the stock price thing at least seems like Goodhart's law. Stock price is supposed to be a measure of investors' confidence in whether a company will make money, because (common, non-voting) stock is nothing more than entitlement to a share of the profits. How much will you pay me today for a tiny slice of the pie periodically over the lifetime of the company? The problem w this is twofold:
1) You can sell stock after you buy it, which isn't itself a problem but introduces a confounding variable. Now stock price is a reflection partly of investors' confidence that the company will make money, and partly of investors' confidence that the stock price will go up. These two obviously feed back into one another: if a company announces things that make it seem profitable the stock price will go up, which can drive another round of investing beyond what the announcement warrants just hoping that they can ride the wave upward and get off at the peak. I personally did this with dogecoin when it went on its bull run a few years back. Despite my wholehearted belief that DOGE was basically worthless, I saw the price going up so I threw some money at it with the intention of bailing as soon as I saw any substantial growth. I tripled my money in three days and greater fool'd my way out of that position.
2) The tail starts to wag the dog. The perceived health of the company should make stock prices go up, but the stock price going up ends up influencing the perceived health of the company. What other measure do we have? The answer of course is "several, but none as easily summarized and delivered as a single number that has either increased or decreased since yesterday".
wilkommen · 26m ago
Another related truth is:
3) The stock of most companies actually doesn't entitle you to a share of the profits, because they either don't pay a dividend (very common), or if they do pay a dividend, the size of the dividend that the stock pays has no fixed relationship with the profitability of the company.
So if the stock doesn't entitle you to a meaningful voice in the company's affairs (which common stock doesn't), and it also doesn't entitle you to a share of the profits, then from the perspective of the stockholder, there is no way to calculate its value on fundamentals alone, because there are no fundamentals! Common stock is a digital piece of paper no more intrinsically valuable than a rare baseball card. So in the current environment, with stocks being what they are, the value of all stocks are calculated based solely on people's expectations of what others will pay for them.
lotsofpulp · 1h ago
3) company publishes their 10-Q and 10-K with terrible results and the gamblers try to rush out as they watch themselves be the greater fools.
Trustworthy, transparent financials mitigate the above 2 “problems”. Trustworthy and transparent being key requirements, which can only be satisfied if with a trustworthy and transparent auditor (i.e. government).
Edit: Also, the author's quote here
>This is what Deming meant when he said “nobody gives a hoot about profits”.
does not make sense to me, considering the large gains (to the tune of trillions of dollars) are to the shareholders that own shares in businesses with enormous profits. Obviously, someone (everyone?) gives a hoot about profits. Those obviously translate directly to money in one's pocket, especially those of managers and executives getting paid in equity.
ratelimitsteve · 42m ago
edit: sorry about that, I thought I couldn't reply for a bit.
What he means when he says "nobody gives a hoot about profits" is that "They only care about...personal success", in a system where stock price is seen as a measure of corporate health and success but itself can be driven by things other than good corporate health. One can achieve personal success by guiding the company effectively and making it healthy, but that's not the only way. Another way is by hopping on the AI train, because that's what's hype right now. That will communicate to investors that you're well-positioned to take advantage of the latest and greatest thing, regardless of whether you actually are.
To turn it into a metaphor because I just had my second espresso of the day and that's what I feel like doing, imagine a chef you pay on a per-meal basis, but you have to pay him during the cooking process. For argument's sake lets say the meal takes 6 months to deliver, and the chef himself has to eat food and sleep indoors in the meantime. You only want to pay for a quality meal, and the final judgment in quality can't take place until the meal is fully complete and served. So you look for lead indicators, and you happen upon two: smell, and whether the chef is using the latest and greatest techniques. These two things are pretty strongly correlated with good, high quality meals and for the most part people who pay for good smells and good techniques end up getting good meals. But I, as the chef, can exploit this gap between what you want and what you look for. Imagine castoreum is the latest and greatest technique, beaver anal gland extract. I can deliver a meal that smells great, uses castoreum and tastes amazing, or I can spend your money for six months then deliver boiled beaver buttholes in scented paraffin wax. The meal is a product, I'm the CEO, and the boiled beaver buttholes is AI. I can exploit the market's expectation that this tech will make everything better by shoehorning it in places it won't fit or half-assedly delivering a product whose primary source of anticipated value is just the fact that it uses AI, and by the time people realize that it hasn't actually delivered the promised product I've collected salary for 6 months and now I get to write myself a golden parachute check on the way out the door. Thus, the company's profits are completely divorced from my own profits as CEO, I hit all the KPIs, did exactly what investors asked me to do, the stock price went through the roof and we've created nothing at all of intrinsic or exchange value.
jackero · 2h ago
Maximizing productivity comes from maximizing efficiency. Efficiency is about sitting down and analyzing your tasks holistically and doing min-maxing to ensure every process achieves its greatest result.
