Doomberg Transcript
Very high WPM on this podcast
00:00.00
cactus chu
So doomberg you run you run a substack. You run a very popular Twitter account and your bio says you totally agree. Doesn't mean what you think it does so what does totally agree mean.
00:12.43
Doomberg
Yes, ah totally agree is the standard response. We have to troll on Twitter and so somebody will get into you know one of our feeds especially like say when we publish a piece.
00:41.18
cactus chu
C.
00:51.15
Doomberg
I don't know about bitcoin or something like that and and they don't like what we wrote and they'll or perhaps didn't even read what we wrote but assumed what we wrote would be something they didn't like and they'll write a scathing review or leave a nasty comment and our standard reply to such trolls is totally agree. You know, it makes perfect sense. Twitter is a um, fantastic times town square. It's vibrant. It's you know information is real time and unfiltered which is its strength and its weakness but it's also a toxic success pool of.
02:15.50
cactus chu
50
02:08.49
Doomberg
Trolls bots and you know the Twitter algorithm is designed to make you angry and we have a systematic process to ensure that we never get angry on Twitter so far so good. We've mostly not gotten angry on Twitter and totally agree it's just our way of diffusing. Um. Diffusing a troll attack is yeah None totally agree and so if you search totally agree from domberg t on Twitter you will find a humorous array of trollish tweets directed our way to which we respond. With that phrase and so it's just a fun way to navigate Twitter little inside jokes here at the office. You know we're a very small team and we're running this entire duber project in-house and when such a troll materializes in our feed we often debate whether they're. Worthy of a totally or agree or just a simple ignore.
04:15.38
cactus chu
Yeah I think something about Doomberg that really stands out to me is simultaneously. You guys have so much value and unique information to add. But I don't know how much of your popularity is due to that or due to really this kind of mastery of Aesthetics. And the kind of vibes that I get So Maybe you can answer that even better than I can. What part of branding is about having that kind of unique information that Alpha as some people put it or how much of it is about really being able to communicate and having that kind of style aspect.
05:10.79
Doomberg
So it's a total product. Um, there's there's we've talked about this several times and written about it. There's 5 pillars to any business and brand is one of those pillars. We think a lot about brands. We consult brands in our day jobs.
05:36.92
cactus chu
In.
05:49.49
Doomberg
Our consulting business is oriented around improving the operations of companies or helping people analyze potential investment opportunities by testing the information through the lens of what we call the five pillars brand is a fascinating concept and most people get it wrong. There's very, very few good books on brands. Most of them are just filled with empty platitudes and pretty pictures. Brand is a gut feeling that you induce in your ideal clients as they interact with your product and so. Before you can build a brand you have to have a profile of who your ideal clients are and we've done that. We've had character sketches for what we think our ideal clients would be and then once you've identified who your ideal clients are the next question is what is the. Gut feeling you wish to induce in them as they interact with your product and for doberg our brand ambition is that when an email from doberg hits your inbox the gut feeling is reinducing. You are too. I get to read that. Um. And if you do that well and you execute it well then you can and ah enough of enough people say that then you can say that you have a brand and in order to induce the gut feeling of ooh I get to read that our brand ambition has got 3 sub objectivectives None um, we shall be funny without being silly two. We shall be provocative without being polarizing and three we shall teach without being self-indulgent and if we do those 3 things and that brand ambition manifests itself in our writing in the editing you know hey.
09:21.32
cactus chu
M.
09:30.23
Doomberg
Is this line provocative or is it or is it polarizing and is that subtle joke funny or is it silly or are you being a little self-indulgent here. Is there a tighter way that we could relay this information that might be new to the audience without making it seem like you know you're Mr. Notall and so. Um, that is how we attacked the domberg project and we were cautioned when we started this project by some people in space. The newsletter business that we would not be successful unless we gave specific stock picks and we thought that was. Untrue we thought that um, there's plenty of stock picking newsletters out there that it's a crowded space. We hypothesize that our ideal clients wanted to learn something, wanted to be entertained and wanted to enjoy good writing. And to the extent that anything we write or teach might be an input into their own personal investing process. Our ideal clients. Don't need somebody to hold their hands and tell them what to buy and what their entry point should be um and so we modeled ourselves you know in that way and um. And set about the task of executing our business plan across all None pillars not just the brand and then critically layered on top of that is a mindset of continuous improvement, authentic continuous improvement where we use data and analytics and feedback from our ideal clients to keep making the product better.
12:44.80
cactus chu
Just a quick answer from the audience. What are the 5 pillars besides brand.
12:36.15
Doomberg
And so yeah yeah yeah brand um technology channel demand creation and operations and I could give you a 1 sentence summary of all 5 of those if you would be interested. But
13:15.68
cactus chu
Um, yeah, that'd be great.
13:15.77
Doomberg
Um, brand is the gut feeling you induce in your ideal clients as they interact with your product channel is the corridor in which you bump into people who are authorized to pay you technology is as you might expect um all of the skills and digital or analog that you need to. Ah, execute your plan the other 4 pillars of demand creation is literally the marketing and selling of your product. Um and then operations is everything that goes into the production of your product and so for example for every doomberg piece. We have a 25 point checklist. What's the concept? What are we teaching? What's the title? What's the opening quote? What's the opening story? What are the charts? What is the set? What are photoshops? None edit None Draft none edit None Draft second edit you know, check all the pronouns make sure there's no typos. And we have a systematic plan to produce all of these pieces with discipline and if it's not ready. We don't publish it and so we have a plan across all five pillars. We've been open and authentic with our readers that we intended to make domberg a business from the start. It is the work of our lives.
15:23.54
cactus chu
M.
15:41.89
Doomberg
And it's an enormous gift that we get to play all day and can make a living doing it because it's not work for us producing these pieces and creating content for Twitter and um, editing the pieces and doing the photoshops we do everything in-house. Um, and it's fun. It's literally the work of our lives and ah and I think that comes through and so the reasons why people seem to like the product I don't think you know the alpha quote unquote as you referenced it is I mean I guess it's it's there. It's necessary but it's no word near sufficient I think people enjoy. The entertainment value and the and the learning and the and the fund we're having with it.
17:16.35
cactus chu
Yeah, I Definitely enjoy it and I know you talk a lot about the economic downturn as well as commodity prices supply train crash and we'll get you all of that eventually. But before we talk about the kind of macro effects. What's it been like for you? Has there been ah has there been a bit of a downturn internally has there been ah actually an uptick because your skills are more relevant than ever or just how has it been like.
17:59.27
Doomberg
Um, you know if we bifurcate our life into our consulting business in Doberg um, the consulting business is fine. In fact, we've fully recovered from the challenges that we experienced like everybody from the covid crash. And we had a very good business pre covid covid crushed a lot of our client base and and we had to reinvent ourselves that I think we had a drawdown of eighty to 85% in revenue from peak to trough in a very short period of time and and that's you know as we' like to say that was a high pucker factor.
19:14.78
cactus chu
Oh my.
19:18.25
Doomberg
Um, and you know it. It caused us to reinvent ourselves and one of the things we did to reinvent ourselves was we developed a vertical for our consulting business that involved helping content creators who serve Wall Street run their businesses better. And so by developing that product and marketing it and executing it and getting clients and helping them improve and learn. You know, always learning. Um the genesis of Doomberg was born and we were encouraged by some of our clients too. Scar Tomberg not the least of which because we would follow all our own Advice. You know when you're in the consulting business. Sometimes your clients only listen to part of what you say for their own reasons and um and so with their support and help we did it and um.
20:57.38
cactus chu
Citizen.
21:12.49
Doomberg
And so economically yeah doberg has been ah, a grill it succeeded beyond all of our wildest imaginations and and so now we're in a position where we can select what business we accept if we accept any at all because Dooberg is in our objective is to. Is to make a living doing only what we love. It's not necessarily to make the most amount of money possible and that's ah, quite a liberating mindset and I would say that we're especially grateful for the fact that we've been able to achieve what we've called personal sovereignty. We.
22:38.20
cactus chu
Yeah, you have a lot of control and I know you've talked about this on other podcasts but just talk about like just talk about the kind of freedom that you have what you basically do and and maybe a good entry point to this is that you've said that you don't take scheduled meetings right.
22:28.71
Doomberg
We if? yeah.
22:54.11
Doomberg
Yeah, so this is a key thing prior to doomberg. Um, we try to live a life where we optimize around a ratio of what we call get to. Divided by half to do um and you know the point of life is to live and the point of money is to enable an easier living money is not some scorecard to be continuously optimized. It is a tool to abate risk and to to. So secure happiness money alone can't make you happy but having been poor and now being relatively well off I can assure you that one is better than the other. Um and so um, part Yeah, ah by the way. Yeah, it's one of the things we struggle with. I mean I certainly struggle as a parent.
24:38.66
cactus chu
I think I say I have a similar experience.
24:51.17
Doomberg
Impart the motor in your children without having them go through the hardships that you did because as a parent you know you always struggle with that. Um, and so the no scheduled meeting things is actually we've never had a client complain about it. In fact, they like it and so it only works because we are continuously and totally available to them. None Twitter slack text email or phone were incredibly responsive. We can be incredibly responsive because we have no scheduled meetings and it turns out that 90% of meetings are worthless and then of the 10% of meetings that are worthy 90% of the time is wasted.
25:45.10
cactus chu
Hun.
26:08.90
Doomberg
And so the drag factor on meanings is like 99% um is true like I we spent I personally spent decades in industry and None of the reasons I left industry is just how much unproductive work. In fact, when we first started our firm. We. We started on the following theory. Um. We created all of our value in corporate America in 20% of our time and the other 80% of our time was wasted and let's just imagine that our company was paying us None units of value. You know, total compensation for the work we were producing.
27:06.16
cactus chu
A.
27:26.10
Doomberg
Um, we made a bet on ourselves that we could market that 20% 5 times over and charge. You know 40 units of value for it and make more money on our own than we were making with our healthy jobs in corporate America doing only what we love? um.
28:10.94
cactus chu
And it looks like you guys succeeded.
28:01.99
Doomberg
And so yeah, that that we succeeded in the firm and then of course doberg grew out of that collective set of experiences and now our plan is kind of in the long run to put the consulting firm on runoff keep only the clients. We really love. Um. And we've turned away clients of course to focus on dumer because one of the things that you learn when you have no skills with meetings is you realize just how precious your time is how productive you can be when nobody is wasting your time. Literally phone calls with clients but might last 2 or 3 minutes like they understand that they're going to call with a specific question. They're going to get a specific answer and if they need follow-up, we'll do the follow-up offline and call them with the 2 minute version of the answer when we figure it out. Um there's no need like we don't feel the need to be on people's calendars as a measure of our importance. Um. We charge for value and and that's that and it's really a magical thing so by doing so you get to spend an enormous amount of time reading learning canvassing information distilling complexity connecting dots and every time we write one of these pieces. The researching part of it the writing part of it the editing part of it. And then the comment cycle makes us smarter makes us more knowledgeable about a different set of topics and then people reach out to us with ideas and with feedback and hey I'm an expert in this area and you got None out of None right? But here's the None thing you got wrong which is great is this ideal. So then you become sort of the center of this node. Um, and and every time we tackle a new area usually an area that we have some pre-existing knowledge in but we want to learn about we bring the audience along with us in that journey and so every time we write a piece we get better and so it just feeds on itself and it is the work of our lives It's certainly the work of my life and. It's a gift I say that there's not a day that goes by that we are not extraordinarily grateful for having figured out what it is that we were meant to do.
32:02.78
cactus chu
Yeah, it does sound like a really good life and something that I've really thought about, especially continuing my journey into the kind of online writing Arena is.
31:59.55
Doomberg
It's a great life.
32:31.96
cactus chu
That I really do want to have a way of verifying what I think and what I predict with reality. How do I reason about the world? I Want to have something basically happening in parallel and that's not really related to my ability to maintain an audience and the question I Want to ask you related to this is do you think that. Ah, that the work you do in consulting benefits your newsletter, the kind of understanding the skills you apply and so on is that something that is highly correlated loosely correlated or is it just something that is not too related at all.
33:24.95
Doomberg
Well, you're the you know you're the integral of your life experiences and our team is consistent. You know it consists of people that have had pretty interesting and varied backgrounds and experiences and the synergy of it together is what makes it work. Um, I am a scientist by training. I spent decades in heavy industry in the commodity sector. I have a very keen understanding of the molecular map of the world and how the economy flows. I have some background in venture capital and private Investing. Um.
