Essentialism

Maybe 18 or 24 months ago a coworker mentioned Mindfulness as a mechanism he'd adopted to reduce work stress, and he briefly described his journey as he recommended it to me. Some of his personal progress reminded me of Deep Work that I'd read not long before, and earlier research into Happiness and I decided to give it some thought.

I read a book or two on Mindfulness (as is my usual approach with something new), and some of it seemed a little touchy-feely and nebulous from my perspective. However, one of the books mentioned minimalism, and this resonated more strongly. I pulled on that thread, which led to Essentialism: The Disciplined Pursuit of Less, which I enthusiastically embraced. Some of it overlapped much earlier thinking I'd had back in the BigStoneHeads days. 

Somewhere along with Mindfulness I decided to pick up Journaling, and I selected Evernote as a tool to facilitate that. I also started using Evernote for my on-again/off-again pseudo-blogging on various topics. 

With Essentialism, I formalized some loose earlier thinking on Best Life and Best Self, with incorporation of specific statements and Goals. All of this came together by early 2020, and despite distractions with COVID and elections I mostly maintained the general thinking and journaling throughout the year. As was the expectation from earlier Happiness thinking, the improved focus seems to be resulting in improved happiness with my life overall, and all the intentional changes seem to be proving out. Recall that one view of happiness is "making progress toward being the best version of the person you see yourself to be", so making deliberate steps to improve yourself should result in a happier life. 

As 2020 progressed, and I increasingly tried to use Evernote to capture notes and thinking about various topics, I noted a combination of strengths and shortcomings in the tool...it was easy to use, but it wasn't always easy to manage keywords rigorously, and finding and re-using previously captured notes was clunky and effort-consuming. I again revisited earlier thinking about having a Commonplace Book, and late in the year stumbled across the notion of Second Brain which takes a more voluminous and expansive view of the same concept, and then a friend gave an unsolicited recommendation for Roam Research. That brings us to late 2020, as I moved ALL my previous blogs, journals, and musings into Roam, and I think I finally have a digital Commonplace Book that will work for me. 

In summary, for my life focus efforts I'm pretty happy with the Essentialism journey, and my self-defined Best Life and Best Self principles, and with most of my deliberate Goals. Some items, like weight loss and exercise, didn't go as well as desired this year, but I don't think that's a fault of the tool or the overall approach. I still have more aspects of my life to reign in and align, including work (day job and Side Hustle), and maybe related concepts of Eudaimonia Machine and Flow. 

Most recently, I'm now reading Digital Minimalism, and from that I'm creating my own view of Digital Essentialism. This is one of those minor epiphanies where I suddenly see that while I'd been refocusing much of my life to be more purposeful, I'd left my on-line life untouched and it was sucking up too much of the time freed by my Essentialism progress. I fully intend to take control of this aspect of my life and set the bar higher for myself in 2021. I find it satisfying already to see the various topics of Big Stone Heads, Essentialism, Happiness, Deep Work and Commonplace Book all coming together in a harmonious gestalt, fitting together and mutually reinforcing. I feel strongly that I'm "getting it right", and I'm very interested to see what emergent behaviors manifest from this new system.

Key points:

• Less, but better 
• Be deliberate about how you spend your time -- your attention is the most valuable asset you have 
• Be explicit about what is important to you -- the "why" and major themes of your existence 
• Prune off aspects of your life that do not align, starting with ones that are negative or destructive, then those that are ineffective or distracting, and finally improving efficiency of those that clearly should remain. 
• There is as aspect of minimalism, but not minimalism for minimalism sake; instead, decluttering to provide space for essential focusing. 
• Life satisfaction, and then happiness, with a long-term goal of a "life well lived" is the intended result. Career success is perhaps a nice-to-have.

 

• Bibliography:
  • Mindfulness for Beginners
  • Essentialism: The displined pursuit of less
  • Declutter Your Life: Minimalism and Essentialism
  • Free to Focus: A Total Productive System to Achieve More by Doing Less
  • Indistractible: How to Control Your Attention and Choose Your Life
  • Deep Work: Rules for focused success in a distracted world
  • Digital Minimalism: Choosing a focused life in a noisy world

Big Stone Heads - A Prospective

I should probably note for general information that any text in atypical capitals means it's a specific topic of thought in my Second Brain (the evolution of my Commonplace Book). 

