, even if you just have the simplest migraines where you just get that little visual effect that creeps into your...

30:35

That is enough for a lot of people to go, "Oh my God, I don't understand reality at all."

30:40

Jim O'Shaughnessy: Exactly. Exactly.

30:42

And, oh, man, this is going to be great.

30:45

You're going to have to come on after I do my homework and you do your homework.

30:51

This is cool because the ability I have found...

30:57

As you know, I work with a lot of people and try to help them look at the world a different way.

31:04

And many, many, many people are resistant to that for obvious and good reasons, by the way.

31:10

Like McKenna says, "The unexamined life is not worth living," said Socrates.

31:16

He goes, "Holy shit, man.

31:18

Just trying to examine that statement makes me terrified.

31:20

I don't know how I'm going to go on to life."

31:25

And so I think that this idea of being exposed to different forms of reality, and by the way, you're absolutely right. There is a ton of them.

31:38

Wilson called him reality tunnels, Adam Grant in his book calls him, or he's actually quoting a doctor who calls them reality goggles and William Blake, if the doors of perception were cleansed, we would see the world as it is, infinite. But then you are me.

31:58

And so I was talking to a friend the other day and he's like, "I used that quote from Blake."

32:03

And I'm like, "And by the way, did you know that that was because...

32:06

Do you know that Huxley used the term doors of prevention because he big fan of Blakes and Morrison was a big fan of Huxley.

32:16

And that's why he named his band, The Doors?" Dave Nadig: The Doors.

32:18

Yes, I've actually heard that story before, but it's- Jim O'Shaughnessy: So my wife is just like- Dave Nadig: Enough, no more rabbit hole.

32:26

Get back up here on the lawn, get out of that hole.

32:30

Jim O'Shaughnessy: Exactly. Dave Nadig: Yeah.

32:32

My wife does that to me about every three days.

32:33

Usually it's when another book that weighs eight pounds comes into the house.

32:36

Luckily I bought the last Iain McGilchrist's book on Kindle because I knew I was going to have to search in it, but otherwise I need another door to put a door stop in front of.

32:47

Jim O'Shaughnessy: Yeah, I'm going to have Tom write me a summary. So I'm going to cheat.

32:52

Dave Nadig: He did a pretty good one.

32:54

He did the thousand word one- Jim O'Shaughnessy: I know, it was good. Dave Nadig: ... which is pretty good.

32:58

But your point about doors of perception, that's a, meme would be the wrong world, but that's an idea that's been getting a lot of play lately.

33:06

This idea that how many exabytes of information coming in, and we only process like a Nintendo 64 or something that.

33:14

People have done various neurological things on that.

33:17

And that is just objective truth.

33:19

But the problem, I won't say problem, I'm going to guess you run into this a lot because you have these conversations openly with lots of people.

33:26

It's really easy to talk to people who immediately think you're being some woo woo newage person, me especially because I'm a child of hippies and most people know that and I'm pretty left to center, although I don't talk politics very often.

33:43

So people are just automatically assumed that I'm realigning my chakras every third minute.

33:48

And I'm super skeptical on that stuff.

33:50

I won't say I'm anti all of it, but if I read a book on chakras, I'm like, "Great, show me the neurological study, and help me understand the connection between something 3000 years old and 30 minutes old."

34:03

I'm not dismissing the stuff that's 3000 years old.

34:06

They didn't have functional MRI.

34:08

They didn't have pet scans.

34:12

But I do think connecting those dots is some of the most interesting stuff we can do because to your point, guys like us to some extent, if we add value to the world, it's our ability to make connections and to dissect things that are made of parts so that we can understand how those parts are reconnected.

34:28

Tom would say, it's synthesis, right? Jim O'Shaughnessy: Yep.

34:31

Dave Nadig: And you can't synthesize something if you don't understand how it was put together in the first place.

34:35

I feel that way about houses.

34:37

I feel that way about NFTs you talk about, like that's my experience, building my own NFTs too.

34:43

It's like if you don't get...

34:44

Bre Pettis, who was the founder of a company called MakerBot, part of the Maker Movement 20 years ago really probably has a great thing called The Cult of Done, which it's the Done Manifesto.

34:58

And one of the things that is Done Manifesto, which is on the wall of my office is that people without dirty hands are liars.

35:04

And I grew up on a farm, so I just genuinely believed that when somebody shows up...

35:08

Like when the vet shows up and looks at the horse and says, "Oh, that horse is lame," and they haven't bothered to look, then you know that they're liars.

35:16

When they go over there and they stick their hand up the you know what, and they say, "Oh, okay, this horse is lame," now you believe them because they've got dirty hands.

35:24

And I feel that way about everything.

35:26

And it's particularly challenging when you get to the stuff that bridges into this, I hate the word spiritual.

35:34

I just think of it all as cog sci, all cognitive science.

35:37

This is all just about what's going on in between my ear lobes, because we do not understand any of it.

35:43

And anybody you tell as you we understand any of it is just freaking lying out of their teeth.

35:48

Jim O'Shaughnessy: Absolutely or deluded.

35:49

Dave Nadig: Yeah, or deluded.

35:52

But the problem is if you put that out, that you take a guy that's like us who want to deconstruct, who want to understand and then you put something like human consciousness and experience in front of us.

36:02

Well, damn it, that's hard.

36:06

I can't just go mint an NFT for the human brain, that doesn't work. So what do you do?

36:12

You start reading the Bhagavad Gita, you start reading all The Vedas, you start digging into all this ancient wisdom.

36:18

And if you can do it with a level of skepticism and understanding of the cultural context, a lot of it makes a ton of sense.

36:24

I mean, one of my favorite books of all time is Wright's, Why Buddhism is True.

36:29

Jim O'Shaughnessy: Yeah, it's a great book.

36:31

Dave Nadig: Not because I'm a Buddhist.

36:32

But honestly, if anything, it convinced me not to be a Buddhist, and I've spent time sitting in Buddhist monastery.

36:38

I'm very attracted to Buddhism, particularly Zen Buddhism for lots of reasons.

36:43

But Why Buddhism is True, Robert Wright, I think is the author, what it does is it connects the dots to the lived experience of a modern human being in the real world who understands science, and making that bridge, I think was really valuable to me.

36:57

And what it showed me was as Jed says, "If you want to understand anything, sit down, shut up and ask yourself what's true until you know," and I really think it's just that simple.

37:07

Jim O'Shaughnessy: Oh, and I couldn't agree more.

37:09

Yeah, I was working on a thread.

37:11

So the fellow that I have up right now, Frederick Gieschen, I've been working with him on some things because he's a really curious character.

37:22

And so I sent him a piece that I've been working on about how to practice Wu Wei, the actionless activity, putting yourself in the center of the ebb and flow of- Dave Nadig: In the flow. Jim O'Shaughnessy: ... what's happening. Yeah, in the flow.

37:37

And so I told him, think of this as your own personal think boy piece because when I look at it and I even put it right in it, this just sounds so much woo woo man.

37:50

And I don't like woo woo.

37:55

And so that is the constant like...

37:57

And I'm usually pretty happy to publish almost anything.

38:02

It's like yeah, let's just think about it. Let's think about it.

38:05

But that is the paradox and I love paradoxes, but that's the paradox of trying to deeply understand something.

38:19

And I have this idea, so Frederick asked me, he was like, "Why don't you do all this stuff, man?"

38:26

And I said, "Well, honestly, pragmatism, when I was a kid is what drew me to LASU."

38:32

I mean, as weird as that sounds.

38:35

Dave Nadig: I probably read it when I was 12.

