John Tamny Reviews Mark Spitznagel’s Safe Haven
It’s a Silicon Valley truism that there’s little point to patenting a good business idea. If it’s truly good, it will be roundly rejected. More specifically, the potential of what’s a great likely won’t be understood. Think about it. If a good idea were already understood, it would no longer be an idea. It would instead be an existing business concept.
This basic truth is too often forgotten vis-à-vis China. Supposedly the Chinese are “stealing” our intellectual property, but what could they take? The greatest commercial leaps of tomorrow are concepts wholly dismissed in the present. As for copycatting, what’s easily reproduced probably isn’t very valuable in the first place.
When it comes to genius, we insult it when we pretend that it can easily be imitated. Furthermore, what’s genius is generally only apparent well after the fact. See the first paragraph.
All of this and much more came to mind while reading Save Haven: Investing for Financial Storms, Mark Spitznagel’s very excellent follow up to his very excellent 2013 book. The Dao of Capital. While it’s probably true that “brilliant” and “genius” are words too frequently used in modern times, thus inflating away their meaning, it’s safe to apply both of the adjectives to the Universa Investments founder and CIO while wholly confident that neither is excessive.
Spitznagel is quite simply fascinating, and his mind full of what’s endlessly interesting. Though his knowledge of investing could surely fill a library-size collection of books, the relatively slim (in length) Safe Haven is Spitznagel’s effort to better understand how he and his Universa colleagues invest by explaining the philosophy to those who can’t. And won’t.
Yes, you read that right. Per the author himself, the lessons within Safe Haven are “not to be attempted by nonprofessionals.” More important, he’s clear that he’s not even conveying an approach to investing that could be attempted “by most professionals.” As Spitznagel sees it, “professionals” would likely struggle with his approach the most precisely because it’s so unorthodox.
Spitznagel can write a book meant to shed light on how he invests, and he can do so comfortably precisely because he needn’t fear others “stealing” his system. How could they or would they copycat what runs counter to conventional wisdom? Not only is it pointless to patent truly good ideas, Spitznagel’s book reminds us that it’s a waste of time. What’s really good can’t easily be mimicked, and Universa is quite good. According to the author, Universa’s “risk-mitigated portfolios have over their decade-plus life to date, outperformed the S&P 500 by over 3% on an annualized, net basis.” Try as they wanted to, Michael Jordan’s peers couldn’t be him, neither could Steve Jobs’s, nor it seems could those aiming to be Mark Spitznagel.
The previous paragraph is a long way of saying what Spitznagel is up front about: Safe Haven is not a “how to” book. Instead it’s a “why-to” book, or better yet a “why-not-to” book. He has no illusions about teaching you to be a genius, nor does he have any “interest in selling you anything as an investment manager.” Your reviewer’s view of the why behind Spitznagel’s excellent book is that he wrote it to better understand his own capacious mind.
After which, Spitznagel is way too honest with himself and you the reader to pretend that you can be him if you read him. It’s the equivalent of reading Phil Knight’s endlessly excellent Shoe Dog on the assumption that doing so will make you a capable entrepreneur a la the Nike co-founder. Lots of luck there. Knight is sui generis. So is Spitznagel. He can talk about his craft without fear of being eclipsed with the information he provides. Entrepreneurialism cannot be taught. Neither can investment acumen.
What’s challenging about Spitznagel’s confident belief in hims
Article from Mises Wire