Last time in the Retrospective we covered a LOT of years of recent history, and asked a lot of questions. But what about the future (which, incidentally, is all we can do something about), instead of the past?

What of our current economy will best survive the post-Fed bubble-pop? What will endure and survive any restructuring that will eventually come along with the Rise and Fall prognosis? What about a post-Capitalism shift that is probably coming with AI and automation making in-roads into human employment?

Perhaps just as importantly, how do I want to spend my remaining career time and personal efforts? Do I want to keep gears spinning in the big Sand Castle machines of international engineering machines, or should I focus more specifically on a specific area, or even dare to strive to build a Big Stone Head?

Economics:

• We are almost certainly headed for some form of crash and serious correction, and probably a restructuring more painful than 2008. Since 2009, we've vastly expanded our national debt spending. Already we have bizarre phenomena occurring, and probably this weirdness will not persist. I struggle say "when", but I think "as soon as the Fed stops spending, and some inciting event occurs".
  • Brooking's projects that it will take several years for consumer spending to get past the pandemic setback. This means bad things for a lot of service workers and for many businesses. https://www.brookings.edu/blog/future-development/2020/12/14/the-decline-and-recovery-of-consumer-spending-in-the-us/?utm_campaign=Brookings%20Brief&utm_medium=email&utm_content=103005940&utm_source=hs_email
  • Realistically, as soon as we're past one crash, another is brewing. Usually we have something every 7-10 years, and a larger one every 30-60. Dalio says every 80-100 we should expect a "restructuring". The COVID crash is going to shift the landscape for the current cycle, but it's not clear it actually cleared any of the old bubbles and debt, so I think more pain is yet to come.
• Deflation? Inflation? I think as long as the US is still the primary reserve currency, any global stress will cause a flight to dollar, which coupled with purchasing collapse will be deflationary. This is the common US response since business supports are stronger than individual supports, so most big crashes are going to be demand-implosion-driven. When the Fed acts, it will be inflationary, but more-so if our reserve status is weakening. So far, we have not much seen this, and the dollar remains pretty strong, but it will eventually weaken.
  • Carrying debt will be risky, as loss of work and strengthening dollars will hurt those with debt. This is the mode we're in today, for example, in housing. Food is up in price, but energy is way down. Even without actual deflation, debt can be hazardous. The recession taught us "prices may be low, but that doesn't mean you have any money to buy stuff with".
  • Making it through the first phase and into the spending phase will mean that debt will inflate away...maybe. This will be a hard pattern to time it through. Inflation can pay off debts for you, but income increases lag expense growth, and those near the edge may fail.
  • There is always the possibility of stagflation, if we loosen up creation of money and the dollar re-positions. The next variant may be different, with job challenges driven by automation and AI while prices increase, and all scramble for few jobs.
• End of superpower? End of reserve currency?
  • Honestly, I think Rise and Fall of Empire will be more of a concern for my kids -- I'll probably retire before the next restructuring, so my goal is to simple "hide" assets from major impacts of such shifts so I can survive my latter years. As for durable professions, it's always safe to address the lower layers of Maslow's Hierarchy -- you're better off addressing existential needs than minor luxuries when TSHTF, especially in a situation where those who buy luxuries are being dragged off to guillotines and gulags. People always need places to live, and they need food, water, and the basics of communications and transportation. People who just keep things working are in pretty high demand during any downturn.

Personal Legacy

• I'd like to at least more intentionally build Sand Castles for forward-looking industries. The whole world runs on Sand Castle building, so this isn't a bad thing, per se, it just won't provide strong self-actualization if you look at your legacy this way.
• If I can manage it, I'd like to make attempts at building Big Stone Heads.
  • Sure, I'll support family and community -- replicating DNA is a pretty basic target.
  • Technology, such as increasing Economic Complexity, is a good goal. This is how we keep our local community and US economy vibrant.
• It might be easier than it seems to accomplish this, as most people don't think in terms of creating durable, replicating information or expanding Economic Complexity. It's not quite a Blue Ocean Strategy, but it's close. In my experience, it's not hard to accomplish things when the rest of your organization is moving randomly and you push hard in one direction; the trick is in convincing yourself which way to push!