38:39

Jim O'Shaughnessy: Exactly.

38:40

And I've read it continually ever since, and all the other ones too, but the idea was very pragmatic.

38:47

If you're going to have knowledge, it should indicate what you should do, and it should be predictive in a way of speaking so that you can see your goggles maybe are, and that's the way I often to put it to people, "Listen, man, if you had a pair of glasses on right now and they were smudged up, you'd clean them."

39:10

Dave Nadig: You'd clean them.

39:12

Well, but the problem is that then you start...

39:14

I know you're a Tony De Mayo fan as well.

39:17

Like you start talking about things like awareness and awakening and enlightenment.

39:21

And honestly my eyes roll back in my head, even though this is precisely the crap that I'm spending a bunch of my personal time thinking about and working with and meditating and all this.

39:31

But I don't want to talk about it that way, because all I'm really trying to do is develop an operating manual for this carcass I have to pilot around for another 40 years.

39:39

That's all any of us are trying to do.

39:41

Jim O'Shaughnessy: Exactly.

39:43

HumanOS didn't come the most advanced thing, at least that we know of in the universe thus far is sitting right between- Dave Nadig: Oh God, I gave you a hook for HumanOS.

39:53

Oh, now we're never getting out.

39:56

Never getting out of this hole.

40:00

But yeah, I mean that the desire in Buddhism, they call it bodhicitta, the way seeking mind.

40:08

The idea that simply asking the questions is actually the activity, but that is the thing that one must do.

40:16

And the Dallas version of this, the Wu Wei, [inaudible] man's best water flows.

40:21

That's my favorite translation of that.

40:24

That is helpful, but I believe it personally very incomplete because that gives me a place to stand, but it doesn't tell me what to do then.

40:35

But then to me I mean, I'm starting from base principles.

40:39

I mean, just two minutes of personal narrative on this.

40:42

So beginning of the pandemic locked in like everybody else, rough time, figured some stuff out.

40:50

You and I talked about that and you've talked about it on the podcast, got through it.

40:53

November of 2020, I got super sick. Didn't get COVID.

40:58

I got bit by a tick because of a mutual friend, Dan Egan's terrible property in upstate New York.

41:03

And I got all the things one can get from a tick except Lyme disease and was just flat on my back for two and a half weeks in the middle of the pandemic.

41:10

I'm in and out of the hospital, in mask, getting COVID tested twice a day, doing MRIs and CT scans and lumbar punctures and all this stuff in the midst of COVID, it was horrible.

41:21

But at the end of all of it, they still don't know what's wrong with me, so I come home and I'm in two weeks of isolation.

41:27

So in my house, because we had a huge bunch of people, two weeks in isolation meant that I spent two weeks in my bedroom by myself, period.

41:34

Feverish, 103 fever for most of it.

41:37

So trapped in that environment, I wasn't really able to read.

41:41

I wasn't really able to...

41:42

I certainly didn't want to sit around and watch television.

41:44

So I did a lot of freaking lying on my back and staring at the white ceiling, which sounds an awful lot like the beginnings of a meditation practice.

41:51

So that's where it started for me was literally being in this incredibly dark, quiet place, dark emotionally, physically, and being in that position of staring at a wall for two weeks questioning my own mortality.

42:06

And from that, I just started from a...

42:09

I did what I do with any other project where I go down the rabbit hole was I started and this was before I was reading any of this stuff, I started with, okay, what do I know, what do I believe?

42:19

I hadn't read Jed McKenna yet, so it wasn't quite spiritual autolysis, but I just started asking what do I believe?

42:26

Of my own religious beliefs, my own beliefs about epistemology and everything else, and realized I didn't know anything at all. Absolutely nothing.

42:34

I actually had no basis for grounding.

42:36

So I started focusing on stuff I've learned from epilepsy.

42:40

And I used to get quite dramatic visual hallucinations for my auras.

42:45

And so I started, okay, what do I know about vision?

42:47

Like start with the most important sense, the one that takes most of my brain.

42:53

And I spent a year basically trying to understand, okay, from a meditative perspective, what does vision mean?

42:59

So I went through all the different visual meditations, the Hawaiian open awareness meditation and casino meditation, and staring at the candles.

43:07

Not because I'm a believer in any of this, because I'm a huge skeptic, and I just wanted to see what was on the other side.

43:12

And honestly, from there, I think that just opens the doorway to realizing how little you know about any of it.

43:19

But the key thing is that parts of it are knowable at least personal level.

43:23

If you take the time to do those things, and I think this is a really universal experience and I don't think it has anything to do with spirituality.

43:29

I think this has to do with the physical bodies that we live in and the neurological systems that connect them.

43:36

I mean, I think about this an epilepsy patient, right? Jim O'Shaughnessy: Sure.

43:39

Dave Nadig: And because of that, I think you can, if you want to, if curious enough, you can do things like change physically how you see the world.

43:48

My favorite one, Jed talks about this a little bit.

43:52

I'm not going to get the reference.

43:53

Do the guy who does The Headless Way? The British guy?

43:55

Jim O'Shaughnessy: Yeah, yeah. Yeah.

43:58

Dave Nadig: He goes deep.

43:59

Like all of his stuff is about vision.

44:00

So I went down that rabbit hole real early.

44:03

This isn't spiritual stuff.

44:05

This is about showing you why your brain is lying to you about what you see all the time.

44:10

And I think that is to me, a foundational practice.

44:14

I've been trying to teach my kids this as well.

44:18

If you can't learn how to stare at something for 10 minutes, then you have no control over your body.

44:24

Literally something as simple as that.

44:25

Pick one object, find a quiet room, stare at it for 10 minutes.

44:29

99% of the people I talk to either have never done that or have tried and can't.

44:34

Jim O'Shaughnessy: Boy, again, it seems like we are making the journey together because...

44:40

I do that all the time because you need to, you have to if you have to learn how to quiet your chitter chatter, so to speak.

44:53

Sensory deprivation tanks.

44:54

I was one of the first ones in those.

44:56

Dave Nadig: Oh, I love them since 1987, UMass Amherst.

45:00

Jim O'Shaughnessy: Yeah, baby.

45:02

They used to call them Lily Tang, so after the guy who invented it. Dave Nadig: Yep.

45:07

And it's right about when Altered States came out too.

45:09

So everybody was tripping. Yeah. It's crazy.

45:12

Jim O'Shaughnessy: Exactly, exactly. Tripping balls, man. Dave Nadig: Yeah.

45:15

Jim O'Shaughnessy: But Dorothy Parker who had this really unfortunate life, she was an alcoholic, she was extraordinarily depressed.

45:22

She was one of the wittiest women ever to live. She was hysterical.

45:27

Like when she had liver failure and the doctors who would come in and they'd say, "Ms.

45:27

Parker, if you don't stop drinking, you're going to die in six months."

45:35

And she would look at the doctor and say, "Promises, promises."

45:40

But the point is that curiosity, I almost think there might be a gene involved.

45:52

I don't know because there's no cure for it.

45:56

And if you are incredibly curious, what I think that leads to, because of all the people that I've spoken with, who I identify as extraordinarily curious, is it leads ultimately to going, "Holy fuck I don't know anything."

46:13

Dave Nadig: I think I actually don't think it's genetic, I think it's human and I think we kill it as a culture as fast as we can.

46:21

Jim O'Shaughnessy: Oh, no doubt. No doubt.

46:25

Dave Nadig: I think curiosity is the fundamental human genetic survival trait.

46:31

I think it's the reason that we continue to exist.

