Cliff Sosin

Once you sort of understand everything immediately around that, other changes outside of the, that they're sort of happening, feel less relevant.

Once you sort of understand everything immediately around that, other changes outside of the, that they're sort of happening, feel less relevant.

Yeah, that'd be a great example, right? So, you know, I, Who knows how people are going to write software in 10 years? For what? For quantum computers? You might have a business today. It's like building a castle on sand. It's just very, very hard to make predictions. But on the other hand, You know, like the cigarette business, right? Like people, nicotine's habit forming.

Yeah, that'd be a great example, right? So, you know, I, Who knows how people are going to write software in 10 years? For what? For quantum computers? You might have a business today. It's like building a castle on sand. It's just very, very hard to make predictions. But on the other hand, You know, like the cigarette business, right? Like people, nicotine's habit forming.

There's this phenomenon called secondary reinforcers, which is a psychological phenomenon that you can, you know, put into Chachi Petit. I'll explain it to you. And, you know, but basically it makes people incredibly brand loyal to things that like stimulate the reward systems. And then there's also distribution economics.

There's this phenomenon called secondary reinforcers, which is a psychological phenomenon that you can, you know, put into Chachi Petit. I'll explain it to you. And, you know, but basically it makes people incredibly brand loyal to things that like stimulate the reward systems. And then there's also distribution economics.

But that is just not an area where there's a lot of dynamic change happening. It's also not an area where I need to think about 15 different moving parts to sort of have a general sense as to what's going to happen. Of course, the problem with these contained things is that If they're easy to understand, then everyone understands them.

But that is just not an area where there's a lot of dynamic change happening. It's also not an area where I need to think about 15 different moving parts to sort of have a general sense as to what's going to happen. Of course, the problem with these contained things is that If they're easy to understand, then everyone understands them.

And so, again, investing is this incredibly challenging endeavor where you're dancing on the knife's edge. You're looking for these things that, on the one hand, they're simple to understand so you can understand them. On the other hand, they're challenging to understand so everyone else misses it.

And so, again, investing is this incredibly challenging endeavor where you're dancing on the knife's edge. You're looking for these things that, on the one hand, they're simple to understand so you can understand them. On the other hand, they're challenging to understand so everyone else misses it.

I have in my head a number of different frameworks for how a company can make money over time in a competitive world. And a simple example from microeconomics would be that of a Corno oligopoly. And just for those who maybe forgot their game theory from college, there are... Two broad types of oligopoly in the economics literature. One is Cournot. The other is Bertrand.

I have in my head a number of different frameworks for how a company can make money over time in a competitive world. And a simple example from microeconomics would be that of a Corno oligopoly. And just for those who maybe forgot their game theory from college, there are... Two broad types of oligopoly in the economics literature. One is Cournot. The other is Bertrand.

The key difference between them is that in a Cournot oligopoly, the competitors choose the quantity of things they're going to sell first. and the price falls out. It's the thing that moves. In a Bertrand oligopoly, the competitors choose the price that they're going to sell at, and then the quantity falls out, and it's the thing that moves.

The key difference between them is that in a Cournot oligopoly, the competitors choose the quantity of things they're going to sell first. and the price falls out. It's the thing that moves. In a Bertrand oligopoly, the competitors choose the price that they're going to sell at, and then the quantity falls out, and it's the thing that moves.

And this seems like a subtle change, but it results in a pretty big difference in the competitive equilibrium. So in a Bertrand oligopoly that's non-cooperative, that is to say that people aren't figuring out a way to signal and to sort of cooperate.

And this seems like a subtle change, but it results in a pretty big difference in the competitive equilibrium. So in a Bertrand oligopoly that's non-cooperative, that is to say that people aren't figuring out a way to signal and to sort of cooperate.

Then what happens typically if you imagine, like let's say I'm selling cookies at the state fair and there's me and there's another competitor and there's two spots to sell cookies and we both can manufacture all the cookies we want in a truck next to the fair. And let's say people only buy cookies based on price and they're right next to each other and perfect competition, all the rest.

Then what happens typically if you imagine, like let's say I'm selling cookies at the state fair and there's me and there's another competitor and there's two spots to sell cookies and we both can manufacture all the cookies we want in a truck next to the fair. And let's say people only buy cookies based on price and they're right next to each other and perfect competition, all the rest.

So what happens is, you know, let's say each cookie costs a dollar to make. Well, I start out, maybe I started selling them for $2. I want to make a dollar a cookie. But my competitor realizes that if they charge $1.99, they can get all the sales. And so they charge $1.99 and then I charge $1.98. And before we know it, we're both down to a dollar and we're making no money per cookie.

So what happens is, you know, let's say each cookie costs a dollar to make. Well, I start out, maybe I started selling them for $2. I want to make a dollar a cookie. But my competitor realizes that if they charge $1.99, they can get all the sales. And so they charge $1.99 and then I charge $1.98. And before we know it, we're both down to a dollar and we're making no money per cookie.