Practicing Wisdom Issue #2

1. What I Learned This Week

Risk, Reality, and Recalibration

This week’s readings covered seemingly disparate domains - finance, work culture, AI and the social and psychological pressure of giving up. Upon digging deeper however, a common thread emerged: how we manage uncertainty in systems too complex to fully control—whether companies, spreadsheets, or lives.

Alan Waxman’s conversation on Invest Like the Best grounded the idea that great investing is less about maximizing returns and more about deeply understanding risk. His obsession with unitizing risk and return—across asset classes, geographies, and capital structures—felt almost philosophical. It's not just, “What’s the upside?” but “What am I actually risking for it?” That calibration—especially in dynamic markets—requires humility, structure, and an appetite for adaptive thinking. To be clear, this was not a suggestion that everything can simply be mathematically modeled down to a science - it is rather a system for trying to better understand the potential returns per unit of risk (or uncertainty) and making sure resources are properly prioritized and allocated accordingly. It became clear that this type of flexible thought process is what has unlocked Sixth Street to be a type of “go anywhere, do anything” firm.

Contrast that with Benn Stancil’s reflection on automating analysis. In his piece, the real concern isn’t whether AI can do the math—it’s whether we can trust the math. Because unlike code or products, analysis isn’t self-validating. A chart doesn’t crash if it's wrong; it just quietly misleads. And so we’re left with faith—trusting models we can’t audit, trusting outputs we can’t always reverse engineer. It seems as though where AI’s outputs can be validated easily (as of now, this usually means a subjective validation of something creative in nature i.e. an ad or writing where no true answer exists) the results are phenomenal and feel like magic. I still have not figured out how we make the same thing true for non-subjective areas where the results are particularly challenging to validate.

Then there’s Cate Hall’s powerful essay on quitting, which might as well have been a masterclass in sunk cost psychology. Her framework for walking away—from a startup, from a high-powered legal career—wasn’t driven by fear or failure. It was driven by recalibration. Life, like capital, has a finite run rate. Quitting, in her telling, isn’t a collapse of conviction—it’s the ultimate form of it.

Dror Poleg's analysis of Nvidia revealed a similar insight on a macro scale: the most valuable company in the world thrives not by owning more things, but by owning more adaptability. When 98% of a firm’s value is intangible, rigid structures collapse under their own weight. You don’t manage that complexity by tightening control; you manage it by widening trust.

And finally, Secret CFO’s tactical guides on working capital and cashflow culture reinforced how real-world friction reveals your operational truths. It’s easy to talk strategy when times are good—but it’s in the invoice disputes, the ERP misfires, and the payment term battles where you see who actually understands the system they’re running. Culture isn’t what your deck says—it’s what your people do when no one’s watching the cash ledger.

In short: whether capital, time, or talent—the highest-leverage decisions this week weren’t about chasing more, but about recognizing limits, managing risk, and creating space for better bets.

Sources Referenced

“15 Ways to Drive Working Capital” — CFO Secrets (link)

“How to Build a Cashflow Culture” — CFO Secrets (link)

“Can Analysis Ever Be Automated?” — Benn Stancil, Substack (link)

“Building Sixth Street - Alan Waxman” — Interview with Patrick O’Shaughnessy, Invest Like the Best (link)

“In Praise of Quitting” — Cate Hall, Useful Fictions (link)

“It Worked for NVIDIA, Could it Work For You?” — Dror Poleg (link)

2. Key Distillations

• “Don’t just measure ROI—measure runway.” - Cash is the oxygen of operating freedom, and yet most dashboards ignore its pulse.

• “Automation doesn't eliminate work—it just hides it.” - The labor once spent building a model is now spent verifying it, interpreting it, or cleaning up after it.

• “Every fund has a theme. Great funds know when to leave theirs.” - Sixth Street’s 12–36 month theme shelf life is a lesson in letting go before markets—or egos—trap you.

3. One Contrarian Viewpoint

“Seeing it out” is overrated—at least past a certain point.

We’re told that persistence is the path to greatness. But Cate Hall’s essay reminded me that tenacity without recalibration isn’t discipline—it’s delusion. Most people aren’t failing because they quit too early. They’re failing because they stayed too long in a game that no longer fits the bet they should be making. Walking away isn’t weak. It’s strategic entropy. And in a world of compounding asymmetries, quitting fast is sometimes the most rational form of long-term commitment.

4. One Investable Idea

Cash-First Enterprise Software

From Secret CFO’s writing, it’s clear that even well-run companies routinely trap millions in poor invoice hygiene, misaligned payment terms, or weak cashflow culture. And yet, most enterprise software still treats cashflow as a reporting output, not an operating input.

This week’s opportunity is around making cashflow friction visible and actionable—tools that proactively flag invoice inconsistencies, simulate working capital levers, or nudge payment behaviors via embedded incentives.

In a capital-scarce environment, CFOs will pay for tools that help them unlock liquidity without raising capital. The TAM isn’t ERP. It’s working capital as a service.

5. From the Archives: A Recall Highlight

“Capital discipline, outsider thinking, and decentralization beat charisma every time.”

From The Outsiders — still a timeless blueprint for leadership that trades style for substance.