Now ask yourself this: how often do people do this at all? Pretty much never. Most of us only do it when you have to, because you aren’t making enough money, because your application is slow, because you can barely meet budget, or because you are trying to land on the moon and failing costs too much.
jgeada · 1h ago
The other hard lesson learned during the Covid shutdowns (actually, it is learned and promptly forgotten at every major crisis):
maximizing efficiency also maximizes the number of single points of failure in your system. Anything that goes wrong breaks an optimized for efficiency system.
You need to have resilience and redundancy to deal with variability, but those cost money.
Much better from the management perspective to ignore those risks, cash in on the cheap profits and blame "unexpected events" and get a bailout when things go wrong. They cash in on the easy money and have no downside consequences.
TheOtherHobbes · 1m ago
The article actually says this.
I'm wondering how many people read it to the bottom? It makes the case that productivity analysis tools already exist, maximally productive systems have some slack in them and 100% efficiency isn't just impossible, it's counterproductive (for the reason you state).
But the problem with AI is that it adds a random element which makes any kind of modelling much harder. Sometimes you get good results fasts, sometimes it wastes a lot of time and holds up the project.
You never know what you're going to get. So any kind of project planning becomes even harder.
But that's not even the main point. The subtext - which isn't stated - is that the C-suite has persuaded itself that AI is a system that is more controllable and predictable than human employees.
When in fact - as anyone working at the coal face knows - it's the opposite.
And that's a problem, for all kinds of reasons. The obvious ones, like the loss of expertise through career progression, have already been talked about.
The less obvious one being discussed here is that the more AI is used, the less predictable all kinds of projects become - both in time and quality.
And if the economy is now being designed on the assumption the opposite is true, that's not going to end well.
In previous phases of industrial revolution consistency was the bedrock benefit.
Trying to create a revolution out of inconsistency is a very risky click.
hinkley · 4m ago
Queuing theory. You can only fill a pipeline around 60% full before you start seeing measurable delays, and 80% is where the wheels begin to come off. The line goes very vertical shortly after 80%.
danaris · 1h ago
> You need to have resilience and redundancy to deal with variability, but those cost money.
Reiterating for truth, and also to expand upon the point:
These are things that cost money all the time, but only pay off visibly in a crisis. And it has to be a crisis of the right kind (if your headquarters burns down in a wildfire, it won't help you to have 225% coverage on every role). So this makes it very difficult to justify to people who think only numbers—and only specific kinds of numbers—matter.
But redundancy and resiliency, at least in most cases, also make the lives of everyone working there better. They mean, among other things, that if one person needs to get surgery, or take their child to the doctor, or just go on vacation, there's still enough people there to keep the work flowing smoothly. The people still there won't be hopelessly overloaded, the work will get done, and the one person who's out won't have a mountain of catch-up work to go when they get back.
The only drawback is that it means you're paying people to work at a rate that means they regularly have downtime and aren't "fully utilized" constantly. (By definition.)
toast0 · 36m ago
> The only drawback
You also spend a lot more time on communication. If you have one person who is the resource for X, they can spend their time doing X and don't have to spend time on coordination. When the procedures for doing X change, only one person needs to figure it out, etc.
That doesn't mean having a single person is the right decision, the benefits of having multiple people are important; just want to be clear about the drawbacks of multiple people doing the work.
danaris · 4m ago
...But, on the flip side, that extra communication, and especially making sure that procedures are documented somewhere so that everyone can reference it, rather than just having it all live in one person's head, are vital for institutional stability and continuity.
boothby · 2h ago
> Efficiency is about sitting down and analyzing your tasks holistically and doing min-maxing...
Accurate analysis depends on accurate data. Which is why some people I know are required to account for their work activities in 7-minute increments, have frequent and detailed meetings to account for progress, project planning, etc.
Actually, doing that analysis has a cost that must be discounted from any perceived gains of efficiency, to be truly efficient. One learns to tolerate some waste to avoid the ultimate time-suck.
To say nothing of maintence and sustainability -- if you're always sprinting, you're doomed to fall.
Sevii · 1h ago
For factory optimization they didn't ask people to track their hours at 7 minute intervals. They put a camera on them and analyzed what they did over an entire shift. Then they redesign the factory line to optimize things. Having people manually track time has far more overhead and is less accurate in general. In practice I've never seen a software org take estimates or time tracking seriously beyond "Track your hours in 15 min increments against tickets".
hinkley · 20m ago
I will have this written on my gravestone if Edward Tufte doesn’t beat me to it:
Charts are for asking questions, not answering them.