46:34

I can't remember her name, I'm sorry. I just read her book.

46:36

But you heard the woman on talking about...

46:38

At one point she was talking about the Amygdala and how this was just three weeks ago, and how for years we thought that was the fear center.

46:47

And what it actually is, is the wait a minute, something's new center. Right?

46:51

Jim O'Shaughnessy: Right.

46:52

Dave Nadig: And a lot of times that's fear because usually that's a tiger.

46:54

But in the modern world, the idea that somehow we're afraid of that center of our being, because with curiosity comes fear, when I listened to her talk about that, that was an aha moment.

47:06

And in her book, there's a bunch more that comes out of that, and she talks about training military on mindfulness techniques.

47:13

This is where the woo woo thing breaks down.

47:15

She talks about shopping for a base anywhere in the country that would let her do this work with soldiers, and lo and behold, just enormous amounts of success from people spending 10 minutes staring at a wall.

47:28

It is that simple, so I highly recommended it.

47:32

Jim O'Shaughnessy: Yeah, that's Lisa Barrett. I think you're...

47:35

Dave Nadig: Sorry, Lisa Barrett. Yes, sorry, apologies. Great episode.

47:38

Jim O'Shaughnessy: Thank you.

47:39

And I always try to have people on, that have really different points of view because I haven't done it myself because I'm lazy, but I sometimes give advice to especially younger people who are trying, they honestly are trying, because I have a fundamental belief that I can't change you. I cannot change Dave. Right?

48:02

I can be around, I can give you an idea, you can give me ideas, but ultimately you are the boss of you.

48:09

And it's not mom and dad, it's not the government, it's not the church, it's not your family, it's you.

48:17

And that terrifies a lot of people.

48:19

Dave Nadig: There's some truth in solipsism and it's not a happy truth.

48:22

Jim O'Shaughnessy: No, it's not.

48:24

And one of the things that I often recommend is okay, you know what, go live another life and here's how you can do it.

48:31

Start an account on Twitter and only follow people whose either ideology or beliefs or habits, or what they think is fun, you hate. Dave Nadig: Oh, really? Jim O'Shaughnessy: Yeah.

48:45

Dave Nadig: I want to challenge that one, but go ahead. Jim O'Shaughnessy: Okay.

48:49

So, the only reason for the exercise is for them to...

48:54

It's a shock treatment, right? Dave Nadig: Sure.

48:57

Jim O'Shaughnessy: And the only reason for the exercise and I don't recommend they do it for very long.

49:03

But the entire exercise is only for them to get that, and they usually by the way get it in the first couple hours, that holy shit.

49:16

The exercise is to show them that every single human being on this planet has reality goggles on. Dave Nadig: Yeah.

49:26

So for that purpose, I'll accept it. Look, I do that too.

49:31

And I think that just as a citizen of the world, understanding where your biases are is really important and Tom spent a lot of time on that and great sites like Ground News are really good at sort of showing you the stuff you're not seeing because you only read Democrat gleaming publications, or Republican, whatever.

49:48

So there's real value in that.

49:51

But the flip side of that is that I found over the last four or five years personally, that the more I did that on a consistent basis, the harder I found it to find a quiet place to stand, to actually do anything, because it's so hard to tamp down the emotions that are...

50:10

Because if you do that, if you set up your fake Twitter account and follow different people, or you just start reading a news source you detest because you want to understand that side of the argument, yes, you will shake your cognitive biases, but you're also going to make your day-to-day life pretty miserable because you're going to live in that conflict a lot.

50:27

And I made a really conscious decision to turn that into an activity, not a way of being.

50:32

I make a time in my calendar to spend 30 minutes going and getting some of that stuff, and then I read it and then I let it go, because it's really easy to get caught up in it.

50:42

And if you look at a lot of Twitter, you see the people who are straddling.

50:46

And sometimes great stuff happens.

50:48

I know there's a lot of very rational folks out there who are very angry at everybody on both sides of every issue right now, and that anger is justified and the skepticism is justified and I'm not trying to argue for the status quo at all.

51:03

I just don't personally think I can move the needle in that arena, so I choose not to play.

51:07

Jim O'Shaughnessy: And I agree with that, but as an exercise, as a first step. Dave Nadig: 100%.

51:17

It's the gorilla story, right?

51:18

I mean, this is the attention thing, right, which is another whole great rabbit hole that we should go down.

51:25

But it's fundamentally the same thing, right?

51:28

Attention is simply our core cognitive power. That's how I believe it.

51:31

Because it's the one thing we actually get to control all the time, it's what we're paying attention to.

51:37

And Wilson makes great use of this throughout his books honestly, about people not seeing what's going on around them.

51:46

It's a pretty heavily used comic trope for rather [crosstalk].

51:50

Jim O'Shaughnessy: But also, I was a magician when I was a teenager.

51:53

Dave Nadig: Of course, you were.

51:54

Jim O'Shaughnessy: A real one.

51:55

I got actually paid to do it.

52:02

And I studied with a master magician, illusionist.

52:04

Dave Nadig: You still do tricks for your grandkids?

52:07

Jim O'Shaughnessy: Yes, I do.

52:08

Dave Nadig: Of course you do.

52:11

Jim O'Shaughnessy: And it's fun, but it was wonderful training because like Derren Brown, I love Derren Brown. I just... Dave Nadig: Absolutely.

52:22

Oh my God, huge Derren Brown fan. Right?

52:24

Jim O'Shaughnessy: Yeah, as am I.

52:24

And I found his book Happiness, and I'm like, "I should read that," because I usually have been reading him about all of the effects that people can have on one another, placebo effect, things like that, things that are really interesting.

52:40

So I start reading the book and I'm like, "Holy shit, this guy is incredibly erudite, number one."

52:46

I think he does a better job on explaining the stoics to a new generation better than anyone I've seen write about them.

52:57

You and I have both read the source material, right?

53:01

But back to your original point at the beginning of the podcast, every generation is recreating everything.

53:09

But, as I'm reading it, I'm like, "Of course he's what he is. Of course, he is."

53:15

Dave Nadig: Yeah, because that's his trained skillset, right?

53:18

Jim O'Shaughnessy: Exactly.

53:19

Dave Nadig: He spent his entire life learning how to manipulate this two-inch code of visual attention.

53:24

Of course, he's going to think a little bit differently.

53:26

Jim O'Shaughnessy: Exactly.

53:27

Dave Nadig: But to that point where you talk about him reintroducing the stoics into a new audience, I know a lot of folks my age, who I talk to about all these intellectual BS things we talk about who get really kind of fired up about, "Well, kids don't read the classics anymore." And look, I get it.

53:46

I made my kids read Homer too. I get it. It's important stuff.

53:51

But by the same token, if you ask me to say, "Oh, this person really needs to understand what the Gita is saying, the Bhagavad Gita is saying."

54:00

There's some great wisdom there.

54:02

Here are your two options.

54:04

Send them the best translation of the entire thing you can find or send them the one chapter from Jed McKenna's book, where he rips apart a Bhagavad Gita study club.

54:13

The latter is so much better for most people.

54:15

Jim O'Shaughnessy: Totally agree.

54:16

Dave Nadig: And if they're like totally hooked after that and they want to go read the source material, that's fine.

54:22

But if what they want is to understand why people are still reading it, that's where you go. But that's fine.

54:30

I'm fine with the fact that if I hand that to somebody and that's all they ever read of it, great.

54:36

Because they've read something...

54:37

And I feel like that's just okay. I don't feel like...

54:42

Every year as much content is being created effectively as existed in the previous 10. Right?

