I just got back from vacation and after traveling a big chunk of the summer, I’m looking forward to the steady backbeat of routine. Kids start school this week and that’s my cue to get in front of a computer and start pushing the ball forward on some projects.
For that matter, I’ll write a post, maybe for next week, about how I’m thinking about not just projects but the broader context of what I’m “doing with myself”. It’s almost a year and a half since I left the daily grind and while I’d like to say I have a clear picture of my next steps, it’s more accurate to say I’m just less confused. I had a lot of time to think this summer and I’ll share those thoughts soon enough.
Today, I’ll share a meta-thought.
Open Source Living
Trading culture is secretive. Now all secrets including trade secrets should be vaulted. Loose lips sink ships. But there’s a range of information that is insightful but not under lock-and-key that gets treated as a secret.
I’ve recently been consuming a ton of content by Jamey Stegmaier. He is the founder of tabletop game publisher Stonemaier who put out Wingspan. Jamey is a prolific sharer. His YT channel is outstanding and he talks about everything from nerdy game design topics, to life, to his business. His video A Brief History of Stonemaier Games is, to use that pedo-cringe term, “open kimono”. Even though his company is private he volunteers information that would be impossible to find. See 2021 Behind-the-Scenes Stakeholder Report for Stonemaier Games.
His transparency is alien to anyone from a secretive culture. Jamey has become an ambassador to the boardgame industry. Instead of protecting his turf (he’s not unstrategic of course — I haven’t seen him disclose his own vendors), he is blatantly thinking about growing the pie by promoting the industry. He encourages people to play and design games by boosting competitors’ games, discussing others’ game mechanics that inspire him, and even talking about games he wished he published or games he regretfully passed on.
Being transparent and vulnerable is a risk, but not without reward. If you embrace open-source living and can reasonably filter out selfish opportunists, you have a better chance, in my humble opinion, of “finding the others”. I used to tell myself that I wrote to clarify my thinking and educate. It was a big moment when I realized those were actually byproducts of what was really happening. I was “finding the others”. (It was Paul who I first heard say that. It was a lightning bolt of self-understanding. It’s also why it’s crazy to me that the most common writing advice is “write in your own voice”. This would be like life advice that started with “step1: respirate”. It’s not just obvious but easier).
Cooperation and negotiation are core requirements to get anything done. They don’t need to be warm and fuzzy, but the adversarial nature of spending your day on the phone with option brokers whose loyalties shift like the clay soil around the Hayward fault can grind down even the most extroverted trader’s enthusiasm. And I’m sure they feel the same about dealing with the short list of market-makers they need for liquidity. For all the aggravation, we wouldn’t deal if we weren’t both better off in the long run. But when I look around at other fields, or even my wife’s role on the biz dev side of finance, the dynamics are far less contentious. There’s more of a positive sum spirit.
Technology makes everything including finance more efficient. It disintermediates, improves transparency, and increases legibility. In that sense, technology, at the conceptual not necessarily specific instantiation level, is always a growing business. On the other hand, fields that are being disintermediated shrink. Survivors huddle on the lifeboats. If someone starts sneezing, throw ‘em overboard. A forward-looking firm might try to pull in a fit swimmer to help row, but most lifeboats would prefer to not take the risk and just preserve whatever rations are left for the seniority remaining. This might be totally rational and maximizing.
And that’s the problem.
If you are in an industry where pulling in the perimeter defense instead of pushing out the frontiers is the optimal play, I hope you are good at compartmentalizing. You don’t want that mentality bleeding over to the rest of your life outlook. At least I don’t.
At risk of a superficial analogy, it’s hard to watch boomers hanging on to their gerontocracy in politics without seeing a fearful cling to old ideas somehow wiped of any nostalgia (it’s hard to believe boomers were Flower children unless you think they forgot their LSD years). Every housing development they shoot down is stepping on the neck of someone trying to climb into that boat. Just log onto suburban Nextdoor if you want to eavesdrop on the debate homeowners (survivors is an increasingly fitting analogy here) have when a treading swimmer flails a desperate hand onto the side of the SS Nimby raft.
Morgan Housel likes the phrase “the grass is always greener on the side that’s fertilized with bullshit.” There’s enough grift outside the highly regulated financial world to make the money game seem downright honorable in comparison (a finance friend has told me things about the art market that would earn Madoff’s respect). I’m not pollyannish about life outside trading. But this letter and its #learninpublic spirit have always been a step towards openness and sunlight. The upcoming projects and discussions will lean even harder in that direction. I’ll learn. You’ll learn. We’ll go further together that way.
Speaking of secrecy, Byrne Hobart recently published:
Understanding Jane Street (25 min read)
Byrne didn’t paywall this post and it was his most-read piece ever which is saying a lot, so I don’t have to say more. Go read it.
Related post on information flow from the Moontower archive:
Twitter Reminds Me Of The Trading Pits (7 min read)