"Bob says we should buy a computer. Sue says we shouldn't. Therefore, the best solution is to compromise and buy half a computer."
Benjamin Libet, a physiologist at the University of California, San Francisco did experiments in the 1950's that revealed how delayed our reactions just might be. Burkhard Bilger in the New Yorker, in a story about scientist David Eagleman, writes:
Libet worked with patients at a local hospital who had been admitted for neurosurgery and had had a hole drilled into their skull to expose the cortex. In one experiment, he used an electrode to shock the brain tissue with electrical pulses. The cortex is wired straight to the skin and various body parts, so the subjects would feel a tingle in the corresponding area. But not right away: the shock didn’t register for up to half a second—an eternity in brain time. “The implications are quite astounding,” Libet later wrote. “We are not conscious of the actual moment of the present. We are always a little late.”
Libet’s findings have been hard to replicate (zapping a patient’s exposed brain is frowned upon these days), and they remain controversial. But to Eagleman they make a good deal of sense. Like Kublai Khan, he says, the brain needs time to get its story straight. It gathers up all the evidence of our senses, and only then reveals it to us. It’s a deeply counterintuitive idea in some ways. Touch your finger to an ember or prick it on a needle and the pain is immediate. You feel it now—not in half a second. But perception and reality are often a little out of register, as the saccade experiment showed. If all our senses are slightly delayed, we have no context by which to measure a given lag. Reality is a tape-delayed broadcast, carefully censored before it reaches us.
“Living in the past may seem like a disadvantage, but it’s a cost that the brain is willing to pay,” Eagleman said. “It’s trying to put together the best possible story about what’s going on in the world, and that takes time.”
The Sarbanes-Oxley Act was passed in 2002 in reaction to accounting scandals by Enron, Tyco, and Worldcom. It radically increased the cost of reporting to public markets. As an unintended consequence, it has delayed IPOs for hundreds of companies, and by the time they IPO, much of the expected increase in value has already been captured by private investors at much lower valuations.
Scott Kupor's guest post in the A16z blog details the implications:
Microsoft went public in 1986 at roughly a $500 million market cap. Today, Microsoft has a market cap of $234 billion. Thus, the public investors in Microsoft have had the opportunity to realize $233.5 billion in market cap appreciation; the private investors had only a $500 million head-start. From IPO, a single share of Microsoft stock has appreciated close to 500x.
Facebook, by contrast, went public in 2012 at roughly a $100 billion market cap. That means that, whatever public stock price appreciation Facebook has over the coming years, private investors have had a $100 billion head-start against the public investors. Even if you were prescient enough to buy Facebook at its public low of approximately a $50 billion market cap, the private investors remain way ahead. If you bought Facebook stock at its IPO, to realize a similar multiple that Microsoft’s public shareholders have earned, Facebook’s market cap would need to reach nearly $50 trillion, roughly the size of the total market capitalization of all publicly-traded companies in the world.
We are quickly creating a two-tiered investment market—one for wealthy, accredited individuals and financial institutions and a second for the remaining 96% of Americans.
If you are an accredited investor (which the rules define as someone with annual income of at least $200,000 or a net worth of $1,000,000), you can buy or sell privately-held stock of high growth, startup companies via exchanges such as Second Market and SharesPost. If you are an accredited investor, you can become a limited partner in one of over 400 venture capital firms that invest in such companies. If you are an accredited investor, you can buy privately held stock of such companies directly from the issuing companies themselves.
However, If you are among the 96% of Americans that are not accredited investors, you can wait the 9.4 years that it takes for the average startup to go public and miss out on all of the price appreciation in the private markets that inures to the benefit of accredited investors.
"The greatest thing by far is to be a master of metaphor; it is the one thing that cannot be learnt from others; and it is also a sign of genius, since a good metaphor implies an intuitive perception of the similarity in the dissimilar."
—Aristotle, De Poetica
Fascinating profile in this week's New Yorker by Larissa MacFarquhar about a monk, Ittetsu Nemoto, who found his own path. The You Don't Have Time to Read The New Yorker tumblr explains:
But that's where it gets interesting, as MacFarquhar writes:
Monk training is tough. It seems closest to military school, except more suffering. Sleeping four hours a night, having practically no time to get dressed and only allowed to eat rice and pickles, freezing temps, flimsy clothes, no reading allowed, lots of clanging bells to mark the changes in your day. The idea is that all of that suffering and scrambling around eventually forces your body to (a) become acutely aware of itself and to become seamless and efficient under pressure and (b) eventually find an untapped surge of strength to power you through with energy you didn’t know you had, such that you feel that only then have you begun to truly live, and that everything before was not the real you yet. Empowering suffering.
Burgers and happiness. It's a subject I think about quite a lot.
After four years of rice and pickles, he found the idea of flipping burgers appealing. Sure enough, it was such easy work compared with his training that he felt happy all the time. People said hello to him, they told him he was doing a good job, they asked him if he was OK back there, was it too hot, did he want some water? It was incredible! Soon his cheerful demeanor began to attract attention. Nobody could understand why he was so happy flipping burgers; everyone else at the restaurant was miserable. People asked him what is secret was, and he told them about the monastery. They started talking to him about their troubles — some of them about how they had considered suicide — and he found he had a knack for helping unhappy people change the way they thought.
Ittetsu Nemoto found his path. It's quite a unique one at that.