Eight years ago, when I first invested in VIP Industries, I had no idea what kind of journey I was starting on. My investment was scattered through these eight years (Figure 1) and it was more of a diversification mechanism rather than investment backed by research. I have bought VIP suitcases and bags. They turned out to be good. So the stock must also be good.

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This wonderful post from Soonly talking about our metaphorical electric fences which stopped working years ago.

The person who reaches out first isn’t the weak one. They’re the one who discovered the fence is broken. They’re the one running free while everyone else stands on their safe little porches, barking at the world but never joining it.

Your breakthrough isn’t on the other side of productivity or success or self-improvement. It’s on the other side of that text you’re not sending. That call you’re not making. That “I miss you” stuck in your throat.

The electric fence between you and the people you care about? It hasn’t worked in years.

But you’re still standing on the porch.

Steve Wozniak responding to a comment on how selling off his Apple stock was a bad decision.

I gave all my Apple wealth away because wealth and power are not what I live for. I have a lot of fun and happiness. I funded a lot of important museums and arts groups in San Jose, the city of my birth, and they named a street after me for being good. I now speak publicly and have risen to the top. I have no idea how much I have but after speaking for 20 years it might be $10M plus a couple of homes. I never look for any type of tax dodge. I earn money from my labor and pay something like 55% combined tax on it. I am the happiest person ever. Life to me was never about accomplishment, but about Happiness, which is Smiles minus Frowns. I developed these philosophies when I was 18-20 years old and I never sold out.

Thomas Dohmke—ex CEO of Github—shares his take on the AI vs Developer+AI argument. He still thinks developers will need to get their fundamentals right, review and verify AI generated code, understand and design. But then also acknowledges that AI is going to bring in a significant change in the way developers code in the future.

Developers rarely mentioned “time saved” as the core benefit of working in this new way with agents. They were all about increasing ambition. We believe that means that we should update how we talk about (and measure) success when using these tools, and we should expect that after the initial efficiency gains our focus will be on raising the ceiling of the work and outcomes we can accomplish, which is a very different way of interpreting tool investments. This helps explain the – perhaps unintuitive at first – observation that many of the developers we interviewed were paying for top-tier subscriptions. When you move from thinking about reducing effort to expanding scope, only the most advanced agentic capabilities will do.

The last sentence in bold ties back to the title of this post.

Colton Voege arguing that AI is not making software engineers 10x as productive.

10x productivity means ten times the outcomes, not ten times the lines of code. This means what you used to ship in a quarter you now ship in a week and a half. These numbers should make even the truest AI believer pause. The amount of product ideation, story point negotiation, bugfixing, code review, waiting for deployments, testing, and QA in that go into what was traditionally 3 months of work is now getting done in 7 work days? For that to happen each and every one of these bottlenecks has to also seen have 10x productivity gains.

Any software engineer who has worked on actual code in an actual company knows this isn’t possible.

AI is making coding—which is a small portion of what software engineers do—10x productive. That too, sometimes. Colton Voege touches upon quite a few other topics. A worth while read.

M. Pattabiraman talking about risks for parents who have achieved FIRE i.e. Financial Independence, Retire Early.

We learned work ethic by observing our parents’ struggle — watching them juggle job or housework or both, watching them stress over monthly bills, witnessing the family make sacrifices for long-term goals. These experiences, while challenging, instilled us with crucial life lessons about effort, delayed gratification, and the value of money.

Today’s FIRE parents like me present their children with a dramatically different reality. Instead of 6 AM commutes and weekend overtime, kids see parents working flexible schedules, pursuing passion projects, and taking spontaneous vacations. While this lifestyle represents the ultimate financial success, it may inadvertently communicate that money comes easily and life should be perpetually comfortable.

Dan Amoss talking about the incoming risks to passive investments.

These funds don’t try to beat the market. They are the market. They buy stocks based on their size in the index, no questions asked.

On the surface, this passive revolution appears brilliant. Passive funds are cheap, with management fees close to zero. They have performed well in the past. And they require no effort.

But like so many financial innovations that seem too good to be true, this one comes with hidden risks that few investors understand.

According to Mike Green, chief strategist at Simplify Asset Management, this passive revolution has created unintended side effects that could end in disaster.

Green calls passive investing the “giant mindless robot.”

Why?