54:48

We're just in this incredible ramp in terms of volume.

54:50

So the idea that somehow there is one cannon of anything, knowledge, music, blues, violinists, whatever that is the path of human history through a topic or a subject or an activity is ridiculous on the face of it.

55:05

So, if people's only exposure to classical music is that they saw Yo-Yo Ma play at the presidents' inauguration, okay, better than nothing. He's still a genius. Right? And if that inspires...

55:19

But don't diss somebody because they like Yo-Yo Ma.

55:22

Jim O'Shaughnessy: Well, and as you're talking about Jed, I love that.

55:28

I hadn't thought about it that way.

55:31

And I love the one line from Jed, knowledge that destroys knowledge.

55:36

And people get worked up, especially older people.

55:43

I'll talk to lifelong friends, they have been friends since we were literally in grade school together.

55:50

And the odd thing is, the longer term friendship that I have with somebody, the more they easily understand why I am the way I am right now.

56:00

Dave Nadig: Well, we are all just the products of our actions at the end, aren't we? Right?

56:06

Thoughts, words, and deeds, it's all we can do.

56:08

Jim O'Shaughnessy: Right. Exactly right. That's all we can do.

56:12

And so many people just think that that's not enough.

56:15

And I'm like, "Not enough? Are you kidding me?"

56:19

If you can move the needle just a scooch, just a little bit, that's an amazing achievement.

56:27

And simple things like every time I take a hot shower, which is every day, I say thank you to the universe because I realized that in the scope of all humans who have ever lived, the ones who can reliably turn on...

56:43

Dave Nadig: Get a hot shower.

56:44

Jim O'Shaughnessy: That is hot?

56:46

We've won the fucking cosmic lottery.

56:48

Dave Nadig: You're in the top 0.

56:48

00001% of humans who've existed.

56:53

Jim O'Shaughnessy: Exactly.

56:55

And I just get excited by the progress of ideas. Are they all good? Of course not.

57:05

I recommend Deutsche's The Beginning of Infinity all the time.

57:10

But it's so great because he builds a really excellent framework for how to think about things in a certain way. Right?

57:20

Why optimism is better than pessimism in my opinion.

57:23

I'm not going to make a decree.

57:27

Your statement of just a few minutes ago. I totally agree with. Why is it wrong?

57:33

So I was the chairman of the Chamber Music Society of Lincoln Center.

57:36

Dave Nadig: You're a huge music fan.

57:37

Jim O'Shaughnessy: I love it.

57:39

But I also love Journey To The Center of The Mind by the Amboy Dukes. Right?

57:44

I can't think of a music moment, I'm not a big country fan, but other than that...

57:49

Dave Nadig: You were pretty lined up there and I'm about 10% on hip hop, but for the most part, I think we're aligned there.

57:57

I tend to lean more towards punk rock than classical music, but I think we're probably pretty close otherwise.

58:01

Jim O'Shaughnessy: I also love punk rock.

58:02

Dave Nadig: But music is another one where most of the people in my generation that I know who still love music are still osified.

58:10

They are captive to what they listened to when they were 17 to 25.

58:16

Which is understandable, because, that's the most emotional aggressive part of your life.

58:20

You lay down all sorts of imprints at that point.

58:23

Hopefully you unlearn some of them later in life, but I'm shocked at how many people I know who love music, who don't listen to new music, because we're just in a...

58:33

And it's understandable again because of the volume that's there.

58:38

If you just look at the raw release radar on Spotify every day, it's thousands of new songs every day and they're remixes and remasters and re-issues but they're also just all of these kids putting out incredible music.

58:53

And the finds that are out there, the boundaries that are getting pushed that aren't even getting noticed are just amazing.

59:01

And it's hard to open yourself up to that much stuff.

59:04

To your point about going and setting a fake Twitter account and following people you hate, opening yourself up to that kind of stuff is hard and it gets harder and harder and harder, the older I get.

59:16

And so I'm just pushing harder and harder against that.

59:18

Jim O'Shaughnessy: Back when we still had CDs, what I used to do is I would go into a tower records and buy 50 CDs at random, truly at random.

59:30

And I just made sure that I was in different sections of the music.

59:35

That's how I discovered techno when it was still called European new beat.

59:41

I also think of guys like Eminem, a lot of the rappers man, a 100 years ago, they would've been Walt Whitman's best friend, because they're poets as you kind of go through this whole thing.

59:56

And so I always kind of tried to train myself in ways, like buying things at random and try to figure them out.

1:00:07

We are having too much fun and I want to get back to some actual...

1:00:12

Because you are really, really bright on all this stuff and so we got to share some wisdom.

1:00:18

Let's get back to the metaverse. Dave Nadig: Sure.

1:00:22

Jim O'Shaughnessy: How it's affecting artists, how it's affecting traders.

1:00:26

You had a great line in your piece.

1:00:27

It was like, a lot of people are spending most of their time under a helmet. I loved that metaphor. Please elaborate. Dave Nadig: Right here.

1:00:38

So the metaverse is real and for people who are listening, I'm holding up a valve index headset, which is literally hooked on the side of my desk.

1:00:44

Which to be honest, I actually do work under sometimes.

1:00:47

I know quite a few traders that like the number of Bloomberg screens you can put up in a valve index is shocking.

1:00:53

Because you can go 360 degrees, man.

1:00:57

Everything's up all the time.

1:00:58

So, there's real use case stuff for it too.

1:01:06

And I'll just reiterate it to sort of set the stage here.

1:01:10

My biggest fear is that because most of the big things we want to do are going to require a lot of money, especially if we want them to happen quickly, which we're American so we want everything yesterday.

1:01:21

That means that every time those little micro decisions about, well, if we did it this way it would be better but if we did it this way, it'll be faster and we'll make more money.

1:01:30

We know which way those decisions get made every single time.

1:01:34

And that's frankly how we ended up with web 2. 0.

1:01:36

So what I'm trying to figure out is how do we push back so that we start encodifying some of the things we actually believe about web three that are great.

1:01:46

The idea of artists actually controlling the redistribution of their works.

1:01:51

I think that's fantastic.

1:01:53

Almost nothing that's going on in NFTs is actually doing that, but the tech is under the hood.

1:01:59

And so, for all of the degenerate NFT trading that's going on, the stuff to me that's really interesting are things like the ERC 1177.

1:02:08

I think it is resale rights clauses, which sound great and have huge technical problems.

1:02:15

So let's dig into those technical problems and solve them.

1:02:17

I'm not trying to dismiss any of these. I'm saying great.

1:02:20

You made a first step here at allowing an artist to attach themselves to a work of art and follow it around. That's incredible.

1:02:29

That's a phenomenal innovation.

1:02:31

Now let's build an ecosystem that actually lets you do it because right now it doesn't.

1:02:36

I could go ahead and sell an NFT of my song, but it doesn't help you at Spotify.

1:02:41

It doesn't help you anywhere else in the ecosystem.

1:02:44

I can't use it on YouTube without a getting a copyright flag, right?

1:02:47

So we haven't actually built any ecosystems that are going to help these things work.

1:02:51

What we've done is put a technology stack, way out front and then ask capitalists to catch up.

1:02:57

And, if we don't put the boundaries in place between here and there, we're going to be right where we are with net neutrality which to be blunt, it's not good.

1:03:04

It's bad for anybody working on epistemology.

1:03:09

So not good, therefore bad.

1:03:13

I'm missing that initial round of breaks that got put on the internet by well-meaning nerds, guys on standards committees, guys fighting for something to be a certain way.