Investments - What will I do?

• Keep the barbell - part really safe, part very risky, not much in the middle. I've always struggled on the risky side -- my life is too "safe".
• The "safe" end includes wholly-owned property, cash, and metals. This, for me, is quite attainable.
• "Safe" retirement investments include US property, US bonds, Int'l bonds, as low-risk but not large volume investments. These are valuable in a deflationary situation, or a status-quo future.
• The risky end? This is high-return to beat inflation in debt-collapse futures, or upside wealth in good times.
  • US equities - high-alpha stocks, probably?
  • Int'l equities - same as for US, only geographically hedged with EU and Asia.
  • Maybe a property bought with credit? A resort AirBNB? A 4- or 6-plex in a college town? The debt is the risk, so in a bad case this gets foreclosed...in a good case, it pays itself off.
  • Maybe a start-up business? This is the fun one to think about, but the hardest by far.

 

Big Stone Heads - A Retrospective

• Big Stone Heads thinking goes back to 2005-2007...almost 15 years already! This was the appellation I came up with for part of human endeavors, and since I was for the first time starting to put my thoughts on life, economics, and everything down in writing, it sort of stuck for the overall effort.

  At the time, I was tracking "peak oil", and striving to see a path through a demand-driven price run-up, my prediction of associated economic stresses popping the post-2000 bubbles, the resulting inevitable (in my view) major economic crash, and then divining what would come next. Would it be a deflationary crash with a run to dollars, or a crash-then-bailout leading to inflation (as the end-of-the-US-dominance people thought)? Would it be a V or a U recession, or even an apocalyptic TEOTWAWKI? Would it be the "end of oil", as a true peak, or just a local maxima? My friend Fred was very bullish on technology, as I always had been, but I was pretty sure any technical solution would not come quickly, and I wasn't sure oil volumes would ever recover. For something as existential as oil, I was unwilling to blindly believe that technology alone would quickly suffice. After getting hit pretty hard by the 2000 recession, I was motivated to not get caught wrong-footed. It was pretty clear to me that an oil-driven price shock would hit over-stretched consumers, and then equities. I was sure enough by 2007 to get my modest investments out stocks and into bonds, cash, and some gold. I was also pretty sure that regardless of whether we had a recession or society disintegrated, those on the "non-discretionary" side of the economy would do much better than those in "luxury services". I wasn't sure how telecom would do, given the slide after 2000, so I changed careers and shifted to the oil and gas industry, with an expectation that oil would be good for at least a decade and get my kids up and out...and maybe get me to retirement.

  As it turns out, Fred and I were both right; the crash occurred, conventional oil has never surpassed the levels of mid-2000s, and technology in the form of shale oil eventually came to rescue the US economy and the global oil volumes. It also happened that telecom did just fine for the past 15 years, as smart phones like the new iPhone hit the markets at about that time. The markets indeed did crash, and by then I'd projected it would be a demand-driven crash, so it would be deflationary here and dollars would be short due to a global view of safety, and indeed it was. Dollars and gold did great, and I was too slow getting back into stocks...I definitely learned "don't fight the Fed!", but still I think I did better than many.

  While thinking all of that through, and considering careers and the future, I came up with mental models of how I and most others spend their time, and I had an informal e-mail "blog" with some family and friends comparing thoughts. It was during this period that "Big Stone Heads", my term for this thinking, came into being. Big Stone Heads are one of 3 categories of human effort, as described below, and I was convinced that going into a recession the "non-discretionary" part of the economy wasn't going to be peacock feathers, but probably consumable stuff -- the more durable of sand castles.

