Moontower #43


Since I don’t really write nor overly care about current events I’m gonna postpone what I was gonna write about this week and thank you in advance for indulging something a bit off-the-cuff and personal.

The last 2 months my family Whatsapp chat has been an emergency room on a full moon night. No less than 6 surgeries or hospitalizations ranging from an eye surgery on a 6-year old to my 85 yr old grandmother’s emergency hip surgery this week. This is close family. Every person shares 1/4 to 1/2 my dna (this expression is probably not biologically true but just as we gloss over misspelled words, you can identify what relations this refers to almost perfectly). It’s been a bit of bad luck clustered around the start of 2020.

On Friday, I called my house shortly after getting to work. I wanted an update from my mother-in-law on Zak’s fever. He was home from school Thursday and Friday. Turns out he was still asleep at 8am, but now Max (3.5 yrs old) was sick. With Yinh just getting ready to return from Japan, I was calling the workday early and heading home to pitch in. When I got home Zak was awake and on the mend but now Max was pathetic and clearly having a rough go of it. Earlier in the week, his preschool closed for 2 days because all the teachers got strep. It was an easy decision to take him to the pediatrician for some antibiotics.

At the doctor’s office, they run some tests and see he also has flu ‘A’. We didn’t do flu shots for the kids. Bad us. And since his breathing is a bit strained we head home with albuterol as well as antibiotics and Tamiflu. Parents will relate.

At home the Tamiflu makes him vomit but even more annoying is the nebulizer sessions don’t seem to slow down his rapid breathing. I call the after-hours line and the doctor on-call tells me to count his breaths in one minute. Around 60. At 50 or more she’d recommend going to the ER. So we pack a bag and off we go to John Muir in Walnut Creek. Now there isn’t going to be a scary reveal otherwise I wouldn’t write about it, so let’s diffuse that now. However, his chest x-ray shows budding pneumonia as well.

While he’s battling on 3 fronts, he is doing well. They administer oxygen and IV. Standard stuff. Parents of kids with asthma can double relate. He’s responsive to the treatments. The ordeal started Friday so it will take a few days to peak and since pneumonia might be viral the antibiotics can’t kill two birds with one stone as they are already indicated for strep. By staying in the hospital, his immune system can get some extra support. He’s on his third night in the hospital (sending this Sunday evening) but doing fine and just needs time.


As you can imagine, this is a very long day. And from the moment we checked into the ER until we were in our room for the night it was about 4 hours. There was a lot of downtime in that period. A few hopefully constructive takeaways:

1) Find a positive angle 

When I texted Yinh that I was in the ER I knew she wouldn’t open the texts until she landed for her layover in Japan. No matter how unalarming I write this text, the facts of the matter are going to induce panic. While the parent that’s present has to make realtime decisions and actually deal with logistics, the parent thousands of miles away, in my opinion, is in a worse emotional situation. She feels helpless and there is no amount of female empowerment that can suppress “working mom guilt” in a moment like that. I have the benefit of seeing that Max seems to be doing ok which is hard to believe when you are across the world and hear he has strep, flu, and pneumonia. I also have the advantage of seeing the staff’s composure and methods firsthand. I can see their reassurances firsthand and enjoy the impression that they are in control. My words, no matter how calm, are not going to stop her otherwise routine-ish flight from being the longest one of her life.


I only needed to imagine being in her shoes to reframe the ordeal as one in which I was thankful to be present. I felt fortunate to have the role I was dealt which sure beats self-pity or any other useless emotion. Every bit of uplifting perspective you can seize during emergencies is worth striving for.

2) Bedside Manner

The care at John Muir from the nurses, to the pediatrician they called in, to the overnight doctors on the peds floor was outstanding. As far as tactics, transparency, and explanations they seemed supremely competent. I felt Max is in great hands. But that feeling comes from more than competence. It’s the way they present themselves. The bedside manner. I feel invited into the process but more as a board member. While I have ultimate say, it’s clear that the folks in the trenches know what’s best. Despite that, they are never arrogant or dismissive of my thoughts yet also firm about what is called for. Combine this with the composure and even-handedness that they exhibit and it’s a masterclass in communication.


Crisis or simple brushfire, when dealing with non-experts, mind your bedside manners. Be a pro. How would an ER doctor act?

3) Focus

With a long weekend coming up and no travel plans, we were looking forward to a hike with friends, some downtime, and a chance to cross some chores off the list. Max had other plans. From the moment you decide you are going to the time warp known as the ER, you know your plans are over. More than that, all external stimuli fade to the background. The contrast is unreal. Chat messages, your reading queue, obligations, and whatever you were kind of working on in your brain’s standby mode simply fades to grey. The only thing in bold colors is the task at hand — get Max what he needs. It’s a very focusing experience. Circumstances aside for a moment. It was a state of presence I felt good in. I don’t think it’s quite the same “flow” that silent-mode advocates strive for. It’s almost the sense that nothing but what’s in front me matters. It’s the same feeling I had the day my kids were born. I think it’s a healthy feeling but it might also be irresponsible or nihlistic. I suspect that people who climb or surf big waves have found a way to bottle it. Interested in your thoughts on this.


Your “presence” capacity has headroom. Find ways to access it.

The Money Angle

Since the 1980s, there has been a tradition of Wall Street luring physicists from academia. Option math has more in common with the laws of thermodynamics than it does with accounting. But if the nature of markets themselves resembled any science it would be biology. Markets are governed by predator-prey dynamics. Models are adaptive. The actors learn. Doublethink and tradecraft.