1:03:25

It eventually all got co-opted, but we got a good 15-year run out of it.

1:03:29

I'd love that to happen with the metaverse.

1:03:31

I'd love a 15-year run of people really making all of these technologies work, the VR stuff, the interoperability stuff, the embedded commerce, the embedded IP stuff, the identity is wallet.

1:03:42

All those are great ideas.

1:03:43

I want a 15-year run where it's not all owned by freaking Facebook and Google.

1:03:48

Jim O'Shaughnessy: My friend, Alex Danco has written extensively about this and he talks about why everybody needs to be a builder, why you've got to jump into the metaverse, how to create a [snowing] point.

1:04:05

And it's practical stuff that I hope helps people who are in the field like, "Oh, I didn't think about it that way, I got to try it."

1:04:12

because I agree on the point of right now it seems very siloed, right? To your point.

1:04:19

Even if I have the greatest song in the world, let's say I'm a musician.

1:04:24

And I had the greatest song in the world and I create it as an NFT, what happens? Nothing, right?

1:04:33

The value is in the network pretty much and always has been in the network.

1:04:40

That's why for all of its silliness, I still believe that Twitter has the ability to eventually emerge as the first continuously updated global intelligence network.

1:04:51

And that's all about curation and it's all about, it's how we became friends.

1:04:55

It's all about having the right network.

1:04:59

And the siloing is a problem that we do need to like figure out.

1:05:05

Wouldn't it be great if my NFT started blowing up and then Toby at Spotify is like, "Oh, I like that.

1:05:15

Let's see what we can do here." And we...

1:05:18

Dave Nadig: Yeah, I just don't think...

1:05:20

The missing piece here is folks trying to solve this problem, not for the capital, but for the creator.

1:05:30

Let me give you an example of one of 50 whiteboard ideas I had around this music thing.

1:05:36

I'm a big fan of Amanda Palmer.

1:05:38

I don't know whether you know her work.

1:05:39

She was dressed in dolls, sort of semi-punk musician, quasi performance artist, somewhat local lives in upstate New York, was married to Neil Gaiman so they used to perform around here all the time.

1:05:50

We're big fans, both of them.

1:05:51

She put out a book called The Art of Asking, which was sort of in the beginning of the Patreon and Kickstarter movement, where you know this idea that you put your idea out there, you get a thousand people to give you a hundred bucks and all of a sudden you're in business.

1:06:04

And she really digs into why culturally that's so hard for people.

1:06:08

The technology that's being built in web 3.

1:06:08

0 is just perfectly built for this and I've seen almost no examples of it.

1:06:14

The constitution DAO project is probably the one that was the most interesting, because that was silly.

1:06:20

There was never a capitalist purpose to it.

1:06:23

It would be really cool if I was part of an organization that just bought a freaking copy of the constitution, figured out a place to put it and then started educating people about what it was and what it wasn't and what...

1:06:34

I'm a big Patriot, I'm a big fan of the American experiment as much as it's off the rails.

1:06:39

I thought that was a great idea, I gave them a bunch of money.

1:06:43

Now it didn't work, but that's a really cool idea that created a community of people who were giving money to something, not with the hope of making more money later or anything like that, but because they had a common goal, a common idea of doing something.

1:06:56

The idea of taking what Amanda Palmer does at the Patreon sort of support an artist level and baking that into those things, that to me is interesting, right?

1:07:04

If you told me right now that, like, I'm a huge fan of this guy named Carles who's a DJ from the early 2000's, ran a site called Hipster Runoff disappeared from the internet, runs one radio show a week on SiriusXM and you have to listen live basically, that's it.

1:07:21

And he's my favorite DJ of all of time.

1:07:23

If that dude put out an NFT that said, "Hey, I'm going to sell a thousand of these things.

1:07:28

If you own this NFT, you get to show up at my website and I'll do another episode for you once a week."

1:07:33

I would give him a significant amount of money for that. Right?

1:07:36

As a membership token NFT, which is an idea that people have out there.

1:07:40

The problem is what we've done is create membership token ideas without ever asking Carles or anybody else to be part of the process.

1:07:48

The [board] API club is the perfect example of this.

1:07:50

This incredibly exclusive 10,000 person club be made mostly out of millionaires at this point that have membership in a club that nobody has any idea what the club is, except that it costs a lot of money to join it.

1:08:03

It's like the worst kind of club in New York city to go have dinner.

1:08:05

It's like the opposite of where you go in New York.

1:08:08

It's like going to a place where the only thing you know about everybody who's there is they have too much money.

1:08:13

I don't want to go to that club.

1:08:15

Jim O'Shaughnessy: Neither do I.

1:08:17

Dave Nadig: But the idea of an artist building their own community around that and using the NFT as the sort of perpetually usable token for that, I find that interesting.

1:08:29

And I just don't see enough of that happening yet.

1:08:30

So that's why I want to push. Jim O'Shaughnessy: Yeah.

1:08:32

As do I, and it brings up again, you should probably read this book by Bloom because that's what he's talking about.

1:08:41

He's talking about what really fires up all of our innovations, all of our movements forward is our imaginations, is our desires, is our seeking beauty, loving music, doing all that kind of stuff.

1:09:03

That's what pushes the ball.

1:09:05

And, I'm more like, you I'm really cynical about certain, like when somebody says something and I'm like, that's bullshit.

1:09:15

He is thoroughly footnoting everything, right?

1:09:18

In one of his earlier books I read, he'd said something outrageous, like babies have 10 billion, more neurons than we do.

1:09:24

I'm like, that's bullshitting. He's got a footnote. I look at the footnote. Oh, okay. Pretty much.

1:09:30

But then I have Eric Hodel who's a researcher in consciousness, PhD in neuroscience.

1:09:34

And I went, "Hey, will you confirm something for me?

1:09:38

Do babies really have that many more neurons?" And he goes, "Oh yeah." Dave Nadig: Yeah.

1:09:45

There is a class of writer out there that I'm privileged to be able to read.

1:09:51

He's one of them, [imego] Chris is another one. Oh my God. Talk about footnotes. Good Lord.

1:09:56

He makes David Foster Wallace look like a napkin writer. But that to me is...

1:10:02

Those kinds of writers for guys who really want to jump in the rabbit hole, those are the most valuable people in the world, which is part of the reason I now buy all that stuff on Kindle because I never remember when those things get mentioned and I've got to be able to search them.

1:10:14

I don't have the memory for it anymore.

1:10:15

Jim O'Shaughnessy: The other thing that you brought up though, that I think is kind of cool.

1:10:19

So, I support a young guy, he's probably 23.

1:10:22

He's an artist here in New York and he is the son of a woman, a designer we've worked with for many, many years. They're British.

1:10:32

And anyway, we met in New York and I looked at his art, I think he's amazingly talented.

1:10:39

And so anyway, I hear from him during the pandemic and he is like, the thing he's doing is a charitable foundation, which is essentially a communal art space on 20th and fifth avenue in New York City, really cool space, loft space and everything.

1:11:01

So he said, "Can I come out and talk to you about it?" I'm like, "Yeah, sure."

1:11:05

So I start, like anyone, looking for, searching for it on the internet... nothing. So I go to Instagram. Okay.

1:11:15

Doesn't have an Instagram account. Okay. So I go to Facebook.

1:11:19

He's 24, I can't believe he'd be on Facebook.

1:11:22

No, he's not on Facebook.

1:11:23

He has no digital footprint.

1:11:27

And so he gets here and I'm like...

1:11:27

the first question I ask him is, "Man, what the fuck?"