34:43.78
cactus chu
Yeah, wait What are you doing in industry like I I think I want my audience is the type of people who would like to know this right? like what is like kind of what is the kind of like tasks. What's like a project you were working on.
34:35.97
Doomberg
Will.
34:43.22
Doomberg
Yeah, yeah I was a scientist and eventually became sort of an executive that led large teams and both in technology and then on the business side and back and forth as one does if a corporation. Deems you know to have some potential and so yeah, but we've worked on all manner of Technologies. You know that there's a difference between invention and innovation which most people don't don't quite understand so innovation is the.
36:01.24
cactus chu
Um.
36:00.31
Doomberg
Reduction of an invention to practice and so a lot of the credit goes to the inventor. But in reality an invention is nothing more than you know a thought or a demonstration project until a group of people come into the project and make it work.
36:13.64
cactus chu
I see.
36:47.40
cactus chu
Right? So you're doing that kind of execution right? mm.
36:39.79
Doomberg
Gae it and also some inventing. Um, but you know there's various parts of technology where you know firms focus on inventing and then you know the more you de-risk a project the more valuable it is but the more expensive it is to de-risk a project right? And so. But yeah a lot of experiencing global energy in the real world in bureaucracy which is something I know that you're very interested in None of the reasons we left was because of the bureaucracy. You know we're a very small team and we are fully deployed as you can imagine. We're pumping out None a month you know, um.
37:38.78
cactus chu
Yes.
38:03.32
cactus chu
Um, yeah.
37:55.41
Doomberg
And each piece is researched. You know it's Edited. It's Written. It's photoshopped. It's all done In-house. Our technology plan involves mastering our bloomberg terminal but becoming better photoshoppers understanding How to you know, do abcd for the business and we have a plan and we have goals and. Um, and we execute against those goals and so um, but yeah, our team is, you know, we have some private equity background on our team. We have a corporate finance background on our team. Venture Capital Real nice makes the birth of us. We think of ourselves as a small think tank for our clients.
39:19.14
cactus chu
M.
39:11.79
Doomberg
Pay us to pick apart and decompress and put back together problems in unique ways and so they don't come to us for um, sort of simple problems that the problems we work on for our clients tend to be very hard, very intractable and we. We excel in distilling complexity by communicating the distillation of that complexity in language that is accessible but also coming up with new ways of thinking about problems that aren't always right? But at least they're new and so yeah, that's what we did before but our goal long term and we have. More than surpassed any objectives that we might have had when starting this, we were in a position now where Doomberg could be and probably soon will be virtually.. The only thing we do.
40:58.88
cactus chu
Yeah,, that's the miracle of the internet man so something that I maybe wanted to ask you at the end but I think is a good time to ask now is let's let's say that you're ah you're a hypothetical machine learning engineer so you have like a ton ton of like math skills and Contexts of like similar similar people right. And you wanted to put together a consulting company. That's the kind of life. You want to live okay and I'm not asking you to kind of give away the secret sauce here, share only what you're comfortable with sharing but like what would you need to know to kind of go on a kind of doomberg like ah life trajectory.
41:27.45
Doomberg
Um, okay.
41:56.23
Doomberg
So the consulting firm or the content creator part. It sounds like you want to go on the consulting side. Um, yeah, consulting is um, it's a tough business and the toughest part of the business is client acquisition.
42:19.92
cactus chu
Yes.
42:33.99
Doomberg
Um, and then once you have a client if you deliver for them early and in a way that makes it feel like your retainer. We ran a retainer model that your retainer is kind of house money then you could sort of stack those and so anytime we got a new client we would.
43:07.30
cactus chu
M.
43:12.57
Doomberg
Pour an enormous amount of time and effort early to make it overwhelmingly valuable for them to have engaged us. That doesn't always work. I mean sometimes you can't solve the problem or sometimes personalities clash. But the real rate limiting step in developing a consulting business is. Is customer acquisition in the non place and we were benefited by. You know we benefit from our pretty extensive rolodex of contacts and industry. You know our few clients were. Companies that had tried to hire us as individuals and when they found out that we were consulting. They were happy to engage our services and the nice thing about being a consultant is that you're a variable cost and so you know the companies pay you. They don't have to worry about benefits and.
44:37.12
cactus chu
She did.
44:57.21
Doomberg
And all, that's of course the risk of course is that your variable cost and so when something like Covid Happens. You're You're an easy thing to turn off and in fact, we called many of our clients and let them out of their contracts because you know if you're deciding between letting go of a longtime employee or. Or turning off a consulting Contract. We understand that decision. We're in those shoes in the global financial crisis for example and so we thought just as an investment in Karma we would proactively reach out to our clients and let them out of their contracts and um.
45:59.20
cactus chu
Ah, that's so sweet.
46:01.70
Doomberg
And so that Goodwill and that karma pays off over time integrated over your life. It doesn't feel like it at the moment of course and so yeah, client acquisition is key. We have you know we live a life of proactive giving if that makes any sense the npv of giving is infinite.
46:40.40
cactus chu
Yeah.
46:37.17
Doomberg
And many people will take advantage of you and many people will not pay it back when you need it and that's all, okay, um, the npv of giving is infinite because enough of them will pay back and will help you if you need it and. By living a life of giving with no scheduled meetings a life of learning and joy we are able to surf the sea of abundance as we like to call it and we could always down for dollars if we needed to so our families aren't going to go hungry and that's a great great privilege. So. You know, client acquisition and consulting is key. There are some tricks and tactics that you can use but probably save those.
48:12.36
cactus chu
Yeah, we can. We can. We don't need to vow for the audience too much. So One of the big things that you do consulting on and that you talk about and that is in the Doomberg newsletter is Energy. So One of the big statements that you've had that really resonates. Has really resonated with me is ah physics Beats platitudes. So Do you want to explain what that means and talk about energy a bit in general? Give us an introduction.
48:43.70
Doomberg
Different.
48:53.95
Doomberg
Yeah, our overarching theme which is self-evident to us. But apparently is is sometimes lost on our political leaders is energy's life. Um, you know we have 2 tears for doomberg. We have our articles and then we have protein and our protester gets a monthly.
49:45.88
cactus chu
Susan.
49:33.85
Doomberg
Zoom Zoom call as we call it and um, ah, which is a fixed presentation and then a lengthy q and a and sometimes we'll have guests on and so on and we did our none doom Zoom last month and it was on this exact topic which is you know energy the economy and currencies energy is life. Um, thermodynamics physics is just fundamental laws of the universe and one of the fundamental laws of the universe. The none law of thermodynamics is that disorder is spontaneous. Um, and what that means is every closed system dissipates to you know more disorder. And your standard of living is literally defined by how much heat you get to waste because it takes wasted heat to impose order on your local environment temporarily and how much order you get to impose on your local environment is a literal definition of your standard of living and. All humans everywhere want a higher standard of living and so energy is life and harnessing energy is the definition of gp it like the we we call it. Cash-based accounting of energy. So. The amount of energy you get to harness this year defines how much standard of living you get to distribute to the population now depending on the economic model you impose in order to transact it. Different outcomes and so for example, we have a huge disparity in equality right now in the western developing world that western developed world. Um, and so what that means is like for many people. Perhaps. More pronounced in the developing world the daily struggle to achieve the none base of the pyramid of maslov's hierarchy of needs defines their existence freshwater housing clothing food health um energy defines that and so. There's a reason why societies go from burning wood to burning coal to burning oil to burning natural gas to nuclear energy. It's called energy return and energy invested and we laid all this out in a very early piece called wire cows sacred and cows are sacred because they're essentially the none.
54:31.18
cactus chu
No, yes.
54:30.57
Doomberg
Solar powered rechargeable battery. They eat grass that humans can't eat and they convert that grass to the chemical energy that has been stored through the miracle of photosynthesis which takes irradiation from the sun and creates light life. Energy and convert it into milk and humans can consume cow milk and they can preserve that energy in the form of cheese and then when the rechargeable battery has exhausted itself and can no longer be recharged the terminal value of the cow is the bounty of meat that it provides upon its slaughter and so. The reason why cows are sacred is because they have enabled humans to harness more of the sun's energy to live a better life and so you know energy is life and we've gotten energy terribly wrong? Um, politically which is sure.
56:21.82
cactus chu
Yeah I guess that leads us to our next question which is ah why is gas so high I know you've answered this a lot. Ah, let's say gasoline. Let's take gasoline First we can do and natural gas after.
56:22.71
Doomberg
Which gas are you referring to, gasoline or natural gas? Yeah gasoline is a refined product of oil and oil is in short supply. So because of the vilification of the Fossil Fuel industry by the ESG movement and in particular their effectiveness in choking off access to finances to both maintain existing infrastructure and to explore and develop New. Um. All fields. There is a chronic shortage of this life producing energy and the price elasticity of demand for life is elastic and so the question boils down to Um. Can afford to pay it and and this is why we're seeing an exacerbation of Income inequality because you know whatever the price of gasoline is is an so a point of observation for me, but it's not affecting my lifestyle but it's literally life or death for a whole slug of people on the planet and so gas. Is high because we have underinvested in the Fossil Fuel sector in the name of quote unquote saving the planet for who we might ask but nonetheless the esg movement is an anti is predominantly an anti-human movement when you break it down to its core. Um, because without energy. You have no life and so the absence of life is death and the absence of energy is the absence of life and so we have chronicled the follies of our elected political class. Not a few of them are actually elected, which is a whole other issue. Um, and so the laws of physics dictate that the GDP growth of society can be limited by the energy it can harness and if you attack sources of Energy. You are necessarily inhibiting economic development. Of your society which manifests itself predominantly and primarily in those who are at least able to adapt and this is why we're seeing in the developing world already food Riots social disorder and total breakdown of economic structures. Um, and.
01:01:31.98
cactus chu
Right? I think that 1 interesting frame of this is to look at things through higher energy versus low energy environmentalism right? because essentially one of the big fights within the kind of left that I'm kind of just like looking at right now in the United States
01:01:24.95
Doomberg
Unfortunately, it's just the beginning. Yeah.
01:02:10.22
cactus chu
Is over using Nepa or over overturning nepa. Not even for drilling projects or something like that but simply for clean Energy. So, like , let's use something. Let's use some other term for it if you want but essentially basically you have this kind of low energy environment. Environmentalists who pass these kinds of absurd ah regulations and now it's not just getting in the way of drilling but it's getting in the way of people who want to build solar Panels. It's getting in the way of the wind and and even if you're more skeptical of this.. There's kind of this.. There's kind of this real divide between. Think of people who you might still think are wrong, but who want to maintain the same quality of life through supplementing energy or replacing energy. Um, and people who I think are are just completely ignorant on the kind of costs that they're inflicting on the general population at.
01:03:47.75
Doomberg
Yeah, it's.
01:04:07.00
cactus chu
And so I really want to get your kind of understanding of this because you are the kind of domain expert here. I think where is the kind of where is the kind of bottleneck happening where is the kind of like what is the root cause of this kind of acceptance of Just. Decline in decadence. I think maybe this is because my family is an immigrant family but I think it's just completely unacceptable for the west to take such a position.
01:04:51.10
Doomberg
Yeah, so I said something earlier that may sound flippant but it is anything but which is if you deduce it down to its core. There's an anti human element of the most extreme and loudest environmental voices on the far left. Um.
01:05:38.32
cactus chu
Yeah, you don't even have to kind of look very far for this right? you had you had this kind of article actually that was critiquing this movement in the atlantic right? I'll put in the show notes that this is the anti-human ideology or something like that.
01:05:30.63
Doomberg
And yeah, um. Yeah, um, and their fundamental belief is that all human impact is bad on the planet and that in a way humans are a cancer on nature that we can't be trusted.
01:06:15.66
cactus chu
And
01:06:22.10
Doomberg
We don't deserve to flourish. Um, and unfortunately um through effective you know disinformation campaigns and um, they've they've scared people I would say that um. Feeling guilty about your standard of living is a luxury of the rich. Yeah um, what.
01:07:18.46
cactus chu
I Don't even think that that's true though I don't think they've been very effective at changing the public opinion on these things at all.
