Practicing Wisdom — Issue #8
1. What I Learned This Week
Theme: The Hidden Architecture of Power
This week, what began as an exploration of hacking, capital markets, and investing ended in a familiar place: how invisible power structures shape our lives — not through force, but through architecture.
What unites a hacker’s worldview, an investor’s blind spot, and a founder’s downfall is not obvious. On the surface, these domains couldn’t be more different. But beneath them lies the same force: systems encode power silently, and only those who look beneath the surface can rewire their fate.
Pablos Holman, the hacker-inventor, lives to dismantle surface-level assumptions. His whole ethic is: “What can I make this do?” But what struck me wasn’t just his mischief — it was his deep frustration with the world’s lack of imagination. We build systems to defend the status quo, not to explore possibility. Hackers, like artists, inventors, and rule-benders, get exiled to the margins — until we need them.
Most people never even see the systems they’re inside. Secret CFO covered the FanDuel transaction, where founders technically held 40% equity — and yet walked away with zero when liquidation preferences kicked in. On paper, they were owners. In practice, they were passengers. The legal structure of capital quietly reallocated power — and when the moment came, the math overruled the mythology.
It’s the same sleight of hand in public markets. Eric Cinnamond’s piece on quality stocks reminded me of this quote by Howard Marks: “There’s no investment so good that you can’t ruin it by overpaying.” Investors are crowding into quality not because they understand risk — but because they want the comfort of owning something that looks timeless. The risk isn’t in the business — it’s in the price. But the architecture of a “responsible portfolio” hides that from view. Investors delude themselves with quality narratives — while the math silently stacks against them.
And then there’s the tragicomic beauty of Robinhood replacing Caesars in the S&P 500. What looks like a changing of the guard is actually a continuation of the same power dynamic: retail players playing a game designed by someone else. Whether you’re gambling in Vegas or trading stocks on your phone, the house always wins. It’s just that the house now wears a hoodie and charges no fees.
Here’s the uncomfortable truth this week’s reading kept circling: power doesn’t announce itself. It’s structural, not theatrical. It hides in term sheets. It hides in index reshufflings. It hides in investor presentations and API calls. If you don’t examine the architecture — the assumptions, contracts, incentives, and defaults — then you’re not really playing the game. You’re being played by it.
The difference between survival and irrelevance — between a hacker and a pawn, a founder and a ghost, an investor and a bagholder — lies in whether you see the system or just live inside it.
Sources Referenced
“Pablos Holman — One of the Scariest Hackers I’ve Ever Met” — Tim Ferriss Podcast (link)
“Casino Royale” - Net Interest (link)
“Crowding Into Quality” - Palm Valley Capital Management (link)
“Capital Design Structure IV - From Angels to IPO” - Secret CFO (link)
2. Key Distillations
“Equity is not ownership — it’s a negotiation.” What you hold on a cap table isn’t what you own. It’s what you negotiated in the fine print.
“You can’t disrupt the house if you’re playing by its rules.” Whether you’re gambling or trading, the system was built for someone else to win.
“Inventors build the future, while lawyers calcify it.” A painful truth buried in every startup’s cap table.
“True intelligence is the ability to ask, ‘What else could this be?’” The hacker’s mindset applies to everything — not just machines.
3. One Contrarian Viewpoint
“High-quality stocks are the new speculative assets.”
Walmart at 40x earnings. Coca-Cola once at 48x. Investors think they’re avoiding speculation by buying ‘safe’ names, but they’re just shifting the risk from fundamentals to valuations. The irony? It’s easier to justify a bubble when it’s wearing a suit and tie.
4. One Investable Idea
Prediction markets are sneaking in through the sports betting door.
Robinhood’s entry into prediction contracts — disguised as sports betting — could signal a larger trend: financialized forecasting. Unlike sportsbooks, which set the odds, Robinhood is building a marketplace where traders set prices. It’s not just about betting on games — it’s about creating a liquid market for opinion, probability, and narrative. If Kalshi (their partner) becomes a new CME for the attention economy, the upside could be enormous.
5. From the Archives: A Recall Highlight
“Your map is not the terrain — and someone else drew it.” (From Issue #4)
A reminder to question not just where you’re going, but whose system you’re navigating.