1:11:31

Dave Nadig: "Who even are you?" Jim O'Shaughnessy: Yeah. And he goes, "Exactly."

1:11:39

He goes, "We are doing our project for the ultimate, you have to be there." Dave Nadig: Oh my gosh. I kind of like that. That's kind of fun.

1:11:50

Jim O'Shaughnessy: Like you, I'm like, "Ooh, that sounds like my youth, but you go on."

1:11:58

And so they had their first show, six artists were showing.

1:12:03

The only way that anyone could find out, it's that area for people not familiar with New York City, Union Square is right there, NYU is there.

1:12:13

So lots of students down there, it's a really cool part of Manhattan.

1:12:16

And anyway, so they left little physical flyers at places that students, others go, and everything became word of mouth.

1:12:31

And I said, "Well, so what happened?"

1:12:32

And he's like, "200 people came.

1:12:35

Everyone was on their cell phones saying, 'No, I can't show you.

1:12:41

I can't send you got to come here.'" Right.

1:12:47

And so I'm like, "I love it.

1:12:49

But okay, move me on now. What's going to happen?"

1:12:52

And that's exactly what they're going to do, Dave.

1:12:58

Like I think his first thing is going to be a 100, it's going to be limited to the first 100 are going to be able to share this art, but also it comes with access.

1:13:10

There's going to be shows just for the owners of that NFT.

1:13:15

I just found it really interesting in the terms of, "I see," because we talked about it a lot.

1:13:22

I said, "Is this like something I'm missing?

1:13:23

Is this a new thing among younger people?" Dave Nadig: Yeah.

1:13:27

So the counter internet revolution is a real thing.

1:13:31

My son, not to speak to out of school about him, but he's 17, almost 18 heading off to college, no social media whatsoever.

1:13:39

He just wiped it out of his life two years ago.

1:13:42

Not on my prompting whatsoever.

1:13:43

We had, obviously you can imagine in our house, lots of conversations about the evils of the TikTok algorithm, et cetera, around the dinner table.

1:13:50

Like my kids, I'm not recommending this as a parenting technique, but my kids grew up fairly feral, very few rules, but the ones we had were enforced with absolute authority.

1:14:02

And that's how I grew up too; I was a child, the hippies, living in the middle of the woods.

1:14:05

So I mean, that's kind of what it is. So very free range kids. There was never a rule.

1:14:10

There was never a "you can't have an Instagram account" or "we need to be copied on all your social media".

1:14:15

And I know for some parents, that's how it works for them, but for us, wildly unfettered.

1:14:21

And both kids basically came to their own conclusion in their teenage years that "no, no, no, this stuff is awful".

1:14:27

So they pick the one place that they know they can get...

1:14:30

they'll pick their avenue to talk to their friends.

1:14:32

So whether it's text messaging or a Signal group or whatever it is.

1:14:36

But you know; no Twitter, no Instagram, no Facebook, none of it. No TikTok.

1:14:42

And it is, very genuinely, a movement.

1:14:46

I think it was right before I saw you last, I had spent a bunch of time at a monastery as part of a beginner's group. Jim O'Shaughnessy: Yeah.

1:14:55

Dave Nadig: It was all Gen Z. Like it was all young.

1:14:59

It was 20 year olds, 21 year olds, the whole thing.

1:15:02

And Tom Morgan talks about this too.

1:15:05

The natural reaction to the over dominance of this sort of left brain, hyper narrow, hyper capitalist world is going to be a rejection of that.

1:15:13

And people seeking a wholeness, right?

1:15:15

And not in a touchy, feely kind of way; in a cognitive way, an understanding way.

1:15:22

And so of course they're going to be drawn into all of the weird cog-sci stuff we talk about, right?

1:15:27

Because where else are they going to find that?

1:15:29

And I'm like, "The only problem I have, is the one that Jed McKenna brings up, which is that the spiritual industrial complex is shooting a whole generation in the foot, if you will."

1:15:41

Because how many Republican voting folks in Texas do you think are showing up at their Bikram Yoga and meditation class.

1:15:49

Some, to be clear I'm way over stereotyping here- Jim O'Shaughnessy: Right sure.

1:15:53

Dave Nadig: But I'm just saying in bluer than blue, upstate New England, this stuff is endemic.

1:15:59

When I travel to other parts of the country, it is seen as weird, and freakish, and left wing, and hippie.

1:16:06

And that's a problem, honestly, which is why your guests couldn't get the military to realize, "Hey, 10 minutes a day, we can train Marines to sleep anywhere." That's a valuable skill.

1:16:15

Jim O'Shaughnessy: Totally agree.

1:16:17

And when I was still the Principal, Sales Portfolio Manager for OSAM, when I left here, I always said to my wife, "I'm going to Real America."

1:16:30

Because when you live around here you're in this little portion of America- Dave Nadig: Oh, it's a bubble.

1:16:39

Jim O'Shaughnessy: It's a total bubble.

1:16:42

And so I personally loved my trips to Real America because it was like, "Wow, okay."

1:16:50

So my entire way of processing things and thinking about things and all that, maybe I need to think about the way these people process things.

1:17:00

Dave Nadig: How has that changed in the pandemic?

1:17:03

Because I'm just thinking about this now, like a huge part of my life used to be travel.

1:17:07

[crosstalk] I was on the road 40 weeks a year doing the Conference Circuit and then pandemic hit and that just stopped.

1:17:13

So two years, like this has been the...

1:17:15

I mean, I've done some trips to New York and things, but I'm not one of those people who just traveled their way through, which I know some people have and God bless them, I'm jealous.

1:17:21

But it's not where I've been at.

1:17:23

And so my world is now limited to those people who I either get on screen, happen to meet in New York once in a while, or stumble across.

1:17:32

I feel like my worldview must necessarily be collapsing in an interesting way. What are your thoughts?

1:17:39

Jim O'Shaughnessy: Actually I've had the opposite experience.

1:17:43

Because of the pandemic I had decided around 2014, 2015, that traditional media was dying, and I still owe and will always give chops to CNBC.

1:17:59

They help make my career, and for that I am eternally grateful.

1:18:05

But I saw it unfolding in a way that I thought was not great.

1:18:12

When I was the co-host of Squawk Box, like every other week with Mark Haines, we had three hours.

1:18:18

If you would come on as a guest, you would have 20 minutes.

1:18:21

To tell us about this really cool- Dave Nadig: Now it's two.

1:18:25

Jim O'Shaughnessy: [crosstalk]. Exactly.

1:18:27

And so it's like ESPN sports, they ESPN'd it.

1:18:32

And so I had left the at world and started to figure out the social media world.

1:18:39

And one of the things that I always started to do when I was still traveling and going everywhere was like, "Oh, I really should get to know person X." Well, guess what?

1:18:50

I was stuck just like you were in my house. And so I just started. Dave Nadig: Yeah. So I think that's fair.

1:18:56

I did a fair amount of that as well, to me it was largely self-defense because otherwise I would stare at a screen all day with no one to talk to, right?

1:19:02

Jim O'Shaughnessy: Right.

1:19:03

Dave Nadig: Because I'm not going to an office.

1:19:04

I'm not going to an airport.

1:19:05

I think I got used to just talk to people at the bar, at the airport.

1:19:08

I am fundamentally an introvert, but when I put myself in an outside position I engage, right?

1:19:14

That's how I learned about the world. Jim O'Shaughnessy: Sure. Absolutely.

1:19:17

Dave Nadig: But the issue there is: I still feel like that's a very self-selected world, right?