01:07:16.99
Doomberg
Oh you'd be surprised I mean I well I think they have shaped There's a whole swath of people that when presented with the consequences would change their mind but those people are unaware and have been sold something that isn't true which is that there is an easy path. To end our reliance on fossil fuels that is only being held up by greedy old companies looking to line their pockets with profits. Yeah um, and in reality the physics would say it's impossible like John Kerry is out today talking about. Some outlandish objective is to increase the number of electric vehicles in the US by a factor of 20. Where is the lithium going to come from, where is the cobalt going to come, where is the nickel going to come from. Where's the diesel going to come from to power all of those mines that's going to produce this bounty of metals that are needed to catalyze the good, the so-called green. Electric vehicle transition. It's literal bullshit. Um, and he is a czar, an appointed czar that flies around the world in a private jet and lectures to poor people everywhere? How um how they should be getting by with less energy who the hell is John Carey and why does his opinion count.
01:09:47.80
cactus chu
Yeah, it's just so it's also transparent to like why did they call him a sa that that was that's just like comedy. It's out of love.
01:09:38.91
Doomberg
Great question.
01:09:53.83
Doomberg
Orwell couldn't orwell was that orwell was a piker I mean he couldn't have you know this? We live in amazing times and you know of course we're passionate about this because we understand from a physics perspective where this has to end. It ends in death and starvation and unneeded suffering. Um and it's just you know it's frustrating because we're going to have to get there and like what we're seeing sri lanka today you know the country's collapsing. Um, so yeah.
01:10:59.62
cactus chu
Yeah, and a very interesting thought that I had that I was communicating when I was talking to Samo Buria on this podcast or sorry an interesting thought that he had is that this is basically the justification of poverty right. This is a kind of post hoc ideology that is justifying poverty because we're dealing with a kind of bureaucracy that is unable to steer us towards a different destination. That's kind of the idea.
01:11:48.65
Doomberg
Um.
01:12:09.42
cactus chu
If you just compare Europe relative to the United States, I know you agree with this that actually the circumstances are much worse in Europe in terms of energy, especially now. But even before ah that there is this kind of base. Incompetence and we'll we'll get to why that incompetence exists later in this conversation. But there's this kind of base incompetence in the kind of bureaucrat middle manager class which means in practice that they do not know which buttons to push in order to go from our current gas price to like. Pre prewar gas prices right? They do not know what buttons to push, they are just systematically incapable of getting there and really what I think this is and as I said this idea is originally from samo is that this is kind of a narrative hedge right. The thing that I added onto this is that you see this type of hedging everywhere that you see this as a political archetype really, you can see it in the 2008 financial crisis or in the past financial crisis leading up to it where people were saying oh it's the era of growth and then after that. Oh. We've gotten rid of risks and volatility. We can't say people will think we're lying if we say there's an era of growth now. So we've gotten rid of volatility and then 2008 happened of course they were lying again and then now what they're saying oh it's more like secular stagnation. It's all it's actually like. Okay, all of the productivity's gone but we're kind of like we're kind of like stable here and so you should still be going into into stocks and there's no there's no better alternative here and you can see this kind of hedging take place where they're formulating these kind of more and more inevitable these kind of like external actor kind of narratives because. They themselves are incompetent and the primary reason for this is to kind of protect themselves from accountability.
01:15:38.23
Doomberg
Yeah, you know, just one second I'm gonna cough. So sorry I have something stuck in my throat. You'll have to take that out. Um, in edit. So yeah, um, when we ponder history sometimes history is unbelievable to read right? So um. Stalin's collectivism led to you know what 4000000 dead I believe or the great leap forward. You know by Mao all of these were driven by sincere beliefs in ideology and somehow these horrific means justifying.
01:16:35.58
cactus chu
Um.
01:16:54.15
Doomberg
So that these utopian ends justify these horrific means. Um and I just these things happened and so therefore they could happen again and in a way the echoes of the fallacies of the philosophies. At the heart of those easy to make fun of episodes now or to assume they can never happen again. Yeah, we see them again. There's this, you know, this catastrophe driven mindset of sure a None people will starve but we're going to quote unquote save the planet. Whatever the hell that means. Um, it's incredible to see it play out in real time and it's like a look. There's going to come a time and that time is measured in years not decades where this conversation will be censored because we are going to be labeled as disinformationist and deniers. Um, and so. We're steeled for that and we're ready for that. But it's coming like this is until something is done about it. This is the trajectory that we're on and it's unthinkable. Five years ago people could question the policy of, you know, national health. Vis-a-vis vaccines and doctors being deleted on Twitter for their opinions like for their opinions and now we just accept that. That's just certain topics. You're not quite allowed to opine about it even if you believe you're right and data is on your side. We're heading very quickly. A phase where debating climate science which is quote um I put in quotes is going to be off limits you either accept what our overlords have decided for you or you shut up and that's coming.
01:20:49.82
cactus chu
I Don't think that's I don't know because I think that especially with the current kind of reality striking back. This isn't yeah that I don't think that case is really defensible anymore even in the kind of.
01:21:01.99
Doomberg
They're going to double down there. Wow cool.
01:21:29.40
cactus chu
Elite institutions right? I don't think that in that case we actually don't have to worry about trade-offs, that we just have to implement these policies and not and just press the button without thinking like that is clearly in and of itself. Not sustainable. And maybe they're going to add another layer of Narrative Hedge. Maybe they're going to say oh we're always going to have this economic decline but I really don't think anyone is going to believe them and if they try I don't know like it or like or just like and I'll be clear like I'm I like quiet pro Vaccines right? I think the vaccine.
01:22:04.55
Doomberg
The people who did.
01:22:35.34
cactus chu
And is like very effective in preventing kind of deaths and such like that. But um, like it or not, public opinion Overall is still overwhelmingly on the side of the kind of Pro-vaccine argument, right? You do have to have at least a bit of social consensus in order to enforce them. Ah, positions like that. Even though if I I would agree with you that the position that you should allow different sides of debate is kind of more morally correct in my view you still when you're talking about what you're kind of attacking what kind of Speech you're attacking public opinion does matter in that case and I don't think that this kind of like.
01:23:28.11
Doomberg
Yes, since.
01:23:49.50
cactus chu
Climate Maximalist Narrative I just came up with right now they are quite similar to bitcoin maximalists in a way I do think that kind of climate maximal Narrative is just not going to hold anymore like it. It's just impossible.
01:23:56.33
Doomberg
Yeah, so let me be very clear. Ah every adult on the Duber team has been vaccinated. It's not about the topic. It's about the censorship of the topic and I would defend people's right to express their opinions and to not get a vaccine.
01:24:28.64
cactus chu
Exactly.
01:24:35.91
Doomberg
You know you can be. You could believe that the vaccines are reasonably effective against hedging the worst possible outcomes and also believe that people who do not want to get a vaccine have a right to not get None um and you can also believe that the desire. To minimize humans impact on the planet is a good thing but it also needs to be weighed against how much you know life. We're willing to distribute it to the humans that exist on the planet. Um my fear and my strong belief is that we are heading down a path. Irreversibly of increasing control and censorship by unelected and unaccountable global technology companies for example, um, like we we are susceptible to many nodes right now as doomberg like we obviously. Substtack and our payment processor and our banks like all this can be turned off yeah with a flick of a switch and we would have no recourse. We don't have a right to do these things today and so if we wrote something that people found objectionable. We could be canceled. Um.
01:26:51.30
cactus chu
M.
01:27:08.95
Doomberg
And this is totally opposite to the us freedom of speech mindset and the speed with which people are comfortable canceling people that they disagree with is scary and it's Orwellian and just they're going to double down. Like Europe is going to continue making idiotic choices on energy and if people need to starve at the sacrifice of their religion then they will starve because this is what religions do and so i.
01:28:20.72
cactus chu
Right? And we've been talking in kind of abstract philosophical terms for a bit. So let's kind of switch back to the kind of Doomberg classic in terms of the kind of analysis of what's actually happening on the ground and you talk about people starving and.
01:28:23.19
Doomberg
Listen.
01:28:51.82
cactus chu
I Do want to be clear. I've heard you on kind of other appearances . I've read your ah newsletters . This is not a joke right? So what exactly is happening with food around the world right now.
01:29:00.87
Doomberg
So you can think of the production of food and farming as the operation of a factory. It has inputs the manner and efficiency with which you manipulate those inputs and convert them into the final product matters.
01:29:27.60
cactus chu
M.
01:29:39.33
Doomberg
And the amount of the final product. You can produce it. It's bounded by the inputs the amount that you need in order to maintain human existence multiplied by the number of people on the planet is also knowable when you. Measure both of those today. There's a shortage, we will not be producing enough food and nor will we be able to distribute enough food. Um for the number of people on the planet that we have today to survive the path function from. Knowing that to realize that is hard to predict but it is conclusively proven given the shortfall in inputs and the skyrocketing price of inputs which is going to affect yields and going to effect.
01:31:45.34
cactus chu
And what does that mean? What does that Shortfall Inputs look like? Let's really get into the weeds here.
01:31:36.43
Doomberg
Um, sure so you know in order to grow food. You need fertilizer in order to protect a field from weeds you need herbicides and in order to protect a field from insects you need fungicides. Um, the skyrocketing cross cost of energy is causing the costs of all of those things to explode which is causing less sophisticated farmers in the developing world to be unable to afford fertilizer or herbicides or fungicides. And it's just impossible that that won't manifest itself in lower yields in future harvests and the world has an inventory of food that's measured in weeks. Um, and it's a rare thing that, um, harvest wasn't the biggest part of the year for humans. Like this is a rare time in the long arc of human history that we didn't literally live and die by the quality of the harvests we're about to reenter such a period because of our bundling of our energy policy so you can't make fertilizer without energy. You can't make herbicides and fungicides without energy. Um, and so because of the european energy crisis fertilizer plants in europe became grossly disadvantaged and stopped producing that energy crisis bled into China at least temporarily as europe and and um. China and Korea and Japan were bidding against each other for the incremental boatload of liquefied natural gas and so you know China halted the exports of phosphates which are currently being used to make batteries for electric vehicles instead of being used as fertilizers in the field which is a perversion of. Environmentalism that I can't quite wrap my brain around. Um as we predicted in a piece we wrote back in October called starvation diet um, the rolling series of protectionist policies will eventually lead to economic vapor lock and war. And of course war did break out and potash. You know 40% of the world's potash is produced in Belarus and Belarus and that's you know being sanctioned and so yeah, when you add it all up like there's a diesel shortage. We just wrote a piece called grim diesel because of.
01:36:49.90
cactus chu
M.
01:36:43.29
Doomberg
Natural gas is used in the refining of oil to make diesel and natural gas prices in Europe cause refiners there to stop making diesel and that led to a shortage and diesel is used to power the tractors and to ship the grains on the rail line and to truck the food from. Factory to the grocery store and all that is in serious jeopardy today now. Our belief is that the US will set the clearing price. We will bail out farmers that need it. We will provide economic stimulus for those less fortunate and we will pay the clearing price to get whatever it is. We need to maintain our current lofty, excessive standard of living. Um, and that will only serve to export food inflation to the rest of the world who are least capable of paying it and we're seeing that play out today. So I mean in Sri Lanka as a country went down a disastrous path of pushing organic farming at a rate that was unsustainable and. None harvest and you know here we are the country's falling apart for those who are inll I mean it's literally a fertilizer riot. Um, because they ban the import of fertilizers and herbicides glyphosate. Um, great.
01:38:50.18
cactus chu
Yeah, the rice riots right? Oh I see.
01:39:08.15
Doomberg
Podcast on Chris key for show decouple that that captures this you know the guest name escapes me as I'm talking now. But if you go to the decouple podcast. His latest episode is on the background of the Sri lankan disaster. These stories are going to pop up randomly. Who knows which country's next ? But the laws of physics dictate that we do not have enough input to produce enough food to feed the people we have on the planet today that's unfortunate because we have such a bounty of energy and such technical know-how to harness it that this is literally a choice of incompetence. Um, and because these people aren't sitting next to the leaders who have decided on these disastrous policies. They're perhaps easier to um to close your eyes and assume it's not happening or that's just happening over there. We refer to that phenomenon as the. Proximity effect of empathy and so they're starving over There is not my fault is how people rationalize this exactly? Yeah, exactly.
01:41:12.40
cactus chu
M.
01:41:25.48
cactus chu
Yeah, and you're not accountable to them right? You don't you don't lose your position of power if they're if they're the None starving um, an interesting, an interesting kind of side player here is the issue of trade right? and there are kind of None dueling narratives here 1 is the kind of populous sogger and jetty kind of narrative of oh we internationalized our supply chains too much and now now that there's been disruptions now that there's disruption in one area of the country or one area of the world. Sorry it's where the kind of pros are coming home to roost. Um, but. Another narrative is that we kind of don't do globalization enough right? That's kind of like the story behind the baby formula. We have all these excessive like absurd regulations literally not even about the quality but about the labels and about the kind of specifications and now the United States doesn't have enough baby formula. Well Mexico canada. Um, Europe has plenty. Um, so what? What do you think is the kind of throughline here? Do you think that there's too much trade or there's not enough.