In physics, the rules are fixed. No matter how many of us use the laws of gravity to keep firmly planted on planet Earth, gravity doesn’t get crowded. It keeps me just as bound to its surface as it did the Neanderthals. In markets, if I raise a bunch of money by showing people that selling volatility “harvests” a risk premium and the strategy continues to work then people will give me money to do it even more. So the strategy’s assets will grow both via inflows and via returns. The only problem is that to continue delivering the same performance on the larger asset base the strategy needs to sell ever more options. Assumptions of market liquidity when a strategy manages X will not hold when the strategy manages 10x or 100x. That’s about as close as we get to a physical law in finance.

The nature of liquidity is biological. It is subject to the whims of masses. It is the physical point where the backtest meets reality. Reality is a recursive, perma-learning system, with constraints and desires whose steers are pulled by investors, politicians, and corporations.

One of the best discussions I’ve ever listened to about what this looks like in practice is investor Andy Redleaf on Ted Seides’ Capital Allocators podcast. Redleaf has been in the game for over 40 years and was an early options market maker when they were listed in the 1970s. Since then he has followed opportunities that present themselves as markets change. A true agnostic on the hunt for profitable niches. Especially niches with structural reasons for being extra profitable. The advantage of this approach is that when the reasons go away, you know it is safe to cut and run. The disadvantage is that you cannot be a one-trick pony. You need to keep finding easy games.

For the full discussion of market history, where sources of edge often lurk, investing challenges today, and why he bought a bank check out the episode including my notes. (Link)

Susquehanna took their understanding of markets as biological to a logical recruiting conclusion — hire game players. Poker, Magic, chess, sports bettors. All games that require multi-order thinking and adapting to your environment. If you know anyone with a strong game background (and ideally some programming chops) check out Moontower reader Metaling Mage’s call for an intern. He’s a former Susquehanna PM.

You can reach out to him for details but it’s safe to say based on where he is now that this is could be one of the most selective Wall Street internships on the markets side of the business.

Climb Higher

Hostage negotiator Dan Oblinger has shrewd advice to improve your relationships.

Stop taking emotional bait.

A short read and insight-dense. (Link)

My highlights:

  • Manage your tone! A tone that communicates curiosity is key. Any hint of authority or rhetoric in your voice will lead back to positional negotiations.
  • Instead, step to the side. Adopt a spirit of inquiry. Ask, “How come?” Find out what has led them to choose their position today. Ask, “What if?” and explore how they see it playing out if you give in and their position becomes the new status quo. Keep exploring the new reality to see how plausible their position can be. Listen to their interests and motivations and emotions to understand the behavior that is troubling you!
  • Things to avoid:
    • Defending yourself. You merely reinforce their position.
    • Arguing. Never match their negative emotions with yours.
    • Using logic or reason to “convince”. They aren’t here to debate.
    • Counter-attack! Whatever their insult or demand is today, you won’t win by turning the tables.

Last Call

  • To the CIA, fashion is deadly serious. (Link)
  • Think twice before asking to work remote. Straight talk on the matter. (Link)
  • I’m trying to read more fiction. So I’m starting a sci-fi phase. I just finished Asimov’s Foundation and will follow that up with 2 more books from the wider series. In poking around the genre, I’ve learned Chinese sci-fi is all the rage so I will also dive into the Liu Cixin trilogy starting with The Three-Body Problem. One writer I know referred to the second book in the series as the best exposition of game theory he’s ever seen. If you are interested in why Chinese sci-fi has become so popular in the US, start with this fascinating NY Times article about translator Ken Liu (Link)
  • This video is beautifully uplifting. It’s as if this charming lady is trying to live inside a Dr. Seuss pop-up book. And the lesson I take away from it: You do you. (Link)

From my actual life 

This crazy weekend reminded me of my frequent visits to the ER as a kid. I had 4 concussions by the time I was 12. Two of them happened on vacation. My concussions are part of our entire family lore. Yinh claims, based on her independent interviews with my family, that it was actually 5. I maintain it was only 3. Mom says 4 which is the number that has stuck. We’ll never know. This was in the day that you’d bump your head and everyone would try to keep you awake for the next day as if you were now a Seal trainee during Hell Week.

Family oral histories are dotted with apocryphal stories. Playing telephone as a kid could have told you that. The dubious nature of old stories is actually a narrower instance of a rule that says most of what you know is actually bullshit. Your parents told you things their parents told them. And parents are constantly lying to their kids. But this really becomes obvious when you become a parent and realize how many untruths you say just to get through the day. I had my fair share this weekend as I told Max we were going to “get some medicine” as I pack an overnight bag to head to the hospital. It didn’t hurt that Zak, 6, was in the audience.

It’s almost impossible to not want to re-examine every fact that has calcified in your mind since youth once you accept this. And you can’t not accept it without suffering some version of what I will call “Santa Claus amnesia”. The analogy is clear if you follow Michael Crichton’s explanation of Gell-Mann amnesia:

Briefly stated, the Gell-Mann Amnesia effect is as follows. You open the newspaper to an article on some subject you know well. In Murray’s case, physics. In mine, show business. You read the article and see the journalist has absolutely no understanding of either the facts or the issues. Often, the article is so wrong it actually presents the story backward—reversing cause and effect. I call these the “wet streets cause rain” stories. Paper’s full of them.

In any case, you read with exasperation or amusement the multiple errors in a story, and then turn the page to national or international affairs, and read as if the rest of the newspaper was somehow more accurate about Palestine than the baloney you just read. You turn the page, and forget what you know.”

Somehow we suspend our disbelief that our longest-running pieces of knowledge aren’t inherited from our most dubious sources: our parents. Don’t begrudge them. It’s not their fault. It was truly out of love.

Zak and Max if you read this one day, know that that you shouldn’t die on any hills for anything I’ve ever said to you. Other than the fact that your parents love you.

And to my own parents. I don’t believe a lot of what I was told. But I love you. Thanks for taking me to the ER a lot. I know what that was like now.

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