Edition 12: America hits reset
Also: RIP Alex Trebek, and what social capital means to technology and humanity
Of all the maddeningly drawn out weeks of 2020, this has felt like one of the longest. I was waken on Saturday morning to the sounds of celebration wafting over the city - cheers, car horns, a collective clang and clamor that prompted me to immediately check my phone for the breaking news. There it was: Biden had closed on the 270 electoral college votes needed to win, ushering in, for the first time in years, a bit of stability in politics to look forward to.
The work of healing the nation is months away from getting started, and the last dregs of Trump’s presidency and a swell in coronavirus cases stands between here and then. By all accounts, the nation continues to be stiffly, viciously divided between ideologies that make the idea of a unified America difficult to imagine. But for the first time, there’s a hope in the air: the hope that tensions will de-escalate, that we can work together again. That we can depoliticize every single thing about life in America. After four years of escalating madness, I, like most Americans, just want things to go back to normal. Whether that’s wishful thinking remains to be seen.
Sadly, this week marked the death of an icon.
It was a ritual for a long time for my family to turn on the TV at 7pm sharp to catch the daily taping of Jeopardy!. I would blurt out the answers as best I could, and I attribute all my odd trivia knowledge to the consistency of that routine. This was a ritual familiar, I’m sure, to countless families in America.
To lose a cornerstone of American culture like Trebek is heartbreaking, but given his age and diagnosis of pancreatic cancer, less of a surprise than Kobe’s untimely passing. Trebek published a memoir earlier this year, and handled his final months with characteristic grace. He leaves behind a legacy that is hard to match (he only missed one taping since 1984, for an April Fools episode) and shoes that will be impossible to fill.
“It was a dignified refusal to surrender to doom. He was the squarest possible existentialist hero: a man who holds the answer to every single trivia question, but not to the great final question of death — and yet he keeps showing up anyway, reading his clues, giving us every last answer he can.” -Sam Anderson
Perhaps, if you've spent time around today's youth, you've watched with a mixture of horror and fascination as a teen snaps dozens of selfies before publishing the most flattering one to Instagram, only to pull it down if it doesn't accumulate enough likes within the first hour.
This is a masterpiece of an essay on status, or social capital. Lengthy, but it answers some colossal questions: why do certain social media networks succeed? How do they capture our attention so powerfully? What are the incentives that invisibly, unconsciously drive us?
I’ll do my best to summarize some of the noteworthy themes:
Almost all people, by their unconscious nature, seek status. While not clearly defined, status is roughly understood to be the approval and respect of your peers. Status is something you know when you see. Chinese people called it 面子, or face, but it exists in every culture one way or another.
People want to take the easy path. Again by our default nature, humans tend to take the path of least resistance to increasing status.
Status takes many forms. You recognize status in the form of manners, or a way of speaking, or wealth. On the internet, status is likes, or a “verified” blue checkmark next to your username. Status is scarce, and people fall into hierarchies based on status.
Status is social capital. It is a form of platform-specific currency. You can earn social capital (and lose it). It sometimes transfers across platforms (for example, Taylor Swift will have followers on any social media app she touches) but usually doesn’t (though I have friends following me on Instagram, they’re unlikely to follow me to TikTok unless I make it a point to invite them).
Social capital can create financial capital. As Facebook, Snapchat, and a myriad of other social tech companies have demonstrated, social capital draws attention, and attention can be monetized via methods like advertising. Interestingly this works in reverse as well - the obsession with billionaires is an example of financial capital automatically creating social capital.
Social capital often demands “proof of work”. Status rarely comes for free. Whether in real life or in virtual worlds, significant effort must be expended to stand out and be worthy of status. Curating a drool-worthy lifestyle Instagram is a full time job.
Social capital depends on feedback loops. For someone to know how much social capital they have, they must have metrics. Consider the Youtuber mantra: “Don’t forget to like, comment, and subscribe!” The tighter and faster the feedback loop a social platform offers its creators and users, the more compelled they are to participate.