01:43:20.30
Doomberg
Um, I would say the imbalances of trade that exist today and the deindustrialization of the US in particular lay bare the fallacy that Luke Groman has done so much good work on that. That the US dollar reserve system and then you know the US Dollar reserve reserve currency and treasury bills as the reserve assets is a system that cannot continue. Um, the fact that we have so much debt. Which is needed because these excess reserves of the energy producing countries need to go somewhere, forcing the deindustrialization of the US and so the manufacturing base in the US became uncompetitive because the dollar was too strong. And um, that is a national security issue. There's sort of a tug of war between sort of wall street and the department of defense on what you have sort of what we would call financialization of manufacturing and outsourcing and and all of those things and because just note. Doubt that we have ah 4 too long um, sacrificed robustness for efficiency or at least in the name of efficiency in our supply chains and and the managerial class which you referred to again earlier has been rewarded and it's a fascinating thing you know Ben Hunt has written about this quite a bit that the epsilon theory when you compensate. Middle management with options. Volatility is desirable because the black shells theory would say that volatility increases the value of your options and so especially if you're getting a steady series of options. You know, annually and so it's all sort of mixed into the same problem. There is going to have to be a reset. Um. There is going to be this pivot. It's almost cliche now to say from just in time to just in case which is highly highly inflationary and there is going to be an onsoring but there can't be a true onsoring and domesticification of manufacturing until um.
01:47:24.52
cactus chu
Um, he.
01:47:37.31
Doomberg
The US dollar is no longer the reserve asset at least t bills are not you know tre because of the it's a very controversial topic and probably worthy of its own show and we're not the most qualified to opine on it. There's an ongoing debate between.
01:47:58.12
cactus chu
Really Why do you say that?
01:48:15.27
Doomberg
You know, um, Luke Roman and and you know Brett Johnson of Santiago Capital on Twitter which you can find and follow and we do and it's fascinating. But we tend to follow in the Luke Roman camp we're subscribers to his research. Ultimately, the reason why? um. Manufacturing left the US because it was quite cheaper to do it offshore. Um, that's a relative measure and a key input into that measure is the strength of your currency. So. There's a reason why countries.
01:49:28.46
cactus chu
Wait wait wait there. There's so much. There's so much going on there right? I don't think that's the case at all. But sorry sorry continue I shouldn't have interrupted you continue and make the case change my mind.
01:49:33.37
Doomberg
Let's say I lived it? Yes Well I mean I lived it as an executive and I saw the pressure from Wall Street to offshore. Let's just give you a great example. Um that which we've written about the solar industry which we were.
01:50:16.00
cactus chu
Or I mean like why? Why is it based on the value of the currency or like primarily based on the value of the currency?
01:50:06.63
Doomberg
Active participants. Well what defines cheaper right? And so there's a reason why countries devalue their currency when they get too strong because it protects their manufacturers like this is economics. What I want. It's not a controversial point I don't think.
01:50:44.20
cactus chu
I think that's a tool but I don't think that's the primary defining attribute. I think the primary defining attribute is the value of labor in that country and there's None of things that go into that. Um, there's regulations of course and there's also just like ricardian efficiency right? You have people in the west who can take None of the others.
01:50:55.41
Doomberg
Sharp short. But
01:51:23.20
cactus chu
Ah, other jobs that pay more and so you have this kind of like up you have this kind of upar and manufacturing costs whereas people who really like don't even have anything have anything ah better to do. Are going to be working for less in other countries. Plus they have less regulation. However, you feel that. Maybe you think that this means their workers are more likely to be mistreated. Maybe you think that. This means that they're just working more efficiently right depending on which side of the political Aisle. You're on but they have an advantage from that as well, right? It's not just like it's not just like a currency thing I think.
01:52:15.95
Doomberg
Yeah, well there is no one answer that explains all the variability that we see but the generalized statement of stronger currency means less competitive manufacturing bases just undeniable even for high value added manufacturing. Um.
01:52:57.60
cactus chu
Okay I think that that's true like correlationally but I don't think like that's the primary I just don't think that's the primary determinant right? So for example, if we let's say we just had like ah we just and of course there's a matter of degree here. But what? what would be easier. Getting some more onsoring through kind of through kind of having a strict fed and really controlling currency inflation and having a stronger currency versus really enabling removing some of the red tape enabling some of the local development. And maybe even loosening up some of those labor standards like maybe that like it is and as you said before they're much kind of better subject experts to defer this to as well. I hope to have Brian Kaplan on for example, but this is not necessarily like.
01:53:58.69
Doomberg
Sure.
01:54:30.11
Doomberg
So the the the so well so the percent of the variance that strong currency explains is not insignificant is my point. Um, all of the other factors that you describe certainly are.
01:54:46.88
cactus chu
I Don't know. I think that this is just a kind of over-explanation going on here.
01:55:06.33
Doomberg
Real and there's a few others that I would add to that pile not the least of which is the misappropriation of value that we have placed on efficiency over redundancy. Um, and so.
01:55:22.18
cactus chu
Okay.
01:55:43.50
cactus chu
Efficiency over. Okay, that's very interesting. Go on.
01:55:41.59
Doomberg
Right? So companies for decades were rewarded on just in time Lean efficiency and you know there's an old joke in the engineering world which is it only takes one zero in a geometric mean to know what the answer is and so we have underpriced risk.
01:56:26.18
cactus chu
You just explain what that means to the audience. Yeah, basically like you you multiply a bunch of numbers together if one of them is 0 everything fails.
01:56:16.61
Doomberg
Um, which oh it's it's what it's it's a nerd joke and so yeah, correct and so um. You know the the whole pricing of risk and so Jim Grant in particular at interest rate observe grants rate observer would say that by manipulating interest rates. We have fundamentally perverted the pricing of risk which necessarily ends up in the blowing of bubbles and collapses and shocks and things that we've observed um and so. As ah as a corporate executive at a publicly traded company I can assure you that we were forced to compete against and were measured by how we competed against chinese companies that had unfair local advantages and and the most. The easiest example to explain and one that should annoy environmentalists is how we almost completely cded the entire polysilicon market to China. The US used to be a substantial producer of poly silicon which is needed to make solar panels and the chinese. Used a combination of slave labor and cheap call to flood the world with artificially cheap solar panels that put western companies out of business and if you were a publicly traded company that had a poly silicon arm. You were punished by wall street because you were going to lose money and. We had poor policies in the us that protect against that like you say policy and labor and all those of but like very pro- labor or I'm very pro like I and I for example I I one of the things that China does a lot and did a lot and personally impacted businesses that I was a member of was they stole intellectual property. So we we would literally have.
01:59:32.90
cactus chu
10
01:59:59.14
cactus chu
Me.
01:59:52.11
Doomberg
Our inventions show up as a competing bid at high profile companies that you would know and the procurement teams will look at us and say well you got to cut your price by 40% because we have ah we have a competitive over here. That's 40% cheaper than you and we would look at them and we would say but they stole our technology and we're suing them and it is unethical for you to accept stolen goods. As a bid and we're not going to meet that bid and they say yeah well that's for the courts to decide and so you lose the business. That's how you end up with a carving out of Us manufacturing which is the strength of the currency as a key input into it. It explains a fair bit of the variance. It doesn't explain all of it. Um.
02:00:49.92
cactus chu
Um.
02:01:03.85
Doomberg
But the the combination of those factors. The underpricing of risk, the desire for efficiency and quarterly you know quarterly your quarterly reporting of your profits and loss as a corporation should be almost irrelevant but it's the most relevant thing that determines the stock price which determines your compensation for the year which determines. Incentives which determines the behavior. Um, and so the the covid pandemic and now the energy crisis will eventually lay bear the fallacy of the organizing systems of economics that we have operated under and hopefully will be the genesis of improved. Operating procedures on a go for basis. But yeah, the us dollar is is as the reserve currency is a headwin to the onsoring of critical supply chains and that.
02:02:54.12
cactus chu
Yeah, you mentioned a point there that I think is very interesting and that I actually am very interested to discuss with you. Which is this kind of short term, this kind of short termism right? that I think there is a fundamental asymmetry here which is. Basically that the short termism kind of makes sense from an investment perspective right? because even if you're making a decision. That's not necessarily good in the long term. You can kind of like increase the company value temporarily and then kind of flip the trade and then go somewhere else with your money and that is actually like very. Very destructive even if it's good for the investor right? Um, So do you have any clues on how we fix that kind of asymmetry or whether it's a problem at all if you would say that I see yes private companies don't have.
02:04:16.69
Doomberg
It's a huge problem and it's why we only invest effectively and only invest privately. Um, there's fewer and fewer public companies actually um in part because um, you know, but I view.
02:04:45.80
cactus chu
This problem? yeah.
02:04:51.69
Doomberg
Publicly traded companies as exit liquidity for founders and and and and early stage investors right? And so I yeah but it's sure. Um, but I would say one of the things I've said.
02:05:15.24
cactus chu
Yeah I mean sometimes you just need the cash right.
02:05:24.47
Doomberg
Many appearances we earn money in Fiat. We save by buying real assets and we invest privately where we can affect the outcome so we can actually participate in the value creation leveraging our skills, our network and our ability to fundraise and things like that. Um, and so but also part of it is because. Um, you can make decisions in a private setting with a bit of a longer term Horizon you can Decide. We're going to Burn Cash for None instead of 2 because if we burn cash for None and we have access to stable funding. The payoff will be 50 times better than if we run cash constrained after only 2 cores. Those are real calculations that you can make as a private enterprise that you can't make as a publicly traded company. There are many great things about publicly traded companies. Um. And there's lots of controversy around why it is that only accredited investors can invest privately and so on and so on and so on. I understand all of those things but given the suite of choices available to us we are.
02:07:36.90
cactus chu
M.
02:07:48.11
Doomberg
As you could probably deduce pro robustness in our own lives and I'm a big believer in the prepared and preparedness mindset and to hedge against tail risks and to yeah yeah, sure I'm ah that yeah I'm at the.
02:08:03.80
cactus chu
Yeah, yeah.
02:08:21.82
cactus chu
Oh yeah, you can say prepping on this show like my audience won't be against that. Ah yeah, yeah, do you know? who do you know Bj Campbell is the writer of hand waving freak outery he I think his episode is actually coming out.
02:08:24.83
Doomberg
Um, I'm a defensive pessimist. You know if you can hedge a get if you could hedge against the worst case scenario I do not okay.
02:09:01.76
cactus chu
The week after we are recording this? Ah, but basically he writes a similar case as well where he talks about all these kinds of tail risks that could occur and like if you're someone who's relatively high income like it. It just makes sense. Ah, make sure that if there is indeed a shortage or something like that that you have you have food for yourself. You have food for your family and so on and so forth right.
02:09:36.75
Doomberg
But the way I phrase it is I pay home insurance right? every year monthly? Whatever um, let's say I pay I don't know $2000 a year for home insurance. Whatever the number is um when the year
02:10:02.80
cactus chu
Yes.
02:10:15.61
Doomberg
Comes in a calendar turn I don't bemoan the fact that my house didn't burn down right? Um I I pay for house insurance under the hope and the expectation that I will never need it. I don't need to actually buy house insurance because I.
02:10:39.88
cactus chu
Ah, how tragic.
02:10:52.19
Doomberg
As you could probably guess I'm not a big debt person. So um, and so I could in theory not carry home and homeowner's insurance on my house I do and I'm happy to pay it and I'm happy to hedge against that tail risk of showing up and seeing my house on fire or you know.
02:11:33.20
cactus chu
Yeah.
02:11:30.11
Doomberg
Somehow destroyed through some natural calamity. Although not that I would ever buy a house in air that had a high potential for natural calamity. Um, and so it's the same way with prepping. Um, I don't want to live in a world where I need to be self-sufficient for a year. Because that world is probably not a very pleasant place to live in but it's foolish not to be if you can afford it so I'm not judging those who can't it be foolish not to hedge against tail risk for two weeks or thirty days some reasonable amount of time to bridge yourself through. 99% of the tail risk that you might be taking and not even knowing it you know I'd like if you analyze your home as a factory There's sort of 4 main inputs and None main outputs and and I have a plan for losing those. So the inputs are electricity and water.
