Experiments in Cutting Inputs

Right now I’m on a bit of a retreat up into the woods in Mendocino. 

I’ve decided on a little bet with Calvin that I’m going to be off Twitter for the month. 

What ideas do you have when you don’t have Twitter?

When you don’t have the 1,000 inputs that are flooding in from the news, social feeds, and Telegrams…

Which ideas do you truly have conviction in?

It’s had me re-assess my inputs, and give myself a gut check for how many ideas are truly mine, vs. how many ideas I’m just “following.”

When I get back from this Haitus, I’m going to experiment with having less inputs vs. more. Crypto can be overwhelming enough as is.

In investing, I have always loved Howard Lindzon’s perspective about being a trend follower. His ideas have put a name to my investing style. And a big part of his style is meeting with people and finding the few to really believe in and listen to.

I don’t crunch numbers, but I do believe I have a very highly attuned fork for picking up trends. I’m an early adopter, not so early to go first, but also ahead of the early majority. 

In this 10-year bull market, this type of investing style has paid. How will that play out in a regime change in stocks? That’s unclear. So, it’s possible it’s just been lucky that my investing style and interests (FAANG and Crypto) have been buoyed by this massive stimulus and bull market in equities and Crypto. 

Without inputs, you’re left to your own thinking, which is much, much harder than it seems. 

Writing… Original Thoughts

Writing your ideas down to share and communicate with others is one thing… coming up with ideas whole cloth without remixing is another. 

We’re in an era of networked thought, crowdsourced thinking. The ConstitutionDAO was an example, and so was Gamestop. 

The implications of Community x Funding are so massive that I don’t think people have realized them yet. 

While being a “lone genius” is a rare and important skill, I believe funds like Numerai, a crowdsourced Hedge Fund, will dominate on the other end of the spectrum. They will crowdsource ideas from thousands of people and will find new opportunities that the market did not see. Gamestop was a great example of this.

So the crowd is powerful, the crowd takes millions of inputs and creates a direction.

Where are we flying?

There is an experiment where they put 100 people in a movie theater with video game controllers, and on the screen was an airplane, taking off and landing.

Every controller in the theater had an input on the direction of the plane.

The question of the experiment was, could 100 people coordinate making different moves and still fly a plane?

Amazingly, the plane was able to take off and land. Every input was coordinated in such a minute nudging way that the plane directionally flew and landed.

That’s a bit like markets today.

So what is the role of the individual idea? The individual decision? Are we making them for ourselves or are we feeding a crowd-based direction in markets and investing, that we ourselves are pulled by?

Is this an era for “contrarians” ? Is being in crypto still contrarian?

While I’m doing a lot of thinking I am realizing that it is very difficult to have an original point of view. 

So for now I’ll likely put that tuning fork back up.

More Conviction with Size

Before I go, there is one lesson I’ve been leaning into more; and that’s to bet on my own conviction more…

There are so many trades I was directionally right in – and *size* would have made a difference in if I had gone bigger. 

Taking bigger risks is a funny thought when you’re effectively 100% in crypto. Maybe I’m setting myself up for a harsh lesson, but if I hedge enough with some cash to hold me over, I think it’s likely I’m not putting on enough risk when I do feel like the moment is right. 

So what I’ve learned from my Twitter hiatus is to bet on myself more, with bigger size.

And to do so with a strong sense of where the crowd is flying before it is fully aware of it.

XX I’m David Sherry, I coach early-stage founders, invest in crypto, and write on the overlap of investing, crypto, and the creator economy.

You can join my Telegram chat for more real-time notes on what I’m thinking.