Moontower #190


In Wednesday’s Munchies, I shared some “purple pills” from game designer Gabriel Leydon. It’s not warm and fuzzy.

The psychological manipulation he describes feels like fighting over scraps. The scraps might be lucrative as the internet captures whatever attention the pre-online world had a grip on, but it’s not a foundation for wide prosperity any more than a private equity roll-up. Yea, they still increment “GDP” but so did constructing the Death Star (this doubles as a Clerks reference…iykyk).

And I don’t want to fall into the same idealistic trap Leydon describes in 70s futurism to pretend that C does not R.E.A.M

But there’s a non-Shaolin-inspired “C” that also rules everything around me — confirmation bias. It doesn’t roll off the tongue as easily as “cash” but it’s becoming more it’s fungible with it. (FOXA stock price is the exchange rate)

What does that mean?

It’s getting harder to know what’s true today. That’s not news. Everything we read is through a prism. The light we shine through it is our own priors and the refraction is perfectly predictable — the projected image will be the impression that minimizes the surprise between our starting beliefs and the interpretation of the new knowledge. If they hear the word “school shooter”, a liberal auto-presumes a MAGA-hate-pilled domestic terrorist and a conservative suddenly cares about mental health or anything else not starting with the letter “g”. 25 years ago they scapegoated video games and Keanu Reeves in a trenchcoat. The point is that our minds are made up because we are lazy and surprises are cognitively expensive (in the short term).

Your prism is a cope. Or a dishwasher — it saves you time. And because our minds are already inclined to take such shortcuts, the media just needs to keep bringing food to the cell. If horoscopes didn’t already exist, I’d accuse XKCD of leaking the partisan news business model:

I have mixed feelings to report.

It’s possible to fabricate new prisms. Angled to project a wider spectrum of understanding — smarter, more empathetic, courageous. It sounds nice but there’s a problem. The allure of the prisms in front of you now is they make you feel comfortable. Self-righteous. In control.

That means it hurts to have your horizons expanded. Learning is a struggle. If it’s not, it’s just review. You can do elementary math puzzles all day and feel proud but you aren’t growing. (Which is why that “expensive” moment of surprise is so valuable — it is the learning stimulus).

And this is where the storyteller comes in. The best stories, in my unapologetically smug opinion, are the ones that burden your mind with a lack of closure. They whisper “withhold judgment”. Their ambiguity is the most honest reflection of our condition. Their objects endure mistakes, hard choices, triumphs, and redemption. But the best won’t wrap it all up in a lesson (see Roger Ebert’s 2010 review of Lost In Translation). That trains us to stay immature. Fairy tales and parables are for kids because they’re developing a conscience bit by bit.

You can tell when a grown-up hasn’t grown up. They need laugh tracks and characters with face tattoos for hints on how to feel.

After reading The Sympathizer and finishing Ken Burns’ 20-hour Vietnam documentary, I’m again humbled by how complicated and inconsistent we are. Such stories grab us by the face and force us to look at our hands and what they’re capable of. At both extremes. (1 min clip by one of the veterans on war being “finishing school”).

The importance of (good) stories in raising our self-awareness came to me obliquely. I just finished that 4-hour George Carlin documentary on HBO Max. I really enjoyed it but the line that keeps echoing:

People are wonderful. I love individuals. I hate groups of people. I hate a group of people with a ‘common purpose’. ‘Cause pretty soon they have little hats. And armbands. And fight songs. And a list of people they’re going to visit at 3am. So, I dislike and despise groups of people but I love individuals. Every person you look at; you can see the universe in their eyes, if you’re really looking.

It’s a reminder. The best stories are written in our lives. You just have to get together to hear them.

Happy Mother’s Day

Money Angle

Here’s Devin from

on Twitter:

The tweet reminded me of this detailed 2-part takedown of Kiyosaki (who has really expanded his reach, parlaying his fame into the doom grift stratosphere).

Excerpt with the author’s emphasis:

A number of people asked me about Robert T. Kiyosaki and his book Rich Dad, Poor Dad. When I said I didn’t think he was a real-estate guru, they insisted he was. Several told me I would like him, that he preaches a message like mine. Eager to find such a guru, I bought his book, Rich Dad, Poor Dad, in a bookstore.

Rich Dad, Poor Dad is one of the dumbest financial advice books I have ever read. It contains many factual errors and numerous extremely unlikely accounts of events that supposedly occurred.

Kiyosaki is a salesman and a motivational speaker. He has no financial expertise and won’t disclose his supposed real estate or other investment success.

Rich Dad, Poor Dad contains much wrong advice, much bad advice, some dangerous advice, and virtually no good advice.

I decided to crowdsource books that teach real estate without a side-effect of brainworms:

The replies are full of thoughtful suggestions.

Full confession…I do have a strain of contempt for real estate investing in general. I’m a bit of a Georgian at heart I guess (map to this rabbit hole –> this interview with Lars Doucet on the Lunar Society podcast with

It is a peculiar blessing in America to have an intellect so goldilocks mid that you equate being a landlord with being a “man in the arena”. For capitalism to remain a brand worth buying, its apogee cannot literally be seeking rent.

Ok, enough restrained ranting, let’s brain burn like the masochists Moontower readers are…

Money Angle For Masochists

4 years ago in a short post called Get A New X-Axis I hinted at the concept of “variance time”:

In options trading, models assume time passes linearly but we know market volatility is lumpy. It’s concentrated on business days and even within business days, it’s concentrated near the open and the close. Not all hours are created equal. An option barely erodes on a Saturday but decays off a cliff after a stock reports earnings. Option traders adjust for this behavior by specifying a schedule by which “variance” passes as opposed to time.

If you think of an option as insurance, the value of the contract decays at a non-constant rate. By analogy, imagine having a Carribean travel insurance policy that you secure for a year. The value of that policy will remain fixed for the first 9 months of the year then plummet after the hurricane season. Time passed linearly but the risk that is being insured against decays rapidly as we progress through the storm season.

This week I published a detailed walk-thru of the concept and how to “clean” naive or “dirty” measures of implied volatility. If you use any off-the-shelf software you are looking at a “dirty” volatility. Whether you should take the effort to clean them up depends on why you are ingesting implied volatility data (the market’s consensus about volatility derived from option prices) in the first place.

My experience has been that the topic of “variance time” puts people’s heads in a blender. I use repetition and light Socratic techniques to bootstrap the topic so even a relative novice can at least understand the shape of the problem. A more advanced reader will be able to use this post to build their own model.

The topic is fascinating. And as recently as 15 years ago, comprehending it was a major source of edge. With 0DTEs and options that expire every business day, this concept has never been more important.

I’d deem this post a success if it’s the link pros handed to their trainees or risk support and said “I’m tired of explaining this, here’s a guide so you can re-read at your own leisure”.

For retail traders, this post is nothing more than a nerdsnipe.


Understanding Variance Time

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