02:13:02.30
cactus chu
M.
02:13:19.19
Doomberg
Natural gas and goods and services. You know the Amazon man and the outputs are garbage and human waste and there's a flow and that my factory produces the health and well-being of myself and my wife and my children. Um and as a. As an owner operator of that factory you know and in partnership with my wife um and my closest friends and their families I feel a deep responsibility to ensure that I have redundancy plans for all 6 of those key flows.
02:14:11.56
cactus chu
I
02:14:39.78
cactus chu
Um, yeah I think that kind of yeah, that's just kind of mathematical case tends to make sense to me I don't know if this is just particularly kind of a particular kind of, um, relatively kind of high income discussion. But I don't know how. It gets harder to make the same calculation if you don't have as many resources right? But yeah.
02:15:12.25
Doomberg
And if you live off the land I think you store extra wood you know you put some food in the cellar in ah in the you know like you I think the preparedness mindset actually was far more common when people had less because they understood the consequences of being stocked out were death.
02:15:51.20
cactus chu
Who? Yeah, and the risk was also higher than I think oh really.
02:15:49.59
Doomberg
Um, and so I think quite the reverse. Well, That's my point. Yes I think the reverse has happened which is as we've become wealthier. We have become more arrogant about just assuming the magic of supply chains would never stop. Um, the vast majority of our peers have less than a week of food. In their dwelling. Um, they just go to the grocery store when they want to buy food. They used to be that everyone would prepare for the winter right? like that was a generation ago maybe 2 at most. Yeah.
02:17:08.78
cactus chu
Yeah, but that's kind of what I'm saying right? like every winter there would be a very high risk of shortages whereas now we can kind of I mean you can say falsely or not but I think at least like relatively we are more secure right? relative to them individually How my.
02:17:08.70
Doomberg
Yeah.
02:17:18.81
Doomberg
Ah, well let's see how the world does next. Harvest yeah.
02:17:47.20
cactus chu
Yeah, so you talked about the US bailing out farmers and essentially kind of making everyone whole right? Like why do you? Um what? What's their kind of model of that happening? What's a kind of model of the political circumstances that will see in like a year or 2
02:17:55.35
Doomberg
Well I should say for this season. There will be no need for a bailout because us farmers, many of whom pre-bot fertilizer and or hedged , are going to make an enormous amount of money at these prices. Yeah, um.
02:18:36.28
cactus chu
Oh great.
02:18:32.50
Doomberg
But if they did need it. They would get it and the unbroken history of that occurring is just undeniable right? And so the farmer's lobby is strong and strong. It's great. Love nothing more than a robust and strong farming sector because that is a key pillar of the entire economy.
02:19:12.63
cactus chu
Yes, not starving is great.
02:19:07.12
Doomberg
Correct, I'll take it. You know you have this a little bit of waste or graft or you know grift or you know fine like just make sure that there's food I'll be happy for it. But the the real damage this year is going to be in the developing world and then we'll see how us farmers do next year
02:19:35.70
cactus chu
The.
02:19:44.33
Doomberg
If these fertilizer prices remain so robust and if diesel is in such short supply and all the factors we outlined in a piece called farmers on the brink continue to manifest itself then then the US will of course bail out farmers as they have always done and so this is just. And Axiom of us economics.
02:20:35.92
cactus chu
And how do you think in general the 2 political parties are going to deal with this with the supply chain crisis with oil interface. We haven't seen much of anything right? was what you expected before like what you predicted and what you predicted in the future.
02:20:48.89
Doomberg
Yeah I don't see very much difference between the two parties. They're both characterized by an odd combination of corruption and incompetence and and feel like you know when you have the speaker of the house day trading.
02:21:13.78
cactus chu
M.
02:21:27.15
Doomberg
Call options in the companies that have legislation before her or whether you know the house the senate minority leader wife is knee deep and chinese corruption. Um, it is all sort of the unit party system of Washington DC against the rest of the country and so I'm quite pessimistic about it.
02:21:40.74
cactus chu
Cronya.
02:22:06.15
Doomberg
Um, any potential change in that regard. So yeah.
02:22:25.28
cactus chu
Maybe this is taking you into my territory now but like why do you think that is how we did? How do we get here?
02:22:26.11
Doomberg
Slowly and then all of a sudden I would say that you know the incre. Yeah I'd say the ethical incrementalism you know of has become acceptable or you know what things that would.
02:22:47.84
cactus chu
Slowly we and all of a sudden. We've become politically bankrupt.
02:23:03.27
Doomberg
Normally causing a politician to resign has become survivable and so then that just teaches that boundaries can be pushed um and they push them and so another problem is of course once you make it personally. Almost impossible to run for public office without running through a gauntlet of destructive attacks on your life and the people in it. Um, you end up distilling a certain type of person who is willing to go through that gauntlet and that it distills a certain psychopathy. Um. Because the prize must be worth it for them to go through that and so once they get there. They feel like they're entitled to the grift and to wedding their beak on the backs of the public and so that's what happens you have this spiral of capable honorable people. Don't go into politics. Why would they? it's more lucrative not to and it's more destructive to do so and so the most competent people I know are out starting a company or working in large companies and being entrepreneurs and and so you end up with the leaders that we have which are totally corrupt. Um, I mean I don't think that's a controversial statement to say that most of Dc is corrupt right? I mean if I don't I don't think changing parties in the next election is going to bend the curve that we're on. So.
02:25:56.70
cactus chu
Yeah.
02:26:11.64
cactus chu
Yeah, but how is the political system in general going to react right? are they just going to keep letting things get worse like what is actually going to happen right? and I know it's hard to make predictions but like and that's the fun in it right.
02:26:24.67
Doomberg
I mean here versus the rest of the world of course are 2 different answers. Um yeah I don't know. Yeah, it's a chaotic system right? and so you feel sensitively dependent on initial conditions. We had this event on January sixth
02:26:46.20
cactus chu
Ah, yeah in the United States let's just focus on the United States for now. Um, yeah.
02:27:03.35
Doomberg
Um, which is startling and shocking right? and this whole swath of the country. For example, they think the last election wasn't legitimate. There's that's not healthy either way whether it was or it wasn't um, the the.
02:27:46.60
cactus chu
Yeah, and it's just kind of like crazy right? The thing that I've talked about like.
02:27:42.65
Doomberg
It's just if you just take a step back? Yeah and say like this is not healthy either way like you can say one side is wrong but that it exists is a priori unhealthy they would just agree on that and um and then also there is this one of the things I'm fascinated by is this.
02:28:14.28
cactus chu
Yes.
02:28:19.50
Doomberg
This cult mindset that we see I have a hunch we haven't written about it. It's one of these ideas for a piece that's percolating until you find the right reason to write about it. They like to take the collapse of Luna not to like totally change things. But I think there's ah, there's a lesson embedded in that.
02:28:55.40
cactus chu
With that.
02:28:54.99
Doomberg
Is a community aspect to all of these. It's a it's um yeah, it's ah it's a a stablecoin ponzi scheme that collapsed on itself.
02:29:08.42
cactus chu
And just a quick interlude. What is Luna and just like ah kind of like a None sentence summary. Yeah, a lot of people were buying into this. Ah this company that claimed to be a currency that was always pegged to the Us dollar but was somehow also providing you dividends like what? what? Um ah.
02:29:33.53
Doomberg
Yeah, 20% yield yeah Yeah well there's some value being created in the Luna ecosystem and the anchor protocol was fake and all I'm not so I'm not I'm only telling you what they said I'm not telling you what was yeah but there was it. It's always very strong.
02:30:00.88
cactus chu
How is it being created? What is happening here? How yeah exactly that was kind of rhetorical. But yeah.
02:30:09.45
Doomberg
Community Mindsets and when you read the profiles of the people that lost all their money as the marginal investor in a ponzi scheme has to mathematically um these are smart people they could be professionals. They could be your neighbors and they got sucked into it. These cults and I wonder whether they just take you know that they're all kinds of communities that have very fervent beliefs and their allegiance are to those communities and not necessarily to the country and so there's a part of the impact of social media. And the classification of Anger. Um, you know that that sort of boxes people into various communities and there's a story there I haven't quite fully worked it out as you can tell because I'm sort of thinking about in real time I'll be talking to you? um. But there's a that we have become more susceptible to curated Information. So you know the confirmation bias that is accessible now where you can literally create echo chambers with None of other peoples. But the only opinions you ever hear are ones you agree with. Troubling and I think there's an input into our current situation that explains that is not yet sort of fully explored. I'm sure somebody has explored it. We haven't explored it yet.
02:33:05.30
cactus chu
Right? Yeah, you're going to love this so b J Campbell previous guest. He introduced me to this term erigor right? Um, which is an original and a cult term meaning basically the spirit that kind of that kind of like arises and controls a bunch of cultists. But
02:33:05.13
Doomberg
Okay.
02:33:45.24
cactus chu
Ah, is used in the kind of modern sense by Bj and others to talk about this kind of social media Phenomenon where people have kind of outsourced their thinking to their social media apps. So you have people, this is the metaphor that he uses. I'm basically repeating it verbatim.
02:33:37.37
Doomberg
A hook.
02:34:18.36
cactus chu
But you have ah this should be some completely uncontroversial but you have people outsourcing their parts of their thinking to Google Maps right you you don't actually know how to get to a to b you turn on Google maps it does the thinking for you and and that actually social media this is kind of his argument that actually social media is the same thing but with morality and.
02:34:15.53
Doomberg
Yeah, yeah.
02:34:56.64
cactus chu
In many cases with truth so what? What do you do when you try to kind of come up with what is true about the world you consider ? You give their real sync. Maybe you dig into some analytics right? I'm talking about you personally here. But like what the normal person does, maybe they just like to go on their phone and check Twitter. Um. And Twitter can be used well and it can be used ah terribly and and a lot of people use it terribly a lot of people surround themselves with just a further and further ah in-group of people who who kind of repeat the same kind of platitudes that repeat the same kind of most emotionally salient things and that this creates this kind of. Ah, this really this kind of like group, this kind of hyper object of a group of people forming to become something that acts much more like a kind of biological organism right? that kind of acts like this one thing that is moving in unison.
02:36:28.63
Doomberg
I'll have to go back and listen because this is something that I've been meaning to write about for a while and and and and it is a topic that I I believe intuitively is real and I see it and and it's you know it's just take like the Emc Entertainment you know the eights.
02:37:10.80
cactus chu
Oh yes.
02:37:03.77
Doomberg
And which we've written about in poke some fun you know and and the violence of the response that we get when we write about Amc is like literal violence like written violence in the threat sense and things like that is staggering right? I mean like it's a freaking movie company that shows movies in a theater.
02:37:33.56
cactus chu
Oh I see okay.
02:37:42.61
Doomberg
Um, why are you writing threatening emails to a green chicken who wrote a slightly critical story about your cult. Um, and it's amazing right? It's yeah, it's so like it's a phenomenon that I think is and it sounds like your prior guest.
02:38:14.40
cactus chu
Well, you have the answer there right.
02:38:19.67
Doomberg
Ah, I studied it. It. It seems like it. It is accelerating and I don't know how that ends so you ask me about politics. You know there's a whole ecosystem of political beliefs and people who ascribe to them that. Um, both sides that you and I are completely unaware of because it never makes our Twitter feed and we're not in the Facebook group chat or the Discord chat or whatever and the chaotic nature of that nonlinear system. How it ultimately manifests itself is not knowable.
02:39:19.14
cactus chu
M.
02:39:30.53
Doomberg
But it can be disturbing like just because something is not specifically novel doesn't mean it isn't generalizable and bad. It's a wrong thread like we used to have proper debate like you're like you could you could debate somebody intellectually and occasionally change our mind. Um, if that's just. Coming less and less feels like it's becoming less and less possible. These days.
02:40:24.80
cactus chu
Right? And that's kind of like language that's very appealing to me but I'm just going to try to break it down for the audience right? So basically when you have these kinds of silos of ideas this means 2 things None it means that you have a worse outlook of the world around you which is bad enough. Ah by itself. But what's more is that you have these silos that are also separate from you so you can't detect them. You don't know what's happening, you don't know what power is building. You don't know what's coming, you don't know the kind of political ferment that's going on in circles. You have hidden yourself. Ah, and that is this could possibly be quite scary.
02:41:20.90
Doomberg
Yeah, absolutely like they'll all just show up in your front linen someday and you won't know why they're there. Um.