1:19:21

Jim O'Shaughnessy: No, yeah. No question.

1:19:24

Dave Nadig: The people that I'm, and this is going to sound unbelievably classist, but I don't actually interact with all that many people who get paid by the hour anymore.

1:19:34

When I used to travel all the time, I interact with people who got paid by the hour all the time.

1:19:39

Now they were in certain industries that I happened to be interacting with like retail, service, hospitality, travel.

1:19:44

But I have no connection to that world anymore, the way I used to.

1:19:48

I mean I used to know the names of individual gate agents in Albany.

1:19:53

Jim O'Shaughnessy: And I think that will reemerge and I think what you're going to see is people going everywhere, because we are a social creature. Right.

1:20:12

Well, again, what's the worst punishment in the world other than- Dave Nadig: Isolation. Jim O'Shaughnessy: ... being put to death? Isolation. Right? Dave Nadig: Right. [crosstalk].

1:20:23

Jim O'Shaughnessy: Which we all had. Exactly.

1:20:25

And so I think that you'll see more and more people going, "Oh, what the hell!

1:20:29

Yeah, let's go to Tibet." Dave Nadig: I hope so.

1:20:33

I mean, just even in my local community, this is not a comment on America at large, just the people, the closest 100 people around me, and that I know, I see the closing of the American mind.

1:20:45

I see it happening in myself and fight against it every day.

1:20:48

And so, while I hope you are right, I fear that this two years of isolation we've just been through has probably calcified some of the world views of people in a way that's going to be tough to break out of.

1:21:00

Jim O'Shaughnessy: Yeah, no, that's right.

1:21:05

What was back at fail now, fail next, fail better. Dave Nadig: Yeah. Fail better.

1:21:13

Jim O'Shaughnessy: I'm a massive fan of travel, it expands your mind beyond every, almost anything that I can think of, [crosstalk].

1:21:21

Dave Nadig: Back to the metaverse.

1:21:24

This is the other amazing thing about the metaverse that I think people don't quite get, is how much...

1:21:29

like this stupid helmet, the VR helmet thing, which I know it's fine, be all the skeptical you want.

1:21:35

Then go buy a $300 Oculus Quest and take it to both the oldest and youngest person you know, and in both cases, just find a couple travel videos.

1:21:45

Doesn't have to be any more complicated than that.

1:21:49

If your kid is super interested in, I don't know, dinosaurs or something like that, in five minutes you can go through the Oculus Quest interface and go find some video about exploring the dinosaur digs in Utah, or something like that.

1:22:03

It's absolutely mind bending.

1:22:05

So people are skeptical about that stuff.

1:22:07

Travel is actually an incredible use case, because I mean another great one; you want to see Notre Dame, VR is the only way you're ever going to see Notre Dame for real, again, in our lifetimes. Jim O'Shaughnessy: Yeah.

1:22:20

Dave Nadig: Because that God damn thing burned down.

1:22:22

But before it burned down a video game company did a millimeter accurate scan of the entire damn building and every piece of artwork in the place.

1:22:31

So you can just go run through it in VR now.

1:22:33

Jim O'Shaughnessy: I've done it. It's amazing.

1:22:35

And I've also been there. I was there before. Dave Nadig: Yeah.

1:22:39

Yeah, of course it's not the same as being there when the choirs singing on a Sunday afternoon, that's a lifetime experience, but boy, you get awful damn close to understanding the wonder of human achievements by just strapping the freaking helmet on its [crosstalk].

1:22:54

Jim O'Shaughnessy: Well, the last thing I want to touch on because, oh man, like we could do a five hour, six hours here; but one of the other things that you talk about in your piece, which I completely agree with, but I want to hear your take on it and help us our audience understand.

1:23:13

Because I think it's very insightful and helps people think about how they should be thinking about NFTs, how they should be thinking about Crypto.

1:23:22

And that is this idea that all value is: A, and as my friend, Roy Sutherland, says, is in the mind of the one valuing it.

1:23:31

And you put it in your piece as, "Okay, so there's psychological value.

1:23:37

And then there is intrinsic value."

1:23:40

You can use a discounted cash flow.

1:23:42

You can use a variety of those.

1:23:43

But you make a really interesting point, which is: I can't think of an asset that doesn't have...

1:23:50

that has zero psychological value. Expand on that please.

1:23:56

Dave Nadig: The only asset that I can think of would be calorie paste. Right?

1:24:01

I mean that's a physical object that serves one purpose, which was the maintenance of the meat shack. Right? Maybe that would be it.

1:24:10

So I first started thinking about this when I was writing about gold 15 years ago, for some publication, and I was trying to approach it rationally, right?

1:24:20

Like, "Okay, gold it's being used this way...

1:24:22

Has this minor industrial..."

1:24:24

So you start trying to tease out "what is the value of gold?"

1:24:27

And you very quickly realize you have to say, "Okay, well, an ounce of gold is worth about $84 on industrial application and potentially use cases there.

1:24:35

And then whatever else is psychological value." Right?

1:24:39

Because it's not actually doing anything for you, unless other people think it's doing something for you.

1:24:44

And that brought home a lesson that I learned on the trading desk real fast.

1:24:47

When I first got on a real trading desk in 1998, running real money for other people.

1:24:54

And you realize just how wrong you are about absolutely everything.

1:24:58

You realize that there is nothing but psychology going on in the market.

1:25:03

And so when people look, like, "I have AMC on my screen right now.

1:25:06

It's down 23% in the last month, it's still up 2000% in the last year." Right?

1:25:11

Jim O'Shaughnessy: That's right.

1:25:12

Dave Nadig: So that's like, we've seen these incredible object lessons of why psychological value is all that's important.

1:25:18

Which is why I don't dismiss technical traders and guys who have a system.

1:25:23

Because, honestly, they'll be right for some period of time.

1:25:26

Because all technical systems, all trading systems, are just ways of encapsulating psychology in a moment in time.

1:25:32

And guys get that right for a while, they inevitably cannot get it right forever. Right?

1:25:38

Now some things last longer than other; point and figure charting still kind of works a lot of the time in some things.

1:25:44

But that's a lot of ifs and buts and it works, right?

1:25:48

So there are some truisms, but for the most part all those systems are just reflecting psychology.

1:25:52

And what we've seen in the last two years is that psychology shifts really darn fast. Jim O'Shaughnessy: Yup.

1:25:56

Dave Nadig: And the stuff that you value psychologically; the knowing that you're going to have a steady dividend stream; understanding what the companies in your portfolio do, so that you feel like an owner.

1:26:06

None of those things have any actual value, right?

1:26:09

The only value of any of those things is: What do they do the number in your portfolio?

1:26:12

And what are you going to do with that number in your real life?

1:26:15

Because the number in your portfolio doesn't matter either until you turn it into a vacation, or real estate, or a meal, or college education, or something like that.

1:26:25

The money itself is a meaningless, psychological counter, too.

1:26:28

Jim O'Shaughnessy: Exactly.

1:26:29

And it is such an illusion for people who don't understand that, that's all it is.

1:26:38

It's a symbol and you can use it well or use it poorly.

1:26:41

Dave Nadig: And, I think also, it's really easy to forget how quickly it changes. Right?

1:26:47

Jim O'Shaughnessy: Mm-hmm (affirmative).

1:26:48

Dave Nadig: I think, that's to me, is the big lesson.

1:26:50

And I think the one that, again, people in our generation, a certain age, need to step back and remember.

1:26:55

It's like, remember how quickly things changed in 1987 and 1988.

1:27:00

Like, remember how quickly things changed in 2000, 2001.