Because when new money flows into index funds, it doesn’t sit on the sidelines. This money flow is not completely isolated from the index it tracks. Rather, it buys stocks immediately. And not just any stocks. It allocates the largest share of incremental purchases to the largest stocks (like Apple, Microsoft, Nvidia, and Amazon) because those names dominate the index.

This creates what economists call a “price-insensitive buyer” – the most dangerous type of market participant. The money flows in, the big stocks get bigger, and the index rises. That rise draws in more money, which buys more shares, pushing prices even higher.

It’s momentum on autopilot.

Here’s where Goodhart’s Law reveals the fundamental problem. The index has become the target of trillions of dollars in retirement accounts, pensions, and ETF flows. It’s no longer as good a measure of economic strength as it once was!

The post is written from a US perspective, but I believe something similar will play out in India over the coming decades.

Vishal Khandelwal explaining outcome bias.

…Outcome Bias, which leads us to judge the quality of a decision based on its result, instead of the thought or process that went into it.

So, as long as the outcome is favourable, we assume the decision was good. When it turns out badly, we blame the decision, even if it made perfect sense at the time.

…

The real problem is that outcome bias not only distorts our view of the past, but that it shapes our future decisions. If a bad decision leads to a good result, we often reinforce it. We do it again. Worse, we up the stakes. It becomes a habit. And like my friend, we trust the pattern until it breaks. When that happens in investing, it may lead to financial ruin.

Outcome bias also leads us to punish good behaviour unfairly. Imagine someone who stuck to their asset allocation plan, avoided chasing hot stocks, and rebalanced regularly, but ended up underperforming in a year when speculative bets did well. That person might feel foolish, even though they followed a sound process.

The irony is that the more disciplined your process, the more often you’ll look wrong in the short term.

Steve Krouse sharing an analogy that vibe coding is like giving child a credit card. The child gets instant gratification, but at the end of the month you need to pay the bill.

The worst possible situation is to have a non-programmer vibe code a large project that they intend to maintain. This would be the equivalent of giving a credit card to a child without first explaining the concept of debt.

As you can imagine, the first phase is ecstatic. I can wave this little piece of plastic in stores and take whatever I want!

Which is a lot like AI can build anything now! Nobody needs to learn how to code! Look at what it just made for me!

But if you wait a month, you’ll get the credit card bill. Did I actually need to buy all those things? How will I get myself out of this hole?

It’s similar for the vibe coder. My code broken. What do all these files and folders even do? How will I ever get this fixed? Can I get a refund for the $400 I spent vibe coding?

If you don’t understand the code, your only recourse is to ask AI to fix it for you, which is like paying off credit card debt with another credit card.

I saw this post on Hacker News and there was this comment that caught my eye.

Non-technical or junior people developed and deployed applications, emboldened by the relative ease of Microsoft Access and Excel. There were all kinds of limitations, scaling problems, and maintenance nightmares. But there were a lot of upsides too, and it made the “professionals” up their game to obviate the need for such adhoc and unsanctioned developments.

Come to think of it, the exact same thing happened when the PC became popular. Mainframe people were aghast at all the horrible unprofessional mess that the PC people were creating.

This in turn reminded me of the quote from Micha Kaufman.

You must understand that what was once considered ‘easy tasks’ will no longer exist; what was considered ‘hard tasks’ will be the new easy, and what was considered ‘impossible tasks’ will be the new hard.

These historical perspectives and statements drive me to a conclusion—vibe coding is here to stay. We will have people on both end of the spectrum. Some folks will rack up huge credit card debt and go bankrupt. Others will use the credit card wisely and travel free with the accumulated reward points.

Tim Harford explains why you shouldn’t forget the boring stuff. Some pretty good examples.

…smooth, successful operations are uninteresting, and uninteresting matters tend to be neglected. Eventually they stop working well, at which point they become interesting again. 

This is certainly true of the AC waveform. It seems boring because it has felt like a solved problem. Yet, as with low inflation or herd immunity from measles, if we allow the foundations of a success story to be eaten away, we find that the problem isn’t quite as thoroughly solved as we assumed.

…

Success leads to boredom. Boredom leads to neglect. Neglect leads to failure. Failure is no longer boring. But if we don’t show more interest in the successful systems we have built, they may suddenly become far too interesting for comfort. By the time these boring topics start seeming interesting, it’s too late.