The scramble for social capital starts and skews young. This is something we intuitively know: teenagers seem to care a lot more about app-based social status than adults. The simple reason: teenagers have little else to define themselves with. They are too young to be defined by a career, home ownership, or a spouse, so they instead obsess over digital measures. Games fit in here too - excelling at a video game is another form of self-differentiation.
The desire for social capital is a form of potential energy. Consider Wikipedia: what do editors have to gain for the tireless work of cataloguing the world’s greatest encyclopedia? Not money. It’s a sense of pride and ownership, the social capital of being responsible for the proliferation of knowledge. Wielding people’s motivation to earn social capital is a powerful (but not infinite) energy source.
Overall, this essay lays out a great framework for thinking about the social games and platforms that surround us. To yearn for status is only human, and social networks have popped up all around us to help us fulfill our basic desire for acceptance and recognition from our tribe, only our tribe is now all the world’s internet-connected people, almost 5 billion and counting.
Whether you consider the roles of social networks positive or exploitive, Pandora’s box is wide open and time is only going to keep flowing forward. For those of us still concerned with earning status (given your desire for social capital naturally decreases with age), it’s helpful to know the rules of the games we play, and why we play them at all.
I didn’t take this essay as a suggestion that we should, or even could, stop caring about status. Many people deride social media and practically brag about deleting Facebook and uninstalling Instagram. That is, in its own way, a form of seeking social capital among a contrarian crowd. Removing yourself from the online social arena is one way to navigate the social capital trap, but far from the only solution.
Rather, we should recognize our own motivations and act on our impulses in conscious ways, so that we consume and create with care. It’s incredibly easy to get lost in reinforcement loops and Skinner boxes, and corporate incentives rarely have our individual best interests in mind. Understand where your desires come from, and know when you’re going too far for status alone.
As with most journeys, the destination is rarely the reward, and the accumulation of status is not a cure-all. Social capital is just one barometer by which we make sense of our lives.
Trending in the stock market
Ever since election day, an almost inexplicably powerful rally has taken place in the stock market. Though endless debate abounds on where we are in the bubble cycle, it’s hard to argue against equities as the predominant method for generating positive returns in a year like this, when little makes sense and traditional value investing seems to be going out the window. It’s hard to deny that today’s is a market built on hype and momentum.
I’ve been building an app to help myself make sense of some complicated investment strategies, as well as a suite of supporting tools that scan tickers I’m interested in. For the benefit of my readers, I’m going to start sharing a weekly roundup of trending/high momentum stocks. This is not investment advice, but information I’m happy to share.
What are you looking at? From top to bottom, these are all tickers that have had noteworthy performance in the last 10 trading days. Every day, I scan ~150 tickers for positive patterns. A stock is considered hot if it has had notably more up than down price movement in the last 90 days, with additional bias for strong performance in the last 10 days. If a stock remains hot for many days in a row, it is considered to be on a streak. The emojis simply reflect how long a stock’s streak is, and how high the volume was on the most recent trading day.
On the list this week, some standouts:
CRSR (Corsair) is a gaming hardware company that’s been benefitting greatly from the stay at home gaming boom. It’s had incredibly consistent performance recently. Also see LOGI (Logitech), growing for the same reason.
NIO is a Shanghai-based EV company some refer to as the “Tesla of China”. With the incredible growth of Tesla’s share price this year, it’s no surprise to see investors clamoring to get on board the next electric car hype train.
U (Unity) is a game engine developer that has a stranglehold on the cross-platform game market. As the world increasingly adopts AR/VR technologies, Unity is well suited to capitalize on the need for rendering 3D worlds in industries beyond gaming.
SQ (Square) is becoming a payments giant in the footsteps of Paypal with both physical retailer and digital transaction presence.
ALB (Albemarle Corporation) is the largest provider of lithium car batteries in the world - an infrastructure play on EV dominance.
That’s all for this week! As winter draws near (we had the first frigid day in a while in San Francisco), hope you’re staying warm and safe.