I feel ya James. When markets crash, my brain says “don’t worry, it’s a long term game” but my stomach says “Did we just eat bad oysters? Why do I feel nauseous?”. 

There’s a unique nausea that comes from losing 20% of your net worth over breakfast. 

Quick story. Back when I sold my first company, I got a nice chunk of Amazon stock (because we sold it to Twitch, owned by Amazon). 

It felt great. But I was confused - should I hold or sell (to have liquid cash)?

I talked to some rich guys, and they said “don’t sell your stock, just borrow against it”. 

It’s the best of both worlds. Hold the stock AND get liquid cash. 

What’s the catch? Well, if the stock crashes, you can get margin called. 

So I built a little excel calculator and saw that I could borrow ~60% of my stock, and be safe for a margin call unless something really crazy happened…

…and then a global pandemic started. 

All because a bat flew into some dude’s bowl of soup in China. Or a pangolin (???) kissed a tourist. Or a scientist accidentally spilled a deadly virus on his shoe and left the lab.

Whatever the hell it was, the markets panicked, crashed, and I got very close to getting margin called. 

I didn’t. 

But the hilarious thing is - I was so stressed, I basically margin called myself. I sold some stock, paid off the margin loan, and slept like a baby (but a baby who just lost 30% of their net worth overnight).‍

On that day I learned 3 lessons: 

1. Leverage is like botox. Use with caution. Too much of it will f*ck your face up 

2. When a market crash happens - respond, don’t react. Just do nothing for 30 days

3. The most costly mistakes are about SELLING early (not buying wrong). When you buy wrong, you can only lose 1x your investment max. But selling early, you might miss out on 2-10x upside‍

Alright, let’s move to a more light hearted question.

Ben! I knew you’d be the guy to hold me accountable on this.

And lemme tell you, I’m trying. But I spent the last 48 hours at Legoland and the San Diego Zoo.

‍Do you know how hard it is to eat clean at an amusement park?

‍I was walking around the theme park trying to find a salad like Joe Biden trying to find his way off stage after giving a speech.

(Before you get mad, that’s not a political joke. That’s a joke about an old guy stumbling around confused…wait, that’s not allowed either. Quick let’s move on before I get fully canceled).

I don’t get it. But OpenAI is like a sushi restaurant in the midwest - it’s starting to smell fishy.

Their top 2 safety leaders (Ilya, Jan Leike) left. The CTO (Greg) going on ‘extended personal leave’. That doesn’t seem…great.

‍‍And you’re right - the John Schulman-Going-To-Anthropic thing is highly unusual. Imagine if the cofounder of Uber left to join Lyft. We’d all be like wtf?‍

It’s either a safety thing, or a financial thing.

‍‍Safety thing == people joined OpenAI because their mission was safe AGI. But all the safety people are leaving because they think Sam is going for winning/profit more than safety first.

‍‍Money thing == maybe people are vesting out, and getting huge offers at competitors where it’s financially irresponsible to stay at OpenAI. (or they’re worried that OpenAI is burning $5B a year in cash… $5B a year is a lot…but I doubt that’s the concern, the size of the prize is too big).

‍I don’t know what the hell is going on..but it’s going to make for a great Netflix doc in like 5 years.

I love the Leeds chip on your shoulder. And I love even more that you’re taking credit for a guy in 1774 who discovered oxygen that happened to live in Leeds. 

I’m from America, we invented the Big Gulp - which holds more liquid than any human can consume. (‘Merica baby!)

OK - you asked about Naval. I’m on vacation, which means I’m reading more than usual. So I’ll give you a Naval-ism about reading: 

“Reading isn’t about putting information in your mind. Reading is about sparking a fire in your mind”

This is for the people who listen to podcasts on 2X or brag about how many books they read in a year. The point of the books isn’t about getting info, it’s about sparking new thoughts in your mind. 

What exercise is to the body, reading is to the brain. 

This led me to do 3 things: 

1. Read a wide range of things. I read a book about management, and then a book called Chimpanzee Politics (power and sex among apes). These unrelated books spark new combinations of ideas in my mind
   
   
2. Read the best stuff again. Rather than read new books, I read books again, several years later. Even though it’s the same book, I’m a different person, so I take something completely different from it. Reminds me of that great quote: “No man steps in the same river twice, for it is not the same river and he is not the same man”

3. Pause while reading. Speed reading is a mistake. If the goal of reading is to spark a fire in your mind, then that fire needs air to breathe. 

Also, I quit books that are boring. There is no honor in finishing a bad book. I am a strategic quitter. I feel no obligation to finish books, which makes reading a lot more fun and interesting.

Alright that’s all folks. 

Hope you enjoyed the AMA. I’ll be doing these regularly, so drop me a line if you have any questions! 

Have a great weekend boys & girls. 

Sincerely,

Your favorite uncle - Uncle Shaan