I‘ve been reading Ben Hunt’s Epsilon Theory for about a year now. I wanted to write this post not just because his articles have shaped a lot of macro-level thinking, but because he recently went independent. I hope that this article brings you some value and you subscribe to his list – it’s the only thing I can offer right now as a thanks for expanding my thinking.
On to what I’ve learned from him:
Write like you talk
This originally comes from Paul Graham of Y Combinator fame, but nobody puts in practice better than Ben. For why this is important, let’s look back at an excerpt from the original piece from Graham:
Something comes over most people when they start writing. They write in a different language than they’d use if they were talking to a friend. The sentence structure and even the words are different. No one uses “pen” as a verb in spoken English. You’d feel like an idiot using “pen” instead of “write” in a conversation with a friend.
When you read Ben, there is none of this. Everything is laid out in a conversational tone. Since he can go deep into the weeds, this makes sure that the audience remains interested. He has been a model for this blog.
Call things what they are
I’ve discussed why this is important in one of my posts on Ryan Holiday. But because Ben discusses a wider range of topics, he gets a chance to really shine through in this department. Here’s an excerpt from one of his recent posts, Things Fall Apart Pt. 1, where he acknowledges this:
One of the big points of Epsilon Theory is to call things by their proper names, to speak clearly about what IS. And what America IS today is a two-party political system with high-peaked bimodal electorate preferences. So long as that is the case, we will be whipsawed between extremist candidates of the Right and the Left. Our choices for president in 2020 will be The Mule and Madame Defarge. Enjoy.
Not a pretty picture, but you need to name the problem before you can solve it. In an age of hypersensitive political correctness, Ben’s writing is refreshing.
Look at the meta lessons
It’s hard to look at a recent news story in context and derive meta lessons from it. Even with books and longer form content, it’s a trying task (as I’ve found this summer). Ben does this extremely well. So you leave with not just an interesting perspective on everyday news but with a framework on how to think about things.
A prime example of this is his latest post on the Tesla-going-private-but-staying-public debacle:
Buying Tesla stock or crypto coins is NOT investing, any more than buying an amazing Gucci jacket or a beautiful pair of Lucchese boots is investing. Yes, there’s an “investing” component to buying any security or any commodity, but that’s not what drives any of these behaviors. The primary meaning of owning Tesla stock or owning crypto or wearing fashionable things is to make an identity statement. To say to the world who you are and what you’re about.
He’s talking about signaling of course, but it gives you a broader lenses to think about other things that might fall into the same categories.
This is good because history can and often does repeat itself. So while in 10 years you might not remember the Tesla stories, you will remember that some investments are not investments in the conventional sense and have secondary motives.