02:41:42.44
cactus chu
Yeah, and this is kind of this is especially the case against censorship right? or None of the cases against censorship. You want to know what your political opponents are saying you want to know even if they disagree with you even if you'd rather they not believe that you want to know what's happening you don't want to kind of. Low information environment where the changes are just sudden and drastic.
02:42:11.35
Doomberg
Yeah, our sort of phrase which we may have stolen from Grant Williams I forget where we learned it but do you know any view authentically held and politely expressed is at least worth listening to? um you know and and.
02:42:53.54
cactus chu
Yes.
02:42:50.57
Doomberg
Those 2 factors, those None descriptors are important, like it is authentically held and politely expressed. I don't need to listen to somebody who's yelling at me. Um, and I don't need to listen to somebody who is being deceptive but I'm. I am interested in listening to somebody who is expressing an authentically held view politely. For example, we had a very polite disagreement about the impact of currency on the outsourcing of our manufacturing . That's fine like I could. We could agree to disagree politely. We could express this from viewpoints. Maybe None of us changes our mind slightly and then we move on like that, but that's the literal definition of civil discourse and we just have less and less of that today and the outcome of that is not good. History would show that whenever you have.
02:44:46.84
cactus chu
Mm.
02:44:40.87
Doomberg
Um, you know the censoring of somebody based on their composition of their team jersey for example in the US you know, politics you know as long as they're on your team. They can get away with a lot. The outcome is that neither party will get in complete control. And um, and then take it out on their enemies and this is how you know dictatorships happen. So.
02:45:41.00
cactus chu
Right? And we should be very clear that there's a kind of pendulum effect as well, right? You don't know who wins the scramble on the very end when you raise the stakes. Everyone raises the stakes.
02:45:40.77
Doomberg
Well Ah, the whole point is yeah like whatever power you grab needs to be considered in the context of your worst political enemy having the same or worse power like this is this is why you have to be respectful of the institution like there's an erosion of the institutions in the country and and when you do.
02:46:10.10
cactus chu
M.
02:46:20.30
Doomberg
Such a thing historically at least the range of possible outcomes are less pleasant than the current circumstance.
02:46:42.10
cactus chu
Yeah I'd I'd also want to get your I'd also want to get your opinion on this as well. This is something that I think you have a deep insight to that I haven't really seen you that I haven't really seen you write about all that much. What is it like inside the institutions I know you kind of left them but like what is how how is it? How has corporate America changed for example in the past few decades
02:47:18.17
Doomberg
Yeah, so I would say it's not really a statement about corporate America. It's a statement about bureaucracies in general and bureaucracies exist to persist and to proliferate.
02:47:55.82
cactus chu
Mm yes.
02:47:57.85
Doomberg
Um, the old saying is that there's nothing more permanent than a temporary government program is true and it's as true in government I mean not as true, but the same fundamental force of or nature exists in. Corporations that that also exists in government which is why there are some companies you know, famously like you know like gore tex I think you know where they or there's like ah a maximum number of people they will allow in any particular business unit because once it grows once it grows too big things get you know. Bureaucracy takes over it. In fact, I mean back to the origin story of Doberg we have a firm rule and we get asked by people whether they can intern for us or work for us or you know are we hiring or we have a very firm rule which is we outsource nothing. We do everything in-house everything in-house.
02:49:52.70
cactus chu
M.
02:49:51.91
Doomberg
Um, writing to editing to photoshopping to animating to operating the I personally or one of our partners answers every single email and every comment and all that we do everything in-house. Why is that? Well None um, it means we're pretty full. You know. On time which is a forcing function for prioritization. We can't waste our time if we're doing everything in-house. In fact, one of our rules is if we have to hire a contractor to teach us how to do something or to do something we don't yet know how to do more specifically then we pay them double to teach us how to do it so that we only have to engage them once. Um, um, that forcing function of priority is like we are an extremely lean team and we're extremely efficient with our time because we don't have time for bullshit and we're open and honest through our mindset of continuous improvement to call bullshit when and exist like that is a waste of time.
02:51:24.60
cactus chu
Mm right.
02:51:48.23
Doomberg
And if you waste your time doing that you are jeopardizing the business because we have limited resources and we're going to get the most out of those limited resources. There might come a day where we outsource some things and build a team we could manage but that day is not today. Um, and that's the opposite of bureaucracy. So I mean the. But if I was in the corporate world I would spend an enormous amount of my time defending my budget. Um, it's a very useless exercise of course politics you know like you could you? there. There are many b two b companies in particular. Um. Where you can climb very high in the corporation and never have met a customer. Um, I could write a whole book on corporate America and big corporations and multinationals in particular and how to climb them like it's a solved problem. It's you, there is growth.
02:53:30.46
cactus chu
Huh.
02:53:50.74
cactus chu
Yeah I think I've seen books like that. I know people who do this kind of stuff.
02:53:45.11
Doomberg
Yeah, there are yeah there are growth Hacks too and there are and there are ethical ways to do it. But it's sort of a solved problem in my mind and so it's boring. Um, but yeah, like the bureaucracy the primary objective of bureaucracy is to persist and proliferate and it begins to eat up the.
02:54:11.74
cactus chu
M.
02:54:24.70
Doomberg
Innovative you know that the flexibility the the innovation you know the the entrepreneurial spirit of the employees and so then what you get out of a corporation is not the integral of the of the talent and work of the individual people that. Are embedded in it and in fact, today like they're they're they're literally prisons like many of these corporations have fences around them and you have to badge to get in and you have to badge to get out. Um, and you know everyone. Keystrokes are monitored and every text is stored and um, it's literally a prison and so um I didn't want to be a good prisoner. Um I wanted to create something and my team wanted to create something. Um. You know the old expression that we have is we eat what we kill like if doberg didn't succeed. Yeah, if the doberg didn't succeed. You know we would have to do something else because how would we feed our families and how would we pay our bills that empowers you.
02:56:32.26
cactus chu
Yeah, you have to let the chicken out of the coop.
02:56:57.72
cactus chu
Mm.
02:56:49.25
Doomberg
It's scary. It's risky for the comfort of a regular paycheck. In fact, all of society by the way is structured around forcing people to be employees of corporations. So I am not sure if you're familiar with the whole W two phenomenon. But if you.
02:57:33.16
cactus chu
No, not at all what what is w 2
02:57:26.83
Doomberg
Okay, so w two is basically a person that works a corporation. You get a paycheck and for taxes they give you a WA form w 2 which categorizes your earnings and your deductions and your following k contributions and your health care and all that stuff and um.
02:57:55.74
cactus chu
Oh I see okay.
02:58:05.47
Doomberg
You can't get a mortgage unless you have a w two. So as an I I'm I own the l I'm either an outright owner or partial owner of the lcs that you know that we have created to operate our businesses. But we're not w two I'm not a w 2 employee and regardless of how much money.
02:58:40.86
cactus chu
Yeah. Right? Really interesting. Well I'll have to think ah I'll have to take a second look at starting that consulting company then.
02:58:44.70
Doomberg
My businesses make I can't get a mortgage because of that. Yeah, you're almost impossible. Why is that? Well even then you like you better pay yourself as two like we are owner operator partners. So we don't like that we're not employees. Um, and so.
02:59:24.60
cactus chu
Oh I see.
02:59:22.71
Doomberg
Um, the reason why you can't get a mortgage is because Banks aren't really in the lending business, they are in the flipping business and the Fed buys mortgages originated using W two' s as backing and so like the whole there's ah the glit like I did when rates were at their lowest. You know if I wanted to refinance.
02:59:50.78
cactus chu
Oh I see something interesting.
03:00:00.67
Doomberg
Home and takes some equity out I couldn't do it because I they won't even talk to you like it did and this is a very common thing like you could Google around like entrepreneurs can't have mortgages because no matter how much like I no matter what how much equity you're putting in and what the loan of value is and how much personal collateral you can pledge. They can't flip it to the feed and so.
03:00:21.32
cactus chu
Oh my goodness.
03:00:39.89
Doomberg
Not going to give you the loan. Um, these are all just sort of interesting little signposts that society would like us to be prisoners you know and and when I again like if you look at the security around many companies that came up especially after say None and maybe it's just an artifact of the industries that we were working in because they're. You know, sensitive industries and you know to target rich environment for terrorists. For example, um, they put up fences and you know it's all your surveill then you go in and you attend your meetings and you do your training and you get your job performance reviews and you know.
03:01:39.96
cactus chu
Great.
03:01:55.17
Doomberg
Do your HR policies and do your various training and none of it is productive work. Um, so there's a lot of busy people in corporate America but there's not a lot of productive people.
03:02:27.18
cactus chu
Yeah, it's all like busy work right? So There's this kind of idea and in the kind of industrialization Era I think articulated best by the sociologist Max Weber that these bureaucracies would become. More and more rule based and that this is actually this might have actually been a good thing. It might create alienation. It might, like you said, make people feel like prisoners. But at least it would be more efficient but that doesn't seem like the case. It seems like that Actually they're less efficient right? And you said you're not tolerant of Bullshit basically and that. Ah, there and the implication is that they are tolerant of bullshit right? And you'd think that that's not very good for the company itself. So like why in your judgment is this happening.
03:03:46.91
Doomberg
Because as I told you bureaucracies are solving for a different scorecard than the companies they're embedded in and so just take your typical company. It has functions to use language of the corporate world.
03:04:09.44
cactus chu
Um, yes, exactly.
03:04:26.73
Doomberg
Ah, Hr might be a function, research and development would be a function, manufacturing would be a function now some corporations are organized predominantly by business units and I could tell you the pros and the cons of every corporate model based On. Um. How autonomous the business units are or how strong the functions are and whether the who reports to who so if this ah we going into the weeds but I am happy to do it because I've spent decades in it. Um, if if if the R and d.
03:05:36.82
cactus chu
Yeah, and I'm happy to listen.
03:05:37.35
Doomberg
Head of a business unit reports to the business general manager that's radically different from if that r and d head reports to a functional leader. So if you're a chief technology officer of a fortune 100 let's say um if none of the people in the business units report to you. That's a very different job than if.
03:06:05.56
cactus chu
Whom.
03:06:16.87
Doomberg
Everybody in the function reports to you across the company and so that's like the Non line of delineation that is necessary to understand the structural flaws in the design of the corporation because there's strengths and weaknesses to both models but especially in companies where functions are strong. The function. Behaves as this as an entity embedded under the corporation that is optimizing for the function often at times at the expense of the shareholders and in violation of their fiduciary and so just as an example, imagine you are in a human resources function at a large company. And every manager in the company reports up to the chief human resources officer instead of reporting to the general manager of the business unit. You might decide that it's not a good idea to outsource ah hr and many of the ah hr functions and tactics offshore because you and your friends work in Hr and and. And back to the discussion we had, like Wall Street might be pressing you to do that and you won't do that because you're solving for your bureaucracy now. Whether that ultimately as we talked about might be a better decision in the long run is besides the point. Um, that decision is being made at the bureaucratic level and not at the owner operator level. Um. But the principal agent problem basically rears its head in the power structures that get embedded within these corporations and even if let's say everybody reports up to the general manager of a business unit that business unit might make decisions that are not necessarily optimized for. Mothership and they might view corporate headquarters as the enemy and behave accordingly and they might you know decide that you know they only need to show 11% growth and so they might delay some orders into next years to smooth things out because there's no need to you know overachieve against my metric because I'm not going to get paid for it. Um, etc. So those are the types of flaws in the design but at the holistic level the them up the the issue with bureaucracies is they're solving for a different function.
03:10:40.80
cactus chu
Right? And I actually have a model of this. I'm not sure if you heard this while you were kind of backward researching or anything like that. But None sentence bureaucracy is the art of moving explicit hierarchies into implicit hierarchies. Taking these like very obvious competitions right? Are we going to get a rocket to Mars? Are we going to have this rocket go up and then land again right? or is our government providing basic resources to people right? Is it operating efficiency? Well um. And turning that into something that is very implicit and convoluted that basically is the ideal fertile ground for so for useless social climbers, people who don't have much talent to kind of actually contribute but have a lot of talent in manipulating these bureaucracies and in kind of climbing up them. And you see these kinds of figures in all sorts of places, certainly my home. My homeland of politics is populated with very very very many of them. But that 's essentially what is happening in my view. My kind of diagnosis. And of course this is oversimplified. But I think there's a lot of value in it is that what actually creates value is this kind of explicit criticism, this kind of sharp debate and ah betting reckoning reckoning with uncomfortable truths is swept under. Rug is substituted by this kind of persistence game.
