Wonder and optionality (143)

Yes, you read that right. The 1st Law Newsletter has officially been renamed to “Thoughts as a Service”. I hope you like the new name! Reply to this email and let me know what you think :)

Maintaining wonder

We travel to create a sense of wonder. To encounter things that we do not have words for. When we cannot label, we cannot put it into a predetermined bucket with all of our connotations. When we see something we do not recognize, we see it as it is.

This is why kids can be entertained by the most trivial things. Because they have not seen it before, they have not already “understood it”, they see it as it is and experience the whole of it.

Having options

I have been reading Antifragile by Nicholas Nassim Taleb (a great book to flip through and read sections at a time btw). It got me thinking about options—not options in terms of what to order at a restaurant—options like the financial tool, but applied to real life.

The definition of an option: an agreement between two parties, where one has the right, but not the obligations, to buy or sell something at a certain price on or before a certain date. The whole point of the option is to maintain exposure to the upside, while limiting exposure to the downside.

This has obvious applications to the stock market… e.g: buying the option to sell your shares at a 5% discount. If the underlying goes up 20%, you maintain all of the upside, and if it drops 30%, your loss is limited to 5%. But where can we apply this idea to real life?

An example from Taleb: rent controlled apartments. If rent skyrockets (perhaps interest rates rise significantly) you maintain your current level of rent. If rent prices drop (interest rates drop) you can simply move to a cheaper apartment or buy your own place with a mortgage similar/ cheaper than current rent.

Another example: timeshares on boats (but definitely not a timeshare on property). By renting a boat on a timeshare, you maintain the right to have all the fun aspects of the boat (mainly taking it out on a beautiful day) while eliminating the headaches—not dealing with maintenance, not dealing with mooring in the winter, etc…

I am thinking of how to apply this to transportation around the city.

• Buying a car removes the aspect of optionality—expensive upfront, feel like Uber is a waste, sitting in traffic, maintenance, insurance, etc…

• Ubering everywhere is too expensive (although likely less expensive than having a car), and is not private, and involves waiting for drivers, option of having a terrible driver (or a great one), etc…

• Public transportation is dirty, packed, inconvenient and slow—but cheap.

Recently I have been using citibikes and lime scooters. Decent trade off being relatively cheap, faster than walking (but slower than driving/ public transportation), and door to door. They are just sometimes hard to find and too slow to go long distances… Idk, the best option is probably just my own bike.

Quotes to go

Thanks for reading!

Lucas