The Diff makes two broad claims about the world, with details around the implications:
First, we live at a time of important inflection points, and many of those inflections are caused by technological change and expressed in financial markets. Understanding how new technologies are being deployed, and how they’re changing the way we live, is a big task. And one thing that makes it challenging is the power law distribution of technologies’ impacts—plenty of new inventions were produced in the late nineteenth century, but just a handful of them defined the Industrial Revolution, which was the biggest change in the way humans lived since the beginning of agriculture. So it’s wise to have a diversified portfolio of trends to track.
Second, the behavior of businesses and markets is more informative if you assume that the people involved are making fairly good decisions with lots of information and analysis that you don’t have access to; trying to figure out the best reason a given choice might be a good idea is more useful than enumerating all the obvious reasons it’s a bad one. Over the last two decades, lots of smart and ambitious people have moved into the worlds of tech and finance, and even if their decisions aren’t always the best, they’re often wrong in informative ways. Since it’s always easy to make the case that a given Series A was done at an inflated valuation, that a dramatic product change was a mistaken one, that a merger was non-strategic empire-building, etc., it’s not especially informative to make this case at length. Whereas it is interesting to say: given the obvious reasons this might be a mistake, what are the not-so-obvious reasons it might be very clever?
One way to sum this up is to say that this newsletter is a learning process, and a constant effort to catch up to smarter people. It’s necessarily a generalist publication—we might cover an LNG company one week, the car supply chain the next, and a new kind of derivative the week after that—because the impact of different changes is so uncertain. But that power law distribution means that a diversified portfolio of interesting ideas is an optimal one: it’s more likely to contain one or two big hits that more than make up for the disappointments.