Information Density, Insight, and Alpha

Tuesday, September 19th, 2023

Information is plentiful, and likely will just increase.

The appetite for consumption, however, has to be finite. It is governed largely by the amount of time we spend.

If it's fixed by time, say, during our walks or drives, and the quantity of available sources is increasing, what are our options?

For a long while, it didn't matter: most people would gravitate to the biggest, most popular, sources; power laws kicked in. That information could potentially still be a source of alpha because not everybody was doing that, even then, and then there's taking action and actually doing something with it.

For most people, for so long, information couldn't be used for much of anything.

But now that has changed.

The information you take in can be the inputs into your economic outputs.

But if everyone is taking in the same body of information, largely, then the alpha comes primarily from you. As it should.

This is why I spend time thinking and writing about the your Point of View (How your POV drives product and market). It's a lens that can take a corpus of knowledge and turn it into something potentially marketable as a form of personal alchemy.

However...most people don't have crisp POV's, and even with one, the effort to find alpha and really fine-tune your ideas, still depends on inputs. Yes, you can amp up your own creativity, and you should, by practicing the way you munge new ideas from the old.

But as in baking, your skill can only take you so far; if you can take a dish to an entirely new genre by adding eggs but you don't even know about their existence, you'll be largely stuck.

I've been thinking about the idea of Compaction, dramatically increasing signal to noise ratios and information density within your existing time constraints. Nothing new. Book summaries abound and Twitter is in some ways the same thing. But for me, the sources of alpha include podcasts and substacks, and I just don't have the time to dive into those.

So I'm working to solve this problem.