03:13:31.79
Doomberg
Yeah I agree wholeheartedly that's precisely what occurs and again the metric that is optimized to you know the old expression is you you get what you inspect? not what you expect right? and um and so like for doomberg we have a magic metric that we manage to and and I won't you know.
03:14:05.28
cactus chu
Yes, exactly.
03:14:11.31
Doomberg
Necessarily talk about it here. But since we're a small dynamic team responsive team. We understand across each of the five pillars what our key metrics are and even within those which are the true most important non-negotiables and then that allows us to cut through any bureaucratic impulses that we might develop.
03:14:45.60
cactus chu
M.
03:14:49.61
Doomberg
You know we joke? Um, we have a magic manric and the bitcoin maxes, who I actually quite like many of them um, would appreciate this joke but our expression around the chicken Coop is show numbers go up and repeat so every day as long as that number is going up.
03:15:14.38
cactus chu
Sciss is dead.
03:15:28.51
Doomberg
Um, and we're compounding values and so show up, You can't, you have to show up every day. Um, number go up is objective and then and repeat is the trick of it all and continuing to be motivated to create the value capture. The value is shared with our friends and family. Is. What's going to be the genesis of our success whereas in a bureaucracy um the social climbing aspect making your boss look good. You know, Um, there are genuine ways to float to the top in such circumstances we tried I Certainly Tried. Behave in those ways when I was in that world but the prospect of putting on a badge and going into a prison again is just unthinkable to me having lived the other side of this life and so it's ah you know that I wouldn't again I'm doing the work of my life and so what a privilege like I don't want to.
03:17:18.66
cactus chu
Kuf Life's not for you. Yes.
03:17:20.47
Doomberg
Even though we've talked about a lot of pessimistic things I'm a very joyous, very grateful, very happy person and thrilled to have found the work of my life and and I don't begrudge for a second I don't take it I don't take lightly what a wonderful thing that is and how thrilled I am and.
03:17:37.16
cactus chu
Certainly.
03:17:59.81
Doomberg
Our team is to have found it and every day you know Jim Harbaugh is a coach of the Michigan Wolverines has a saying which I will make more sort of gender appropriate which is easy's gonna attack each day with an enthusiasm unknown to humankind. Um. Get out of bed and get to do the work that I do and I'm extraordinarily and forever grateful for having that gift and having earned that gift through good heart work.
03:19:15.62
cactus chu
So how do we inspire more people to take that path right? Is this something that is like why? Why are more people doing this?
03:19:17.21
Doomberg
Um, it's not for everybody. Um for one. Um, it's hard. Um, there are a lot of advantages to working at a large company even though it's bureaucratic and even though you waste a lot of time. There's the certainty of your salary.. There's the. The time of the day where you have meetings and then the time of the day where you don't have good Benefits. You can get a mortgage. Um, you know there are a lot of benefits and so like I don't want to sound like just because I left that world that somehow everything about that world is bad because it's not true. Um, we've organized ourselves in this way for many reasons, some of them are good. Um, you know access to Capital markets and operating things at scale require functions and you know we couldn't. I couldn't run a nuclear power plant with a small team and so Nuclear power plants should be run and so on. It's important and for many people it it satisfies their basic needs and they live very happy lives and they go on their biannual vacations and they're members of their country club and their kids go to good colleges and they live happy lives and they retire and and they've lived a good honorable decent life. And for many people that's the objective but that's an incredible privilege on the global scale of course to people listening in parts of the world for whom such optionality is not Possible. It sounds like we're speaking in a foreign language. Um, and so you have to be mindful of just how lucky and privileged you are.
03:22:32.88
cactus chu
Writes.
03:22:31.65
Doomberg
Um, so we I would say that for those who want to and we're considering actually writing a book. We've been approached and have some options in that regard. Um, there is a there is a there is oh.
03:23:02.38
cactus chu
Who are.
03:23:03.35
Doomberg
Sort of not. It won't be the title but one of the possible titles for the book. It goes along the lines of, you know, subte at least would be a recipe for content creators or for you know, creating your own business here is sort of a systematic way to have. Effort be the only input into the equation and then if you're willing to work your tail off here's a pretty sound navigation plan to get from a era to where you want to go and there are many such books and and and I don't know that we would have anything specifically differentiating enough to justify one but I would say that the none and most important piece of advice that I would give anybody is that there are there are no gimmicks right? And so the one thing you need to do is to be able to work extraordinarily hard on something and then the one thing I would say is it is impossible to work as hard as you need to on something that you're not passionate about and so.
03:25:02.26
cactus chu
Um.
03:24:58.43
Doomberg
If you do happen to find your passion and you are willing to, as Vince Lombardi would say, find out what the price is and pay it. Um, then there is a systematic way to deris the effort which is the sort of None pillars plan that we open this discussion with. Obsessed over executed on and tried to continuously improve from the beginning.
03:25:51.46
cactus chu
Right? Do you want to? Do you want to drop some? Do you want to drop some breaking news on that book front? What do you want to add?
03:25:53.23
Doomberg
Oh yeah, we have nothing. Yeah, we have nothing formalized yet. It's a concept. We're very very busy with launch. That's sort of that'll come later once we have once our growth has slowed and we have stabilized.
03:26:22.88
cactus chu
Right? makes sense.
03:26:28.81
Doomberg
Um, subscriber base that is consistent with what our goals are and that you know we're in the phase of the business where you're sort of beating back Churn instead of growing and you have time to experiment in other areas. That you can sort of create in in this world and so there's no plans in the short term for sure and we're not even sure that we would write one on books are kind of hard to do and and oftentimes can be sort of negative Npv projects when you measure for when you take Account. Of your effort and the opportunity cost of what you could be doing.
03:28:00.52
cactus chu
Yeah, we have gone quite a while without mentioning without mentioning oil and without mentioning Energy. So There's actually still a lot of stuff that I want to ask you on that front. We talked about esg a bit earlier and I think yeah esg is actually one of the questions of like.. Basically how how hard can a market be distorted and I basically want to ask you that question there there are these debates economists have over Market efficiency. How long. Do they take to correct how far how far off can they be and I think like really how the question of yeah esg is basically like how hard can they be manipulated. Ah, so like what do you think?? What do you think the true value of these kinds of funds are? I think we both agree that they're obviously overestimates but like how much they overestimate and what is actually happening here.
03:29:34.95
Doomberg
Um, so I mean there's sort of a deeper question embedded there which is how far can you stretch the rubber band before it snaps back. Um, and in particular, the energy sector is asset intensive with long lead times.
03:30:02.22
cactus chu
Yes, this.
03:30:14.70
Doomberg
And um, price doesn't always induce more supply now because of the esg movement fundamentally attacking. Well how can you like it if you can't get a pipeline approved in 5 years? What does the price of dental gas mean for whether or not, you're going to accelerate, quote unquote that pipeline you're not, you're not on the critical path.
03:30:35.18
cactus chu
Really.
03:30:49.38
cactus chu
Um.
03:31:01.60
cactus chu
Right? There's no actual control there.
03:30:54.37
Doomberg
We're correct. We're very big on identifying and micromanaging the critical path for any particular goal or subproject that we might be working on and so when the critical path is outside of your control price is irrelevant to your action. You might know if you're not working on the critical path and. And you're not going to change the time. This is the first energy crisis that we're in where politicians are simultaneously attacking supply in the middle of the crisis. Um Boris Johnson putting a find me another and.
03:32:03.80
cactus chu
Is that the case where we've never been in a case where we've never been in another case where you've had a kind of shortage of something and people are attacking the kind of supply that seems I don't know that seems like the type of political mistake that's happened through history.
03:32:14.17
Doomberg
In energy and something as important as energy and and you won't be able to name one in energy. Um, yeah, because energy is a core of your energy's life as we coin that phrase.
03:32:38.42
cactus chu
But I can't name an example off the top of my head either. Okay.
03:32:48.91
Doomberg
And so yeah, this is the one time in the history of humanity where a society is so wealthy and so ignorant that it thinks it can as we say let me read you the opening line of grim diesel because you know when I have time to write it. It's better than when I'm thinking on my feet you know, but.
03:33:09.78
cactus chu
Huh.
03:33:24.96
cactus chu
Oh yes I like this one.
03:33:27.97
Doomberg
So here's what I say in the opening paragraph of Grim Diesel published on May Twenty third: our political class, a collection of people who have benefited the most from and yet know the least about the hard work that goes on in this space, my energy continues to do its level. Best. To impede and reverse the development of our domestic energy bounty and here's the killer line naively assuming they could Jack Hammer away at the foundation of the tower they sit atop and somehow be immune from the consequences of its collapse. Um it is literally insane.
03:34:43.20
cactus chu
M.
03:34:41.21
Doomberg
What we are doing to ourselves under the auspices of saving the planet quote unquote and the picture that we show in this piece underneath that turn of phrase is none other than John Kerry and in the caption which many people would not have read because it's, you know, smaller text. We.
03:35:31.94
cactus chu
Um.
03:35:20.89
Doomberg
We jokingly say John Kerry is a noted scientist. Um John Kerry is an idiot and John Kerry should be nowhere near the policy making king in a field as important as energy. Um and yet here we are and so we will all suffer the consequences of his idiocy. Um, and that's just the none time in history in the middle of an energy crisis where a society is proactively attacking supply and um the dies cast.
03:36:40.66
cactus chu
This does live up to your namesake. It does give me a profound sense of doom. Um.
03:36:41.41
Doomberg
Ah, well you know nobody comes to us for the optimistic outlook it is called doomberg I mean so it's yeah.
03:37:08.48
cactus chu
But yeah, is there any kind of forcing function here? Is there any kind of thing that there is motive to.
03:37:05.87
Doomberg
Yeah, political political revolution. Yeah, um, well yeah, they've been that literally either through the ballot box or through violence we have an expression which is on the path from abundance to starvation is Riot and we have not yet experienced.
03:37:48.20
cactus chu
M.
03:37:45.59
Doomberg
Food rights here but we are starting to see them break out in various countries like S Sora Sri Lanka was not what you would consider to be a poor country, a sort of you know middle income type. It was a pretty well developed middle income country and it's yeah yeah, um, and it collapsed.
03:38:27.38
cactus chu
You're developing right on its way up.
03:38:22.45
Doomberg
Yeah, not anymore. It took 1 season. Yeah, and so there you go um, and so yeah, they did how far the band could be stretched before it. Snaps back is an experiment we seem determined to run.
03:39:06.64
cactus chu
And I think a very big problem here is that there. There's a kind of asymmetry that the people who are None hurt by this kind of growing instability are not the kind of people who are causing it right? yeah.
03:39:18.35
Doomberg
Of course Yes, in fact that the one's causing you know the last ones to be hurt by yeah, they wouldn't be doing it if they were the immediate victims of their own policies. You know like the old joke was that you are this.
03:39:44.22
cactus chu
Precisely.
03:39:49.65
Doomberg
Think Putin may have said it or somebody said it but like the US is willing to fight Putin down to the last European um, it's it. It's the same here like John Kerry is not going to give up his private jet um you know or his various mansions because you know. Is what it is I mean I don't want to sound too populist but it would be great if the people in charge of these decisions were the first to feel the consequences of it which is what a representative democracy is actually supposed to do but because nobody wants to run for office anymore and we distill psychopathy in that industry. We're left with. John carries the world.
03:41:18.82
cactus chu
I don't think you can really go without blaming at least some of the voters though because here's the thing right? We talk of it I think there's a good case to say especially now that energy is the number None issue energy is is neither the number None issue and. Ah, voters' minds or you can say it's not the number None issue in the media. Um, and both of these are huge problems right? Um, it's not close right? like then now they're having this kind of like gun freak out over real. It. What is just like It's an anecdote It's a local news story. It's nowhere near as significant as the kind of stuff we've been talking about this entire show right? and you see the same thing over and over again with these kinds of individual cases. You see it on the left and the right on the right. It's more like terrorism or it's like vaccine side effects. It's the same deal. It's these kinds of anecdotes that get blown up into some kind of crazy thing on the left. It's like either shootings or police killings so on and so forth and it's just kind of like this it's It's this show it's a show and it's a show that a lot of voters are tuning into that a lot of voters right? like a lot of people vote on the culture war and I I think that's a very big contributor as to why? like why? like people aren't more responsive. Or like politicians aren't more responsive to these kinds of things that actually do matter a lot like energy policy.