1:27:03

Like even the global financial crisis wasn't that long ago.

1:27:08

And our entire trading infrastructure does not work the same way it did before that.

1:27:12

Jim O'Shaughnessy: Right.

1:27:14

Dave Nadig: We do these massive changes to the ecosystem, and they're a big deal for about a year and a half, and then most people forget they ever happen.

1:27:25

And they assume the way it is now is the way it's always going to be.

1:27:27

So when people say things like, "Well, they'll never ban Crypto."

1:27:31

"They'll never say that Stablecoins are just money market funds and have to register."

1:27:35

I'm like, "Are you crazy?"

1:27:37

That's exactly the kind of stuff regulators do.

1:27:40

Like Reg NMS just happened.

1:27:43

Like, I mean, high frequency trading was just willed into being.

1:27:47

Jim O'Shaughnessy: Which brings us right back to my science fiction treatment at our beginning of our conversation.

1:27:54

Nixon, one of the other things he did was slam shut the gold window.

1:27:58

And say, "Hey, all you guys fuck off.

1:28:01

You can't have gold anymore."

1:28:03

Dave Nadig: I guess, the problem I have with those things, Jim, and you and I haven't really talked about this; look, I could have an opinion about the Gold Standard, but my opinion is utterly irrelevant.

1:28:15

Unless I'm actually the president of the United States or a Congressman on the Senate Finance Committee, or something like that.

1:28:23

Whether or not I care about the Gold Standard is absolutely irrelevant to anything I can do tomorrow to make anybody's life a little easier.

1:28:31

And ultimately, I write for one audience, I write for guys who are in the business, being financial advisors, trying to help folks manage their money.

1:28:38

And some portfolio managers who are just trying to manage the money and some individual investors who are just trying to manage the money.

1:28:44

My opinion about the Gold Standard does not make a bit a difference to any of those people's day today.

1:28:50

And I get people get really fired up about these things and write books about it.

1:28:53

And that's great because I'll go read them.

1:28:56

But at the end of the day let's just focus on what we can actually improve somebody's life with today.

1:29:00

Jim O'Shaughnessy: I agree.

1:29:05

I have never understood people who get obsessed about things like the Gold Standard, or whatever.

1:29:13

I think you're much better and much healthier thinking about, "Okay.

1:29:15

So what can I do today that will add value?"

1:29:20

I think that's a great question to ask yourself.

1:29:22

Dave Nadig: Do people ever come to you and say, Jim, Pete, you have an audience, you should write about X because it would make a difference.

1:29:29

Jim O'Shaughnessy: All the time.

1:29:30

Dave Nadig: Do you listen? Jim O'Shaughnessy: No. I honestly don't.

1:29:37

I don't look at the stats of how a particular episode does. I don't want to know. [crosstalk].

1:29:45

Dave Nadig: I really don't want to know on this one.

1:29:47

Jim O'Shaughnessy: But I am by nature a very competitive person.

1:29:52

And if I saw those stats, I know that even if it was only subconsciously, I know that if this guest did poorly, I'd probably invite those guests or people like them, sure.

1:30:06

Dave Nadig: Everybody I work with is under strict rules to never tell me how much traffic any of my stuff gets. Same thing.

1:30:13

Jim O'Shaughnessy: Brilliant. [crosstalk].

1:30:15

Dave Nadig: It's like, "I just don't want to know."

1:30:16

I assume it's 50 people, because that's about how many people will ever say anything about it to me.

1:30:21

It's probably more than that because I'm still employed.

1:30:24

But I don't know and I don't care.

1:30:25

Jim O'Shaughnessy: Same with me.

1:30:30

I can add value by having people like you, who I find really interesting, on and then just putting it out there. That's what I'm doing.

1:30:41

I'm never going to monetize this.

1:30:44

I'm again, I'm a massively fortunate [crosstalk].

1:30:46

Dave Nadig: Who would your advertisers be? No, I'm serious.

1:30:50

Like Cinnamon Toast Crunch?

1:30:51

I would have to go to deeply non endemic advertising for this one. Jim.

1:30:56

Jim O'Shaughnessy: I know. I can't even imagine. I love it.

1:30:59

Dave Nadig: It's just Cinnamon Toast Crunch all the way down.

1:31:01

Jim O'Shaughnessy: There you go.

1:31:03

They're going to make me an offer I can't refuse.

1:31:05

Dave Nadig: So much money on Cinnamon Toast, sugary breakfast cereal, man.

1:31:09

It's the way of the future, plastics.

1:31:11

Jim O'Shaughnessy: Well, this has been awesome.

1:31:15

Now this is a real compliment I'm going to give you.

1:31:18

This has been as fun as I was expecting it to be.

1:31:22

Dave Nadig: Ahh, well thank you.

1:31:23

It hasn't been nearly as terrifying as I expected it to be.

1:31:26

Jim O'Shaughnessy: So we ask all of our guests at the end that what we're going to do is we're going to create you the emperor of the world, but only for a day.

1:31:36

And you can't hurt anyone. You can't kill anyone.

1:31:38

You can't put anyone in a camp.

1:31:40

But what you can do is incept them with two ideas, that they're going to wake up the next morning, thinking that idea is their own and they're going to change the way they do things. Based on that idea.

1:31:56

What two do you got for me?

1:31:58

Dave Nadig: Mine are really pretty boring because I know this podcast and I know some of the answers people give and they're big and complicated and really interesting.

1:32:06

And I'm going to say the honest truth if I was trying to make the world a better place.

1:32:11

Everybody would wake up tomorrow morning and instead of whatever else they were doing, they would just walk across the room to the bedroom put a pillow on the floor and sit down and stare at a wall for 10 minutes.

1:32:22

No other instructions whatsoever.

1:32:23

I don't care what you do.

1:32:25

Jim O'Shaughnessy: [crosstalk]. Dave Nadig: Pray. Don't pray. Think about your day.

1:32:29

Don't think about your day.

1:32:30

But just keep your eyes open and stare at the wall. Don't look to the left. Don't look right.

1:32:36

Just keep your eyes open. Just stare at the wall. You'll learn so much.

1:32:39

I know you don't have a big meditation practice, but you call it zoning-out. It doesn't matter.

1:32:43

You've got to find that time to turn off the narrative that you believe is your life.

1:32:49

And I think that would be the number one.

1:32:50

Jim O'Shaughnessy: I love it.

1:32:52

Dave Nadig: Number two, after you do that, go listen to the Brandenburg Concertos.

1:32:58

Jim O'Shaughnessy: That sounds like my morning, today. Dave Nadig: Yeah. You're all set.

1:33:05

No, but truly, just the power stillness and the power of music.

1:33:09

I can't think of anything else more important.

1:33:10

Jim O'Shaughnessy: I love it. I agree with you.

1:33:13

This has been so much fun, Dave.

1:33:15

And would you tell everyone where we can find you?

1:33:19

Dave Nadig: Easiest thing is @DaveNadig on Twitter.

1:33:21

Like you, Jim, I use Twitter as my office.

1:33:25

I probably post too much for some people's things.

1:33:27

I tend to keep it pretty tightly work-oriented during the week and post weirder stuff on the weekends.

1:33:33

Jim O'Shaughnessy: Very cool.

1:33:34

Dave Nadig: And you can read anything I write at www. etftrends. com.

1:33:36

Jim O'Shaughnessy: Fantastic. Thank you so much.

1:33:39

And look forward to seeing you in real life soon. Dave Nadig: Soon. Thank you so much, Jim. This has been a blast.