Multiple Canvases

Life is random, ambiguous, and complex. Sometimes things can be interpreted in multiple different ways. That’s okay. 

We interpret the world through our own controlled hallucinations. We take in information. We process it. We create a picture of what is happening. 

We ignore a whole bunch of stuff that we don’t think is relevant, don’t understand, or just don’t have the capacity to absorb. If something happens in an order that we recognize, then we expect the thing that normally follows. Sometimes even if that event doesn’t happen, we will still experience it because our created reality fills the gaps. When we don’t pay attention because we have “seen it all before”. 

This is helpful. The power of biodiversity is we can try different things. Respond in different ways. Fail creatively. 

The “Curse of Knowledge” is that once you understand something, it is hard to imagine not understanding it. If you can read music, you can’t look at a page of music and not imagine the sounds. 

If you can understand Hebrew, Arabic, or Russian... you will unavoidably experience looking at a page where I see squiggles differently to me. Once you understand a language, you no longer hear just a string of sound. It is no longer just noise with no emotional connection. 

Our collective ability to experience differently creates multiple canvases for understanding.

Feeling Decisions

Free will exists. It is just incredibly hard work. Free will is not simply deciding. It is training yourself to decide. It is creating the environment where it is possible to decide. Where your decisions are not forced. Where the constraints within which those decisions are made are chosen, dismantled, or changed consciously. 

Computers don’t know what the 1s and 0s mean. They just apply the algorithms, and something happens. If there is a glitch... a coder has to consciously find it and change it. For that to happen, they have to become intimate with the code. Open it up. Unpack it. Understand the steps, consequences, and connections. 

The further decisions are from consequences, the more information is lost because of oversimplification, and the length of time till feedback is felt. 

This is David Attenborough’s case for biodiversity as a response to climate change. Increasing the capacity for local reaction. Feeling decisions. The ability to adapt to conditions rather than the monoculture of distant central decision-making behemoths. Building flexibility and firebreaks for when (not if) things go wrong. 

The unintended consequences of big decisions may have conspicuous results, but they often hide until it is too late. Free will requires you to pay intimate attention, and do the work.

Maintaining Firebreaks

Fixed, Internal, and Absolute

In Balancing Postures, you find your balance by picking a fixed point to focus on. You still your breath and fix your gaze. Gradually, for longer periods, you can close your eyes as you internalise that point of focus. One of the most powerful techniques for financial stability is picking absolute targets. Most commonly people adjust their spending to their income. That makes sense when you are living in poverty, and you have no choice but to live hand to mouth. Beyond that basic level, living within your means is the most reliable tool within your control, to extend your control. Detaching spending from income. The “lifestyle to which you become accustomed” can be your greatest asset or a moving target that keeps you wobbling, grasping and falling. Once you have secured your base, core strength can give you the flexibility to move with control. Pick a point. Build a base.

Internal Risk

Modern Portfolio Theory suggests investors should maximise their expected return for a given level of risk. Conversations about what someone should do with their money start with “risk appetite”. The basic belief is “no risk, no reward”. Investments have no opinion whatsoever on the investor’s risk appetite. What determines whether you get rewarded (in the long run) is whether the investment added value. The challenge is there is enough noise to cloud a lifetime. There will be Corporate Zombies and Market Mavericks richly rewarded for a valueless working life. Look through that noise. I am very risk averse. Yet some of my choices would create a lot of anxiety in others. The Volatility (ups and downs relative to averages), Drawdowns (scary falls), and Opportunity Costs (stable acceptable alternatives) make my long-term preference for almost full investment in Global Equity look risky. Risk isn’t a number. It is a conversation. A money conversation should start with you and your world. It should start with your foundation. Your security. But that is a conversation about you. Your capacity. Your understanding. Risk conversations about investments can’t be summarised into single numbers. And are detached from you. Real risk management is internal.