03:43:53.75
Doomberg
Yeah, well, you've answered your own question like I would say that I hesitate to blame the voters because they are subject to a deluge of propaganda. The same social media companies that control their feeds and hoard them you know herd them into pockets of cult- like conclives.
03:44:43.64
cactus chu
Yeah I mean but like there was some point where we were. We were only paying attention there to that and to that as well right? and we kind of realize right? You don't need I don't think you need to be kind of like that sophisticated of a thinker to to just say like oh hold up hold up hold up hold up I should not be emotional.
03:44:32.87
Doomberg
Um, and so yes, of course sure.
03:45:17.78
cactus chu
I should not be emotional over this is like clear manipulation right? I should kind of step back and actually like to pause and think um and I do think there is some blame there right? Because quite frankly, this kind of propaganda is really lame. It's like not. It's not very good. It's very low quality.
03:45:32.59
Doomberg
Yeah, it's easy. Ah yeah, it's easy for those trained in the art of it to identify it probably easier than the average person. You know the average person doesn't spend that much time thinking about it. They're not hosting a podcast or.
03:46:05.22
cactus chu
Um.
03:46:16.84
cactus chu
Here.
03:46:08.93
Doomberg
Ah, guests on podcasts you know like they live their lives. They just want to be happy and have their children do better than they've done and so I would not you know Grant Williams had a great piece on propaganda earlier this year in his newsletter and it's behind the paywall but at grand http://dashwms.com but um, very very good like it's a very very powerful force man like it's it's it's and I of course we're both victims of propaganda all the time like and and so I'm not like proclaiming that somehow we're immune because we're this, you know, chiseled intellects that stand above the fray we are victims to to.
03:47:16.42
cactus chu
That's fair.
03:47:21.79
Doomberg
Propaganda just as much as anybody else. But I think I would not blame the voters necessarily. It's very very difficult to cut through the noise and.
03:47:45.90
cactus chu
I mean I say that because there is a kind of gradation here right? there there is really just falling for the most obvious kind of like it's. It's transparently anecdotal. It's transparently a kind of distraction. What's going on especially with.
03:47:48.23
Doomberg
Sure.
03:48:21.32
cactus chu
The kind of culture war stuff for this kind of shooting stuff now. It's like not it's not well hidden at all and you can say okay, that's because you have an understanding of how propaganda works but really like if you have this is nothing better than the kind of rag level gossip that um. I mean I guess this was popular in in in the day as well in kind of like a few centuries ago but like this is what is happening this is this is what is filled the coverage of the New York Times is what has filled the coverage of every cable channel whether they're in the us or Canada and I'm sure in many other countries as well.
03:49:01.19
Doomberg
Yeah, yeah.
03:49:36.52
cactus chu
Um, and it's even more absurd in Canada because of course this is something that happened in a completely different country. Although I would say it's absurd in the US unless you're in that same county as well because it really should not matter to you whatsoever. It's this kind of marginal thing that kills fewer people than like one. Was it either like None ah, none of the number of hard attacks right? and people are having these kinds of neurotic freakouts that create bureaucracies that create a further preference towards these kinds of implicit hierarchies instead of explicit competition. This kind of like embedded neuroticism in all of these institutions. That was the end result of that. It's stifling innovation. It's creating stuff like the Fda whose primary function is to delay what I think are wonderful innovations and drugs like the coronavirus vaccine and causing hundreds of none deaths as a consequence. Um, so. Really do see this as a kind of self-regulation test right? It's like looking at this kind of emotionally triggering thing and saying okay I'm not going to be emotionally triggered by this and I actually think I have an article that I'm going to put out sooner that I've already put out at this point. Um, that kind of makes us as a kind of moral or philosophical case right I just don't think that I don't think that right now okay I'm sorry this is kind of bad communication. But I really do care about this, that there's a kind of moral inversion. I think in the valorization of impulsiveness and I think that this is actually deeply connected to how our bureaucracy works because our bureaucracy is kind of short termist. It's kind of like office politics. It's kind of like whatever you can do to manipulate the people in front of you and that means this kind of like this kind of really like performative emotionality. And what's strange about the performative emotionality is that it's kind of vice signaling. It's signaling your emotional weakness. It's signaling your kind of really your your lack of self-control and your incompetence and ah and this is valorized and this is just something that is like literally the opposite of anything functional to me and maybe you're right? Maybe you shouldn't blame me. The voters or we shouldn't blame the individual people involved. We should blame the system, but I'm kind of not in that mindset. I think that if you engage in these kinds of behaviors, if you kind of like it, if you kind of lack, if you kind of let that emotionality take over you right? You are at least a little bit. You are at least a little bit on the hook.
03:54:15.90
Doomberg
Yeah, so a couple of things I would take issue with I Do think that you know essential that the sense this yeah, the the centralization of news is certainly real although I would separate mass shootings as a separate category.
03:54:40.80
cactus chu
Yeah, go ahead I'm always very self skeptical when I make these cases. So yeah, go ahead.
03:54:53.61
Doomberg
Um, there's a serious issue and there's serious debate to be had on what can and should be done pro and con to those events and so I wouldn't downplay the enormity of the tragedy. For example that has transpired in Texas and there's an old expression in the. Public relations world which sort of captures the essence of the challenge facing such professionals as they try to obfuscate a crisis or you know respond to crisis management is interesting science but the old expression is hazard equals risk times outrage.
03:56:17.30
cactus chu
Ah.
03:56:09.31
Doomberg
Um, and so um, you know back to the whole proximity effect of empathy that we referenced earlier. Um the you know like in one of the old other expressions is there's nothing more outrageous than puppies and babies right? and so and so.
03:56:50.96
cactus chu
Right.
03:56:47.55
Doomberg
When you see especially a school shooting you know where there's young children involved this strikes a deeply visceral protection mechanism that is sort of. Hardwired into the Reptilian part of our brains and so that's a completely separate and I think standalone issue that I wouldn't lump into the other examples that you articulated but that concept of hazard equals risk Times. Outrages is well Known. And the public relations community and there's just certain you know, certain less outrageous you know to the populous events that you can get away with and you could take more risk on because the hazard is lower because there's less outrage.
03:58:05.40
cactus chu
Um.
03:58:27.31
Doomberg
You know I joked in one of our pieces or maybe I didn't and I maybe didn't survive editing. But um, the media has a ah bias against oil for example and so that's why discoveries are quoted in barrels and oil spills are reported in gallons because there's there's 42
03:59:11.20
cactus chu
Who he has.
03:59:06.73
Doomberg
Gallons and a barrel and so it's a bigger number I think I did write that at one point. So yeah I mean it's a complex topic Probably probably don't have the time to get into it at the level that it would deserve here. But yeah, so.
03:59:25.44
cactus chu
Yeah I think I remember this.
03:59:42.28
cactus chu
Yeah, this kind of obfuscation I think is incredibly common and ah yeah, it's interesting that you talk about this and and and the kind of Pr aspect because this is kind of similar to the kind of market efficiency thing. What do you think is the effectiveness of the pr field like how good they are? On average. How good is average companies like prpr outlets at what they do fair enough fair enough but on average.
04:00:18.59
Doomberg
Depends on the size of bureaucracy behind it. You know? Um, yeah, no I think yeah yeah, I'd say um, there's nothing in a society where information is so valuable and perception of your brand. So critical that you know public relations. It can be the most critical thing that a company does you know back to the whole definition of brand that we started with which is the gut feeling you induce in your ideal clients as they interact with your product if if. A company that you have come to trust and procure. But their products are discovered to have been a serial polluter and abuser of labor in foreign countries that affects the brand right? And so to the extent that that should be Obfuscated. Of course it shouldn't be but it happens and and. Such professionals. Um, for a price are willing to do that And so yeah.
04:02:26.64
cactus chu
Yeah I think ah wait I didn't know wait I still I want to get like a clear answer to this because okay I'll kind of put the motivation I'll make the motivation behind what I'm thinking about more clear. My understanding is that many of these Pr companies. They're kind of not very good at their jobs when they kind of respond to especially the kind of political aspect right? when there's kind of these political outrage mobs I think that they're actually not very good at containing this and that.
04:02:55.31
Doomberg
Um, oh sure. Yeah, yeah.
04:03:17.33
Doomberg
Sharp.
04:03:33.40
cactus chu
What is usually more effective is actually just saying that this is political and this is outrageous and that this is um, the representation of an extreme fringe which almost always is right? So saying that truthfully right telling the truth I think that it actually works better in many cases and you saw this with kind of ah. I think Trader Joe's did this and some other companies did this and it actually turned out quite well for them. So I actually think that there's kind of ah there's kind of a at least in the political sense which are kind of the the land that I'm more familiar with there is a. There's a deep flaw in the entire industry.
04:04:38.59
Doomberg
Yeah I mean I would agree that um, many public Affairs functions within companies are incompetent and or many of the firms that charge a lot of money for such services. Don't do very well in particular.
04:05:11.78
cactus chu
Chi.
04:05:27.74
cactus chu
M.
04:05:16.19
Doomberg
Crisis management. Yeah I wasn't making the case that I was more commenting on the need for them and how effective they could be when done well as opposed to a general generalized appraisal of the Median public affairs professional just a quick time Check I got.
04:05:43.60
cactus chu
I see.
04:05:56.70
cactus chu
Yeah, but like what do you do? What do you think is the kind of state of state of play there right? like.
04:05:54.50
Doomberg
Just a quick time check and you'll have to edit this out but I got about five more minutes before I have to go and so maybe we'll do 1 more question and a wrap up if that's okay with you? yeah yeah yeah I figured 2 hours it's It's just I have um.
04:06:26.14
cactus chu
Oh my? Okay yeah I was not sure because you did say like you can talk about birth.
04:06:31.11
Doomberg
Ah, dinner. It's my anniversary and so I have to go? Yeah, yeah, let's technically tomorrow about the dinners tonight. But yeah, so edit all this out obviously. But yeah, so go ahead and fire away on the next question.
04:06:45.88
cactus chu
Oh my goodness take it, thanks so much for making the time today. But ah yeah I will.
04:07:12.60
cactus chu
Yeah, So I think we're running it a bit. Ah sorry so I think we're running a little bit low on Time. So I'll give you the last question of the show. What is something in the world? Hopefully something that we haven't talked about yet. That has too much chaos and needs more order or that has too much order and needs more chaos.
04:07:48.53
Doomberg
So I would say um, the question I think a lot about and sort of tied back to what we were just talking about which is public affairs is how does one go about. Rebranding something that the public has radically misunderstood for a good cause right? and so I think about this a lot vis-a-vis the nuclear energy industry. There is no path to decarbonization that doesn't go through nuclear and yet. There is no industry that has produced more life nourishing power more safely with less harm to the environment than the nuclear industry and yet that industry is the most maligned least appreciated least well understood industry in the world and. Um, so there's chaos in the belief systems of the average person vis-a-vis nuclear energy and it would be great if we could order those beliefs to a proper grounding in physics. Um, and just to show people. What's possible. So for example and just in the state of Michigan you know they. Shut down a nuclear power plant and now there's warnings of rolling blackouts this summer. Those 2 things are connected and so back to the question of public affairs and effectiveness and the real deep problem that I would love.
04:10:40.80
cactus chu
Soon.
04:10:50.65
Doomberg
Solve is how do you take a deeply embedded fear system back to our discussion around sensely you know, centralized sensationalized news and and has it equals risk time outrage. Um like nobody died from three mile island people you know there's a train derailment yesterday of oil. Um, it's leaking into a river and um, that like Three Mile Island was so blown out of proportion and created so much fear and so much sensationalist news coverage around the event that it has really put humanity back a giant step back. And put the environment back and and I don't know whether it's solvable like it's not like you just rebrand it. Um, and so that's a question I give a lot of thought to and and and if you ask me what area would have the biggest impact on the most amount of people in the nearest. Term possible. It would be a rebranding of that if nuclear power was invented today. It would be heralded as a humanity saving invention. Yeah um, yes, exactly exactly yeah and and so yeah, that's that's.
04:13:19.20
cactus chu
Um, yeah I think Josh Wolf has the idea of calling it elemental power.
04:13:25.99
Doomberg
That's my answer to your final question.
04:13:40.62
cactus chu
Yeah, awesome. Thanks for coming on the show.
04:13:33.45
Doomberg
I really had a good time. Yeah and make sure everybody sends up to doomberg.substack.com and follows us on Twitter at doombergT.
04:14:00.56
cactus chu
Yeah, great.