  • Big Stone Heads - Large, conspicuous creations built to impress, and to persist. Moai on Easter Island, great pyramids, the Mona Lisa, calculus, and the Theory of Relativity are all examples of this. My friend Lissa helped me latch onto this, and encouraged me to keep thinking along these lines.
  • Peacock Feathers - Conspicuous show-off displays to attract mates, or recognition, or notoriety....and short-lived. F150 grocery-getters, McMansions, and private planes all are examples.
  • Sand Castles - Stuff that takes a lot of work and seems like worthwhile accomplishment, but that fades to nothing with the passage of time. This is what most of us spend our lives doing, personally and professionally. Eventually a routine high-tide, a major storm, or the long-term effects of rain and wind will reduce all such to nothingness. "And to dust we return." This is perhaps a bit fatalistic, as much is quite durable, and as "cogs in the machine" what we do sometimes contributes opaquely to global success.

  So, all of that worked out fine, and the kids are mostly through college and out, and oil has again had a demand crash with COVID, but now there are new pressures of EVs and climate change, plus concerted price competition from OPEC and Russia, and demand competition from China. Since I already had a recession playbook, as soon as COVID hit China I hit "replay" on my 2007 moves, and only slightly lagged getting back into the market, losing some of the recovery, but it was at least stress-free.

  What does the future hold now? We are still in "don't fight the Fed" mode, but we've never really recovered from the last crash -- we've just spent (borrowed?) our way into new bubbles. With COVID funds, we're back to that again. The bubbles are big and overlapping, and it's not clear to me how these will pop when the Fed is determined to keep blowing, but I am positive that the market will eventually move to address it.

  For me, I have a stack of questions to resolve:

  • What's the future of US on-shore oil? That, as always, comes down to "at what price?" Somehow this was a topic that peak-oil adherents and economists always miss...projects of quantity always show slow growth, but as with shale oil, increased production is always a function of technology and economies of scale offsetting resource scarcity. Clearly, $40 means decline in production, and $100 (in 2008 dollars) meant economic slowdown, and $100 is the price that KSA wants to see, but so far cannot manage to attain. At $100, wind and solar are clear winners, and nukes almost make sense. At $40, wind is competitive, and solar gets close, but intermittency remains an issue.
  • US shale has been built on loose investment money, so it's actually part of the easy-Fed bubbles, but benefitting the US economy overall. And yet, with cheap oil, rather than raising gas taxes and improving our infrastructure, we've just relaxed CAFE improvements and gotten bigger vehicles. We are squandering the "second chance" of oil, and ignoring climate change as we go. How long will we (the US and the world) stay on the oil-fed, car-centric direction?
  • Where will fusion fit into the future on top of renewables, and when, and at what cost?
  • How will we address intermittency? Will batteries drop in price, or will we adjust to higher energy costs?

  Personally status check: will oil and petrochem carry me through to retirement, and am I happy with this trajectory? Would I be happier on a "greener" path into the future?

  Speaking of happiness, what about legacies? As we go into 2021 and the end of COVID, I am trying to decide if there are any "big stone heads" in my future, or am I happy building sand castles? Since 2007 or so, when I developed this model, I've learned a LOT about information, and complexity, and entropy, and the spontaneous generation of information by dissipation structures in energy gradients at every scale. Big Stone Heads are simply durable information trying to hide out from entropy.
  
  What are perhaps some accessible Big Stone Heads? Well, the most common example for the masses is DNA -- replicate and perpetuate the particular patters of DNA that make you up, and the universe will be happy. So, raise kids and grandkids, and support communities of people around them. Check - I can do this!
  
  Is there more? Mathematical theories are great, and so is timeless art -- these are effectively eternal. But I am neither a mathematician or an artist.
  
  Open source? Computer code is a pretty good example of persistent, replicating, information. It will last a long time (we don't really know how long, but COBOL built in the 60's, which SHOULD be a sand-castle, is somehow still standing), and it can shape the world while expanding the flow of other information. I like the sound of this.
  
  Previously I noted useful life extension, AI, quantum computing, and fusion as "big bets". I think I'd be happy helping with any of those, but how to get there from where I am now? Is it good enough to support technology from the underpinnings, as I have always done, helping migrate emerging technology into existing industries?
  
  Short answer: I am not sure.
  Long answer: Stay tuned for part two.