That analysis phase can be done brilliantly, or disastrously. It’s down to whose hand is on the rudder.
7952 · 30m ago
7.5 would be nicer as it fits into sixty minutes!
hinkley · 22m ago
Boeing does 6 minutes, which means that it’s impossible to have a 45 minute meeting. My coworkers decided that if the meeting went over its .8 hours and if we cleared out on time or earlier that it’s .7 hours.
I don’t know why you would do 7. That doesn’t divide into 60 at all. Nor 480.
hinkley · 24m ago
Maximizing efficiency is how smaller companies eat your lunch. They maximize effectiveness instead. But that’s hard to measure except in customer satisfaction and market share. So it takes a lot of storytelling to get that far, and it can be broken quickly by the wrong execs being hired or the right ones leaving.
There’s a reason “bean counter” is an epithet.
saulpw · 55m ago
I disagree with the toplevel statement. In high-school science terms, productivity is like accuracy whereas efficiency is like precision. You can be very "productive" at a high-level without being efficient. Similarly you can be quite efficient at your tasks while not managing to achieve the toplevel goal.
You may argue that "analyzing your tasks holistically" will make you more efficient at achieving your goals. But min-maxing is for tactics, and is antithetical to strategy. Very often, taking a nap or a bath or walk will yield an insight that changes the entire game, obviating weeks or months of efficient and diligent work. We've all experienced this, so why do we insist on "maximizing efficiency"?
marcosdumay · 21m ago
The article is about several very widely known effects that don't require holistically analyzing anything nor come close to maximizing anything.
MaKey · 1h ago
> Now ask yourself this: how often do people do this at all? Pretty much never. Most of us only do it when you have to, because you aren’t making enough money, because your application is slow, because you can barely meet budget, or because you are trying to land on the moon and failing costs too much.
I do it most of the time at work because I find joy in finding the best possible solution.
moc_was_wronged · 2h ago
Large language models have their place, but they’re quite limited and no real substitute for human intelligence or judgement at its best.
That said, abusive corporate environments (and they’re pretty much all abusive) turn people into automatons. Execs can thus wave LLMs around and say, “Look, you’re so useless a machine can do your job.”
And even then it does a shitty job. It misses special cases and causes messes. But it’s cheap in the short term, which is all that matters to the boss’s career. Things will go to shit in a few years, but if you’re good at executive social climbing, you are three promotions away from your bad decisions by the time anyone figures out that’s what they were.
jdefr89 · 1h ago
It's ironic because the executive aspects of the job are easily the ones almost anyone can do. I say that as someone who has created and sold startup with a couple friends. We had to take on the role of both engineers and executives. Guess which one was far far easier and which one actually mattered?
nine_k · 36m ago
> which one was far far easier and which one actually mattered?
Let me guess: the engineering was easier and more pleasant, and what mattered was sales?
kenjackson · 2h ago
They do care about those things. But it turns out that stock price and profits often turn on “bigger” things than productivity. Google didn’t win search because they were productive. Nor did Tesla win EVs due to it (and they won’t lose EVs due to the lack of it).
There are some spaces where productivity does matter. My uncle runs a painting company. It’s all about productivity, costs, and customer acquisition. HeAl’s not waiting on new markets or innovation to fundamentally change how he makes money (although tech has improved productivity). He’s made it for the same way for the past 30 years.
lapcat · 2h ago
> They do care about those things.
The article author argues that companies enforce policies that are manifestly unproductive. Do you have a counterargument, or evidence that they do care?
zdragnar · 2h ago
The article incorrectly conflates "cares about productivity" with "cares exclusively about productivity".
SWE salaries are a massive cost. Improving productivity is one way of offsetting that cost. The examples provided for "don't care about productivity" are things like open office plans- where a certain amount of productivity is sacrificed while offsetting a different cost (building space).
Yes, it is fair to say that managers and executives do not care about productivity to the exclusion of all else. It's something of a pointless statement, though, as I don't think anyone actually thinks that.
NickM · 1m ago
SWE salaries are a massive cost. Improving productivity is one way of offsetting that cost.
In a lot of businesses you get praise and look important if you’re responsible for leading a large group of highly paid employees, more so then if you have a smaller team.
Thus the motivation is frequently to spend as much money as possible, not to improve efficiency.
If you improve efficiency then maybe you just get your team size cut and people ask hard questions about why you needed all those resources in the first place.
lapcat · 1h ago
> The article incorrectly conflates "cares about productivity" with "cares exclusively about productivity".
No, I don't believe it does. The argument is actually that they "care about control over labour and stock prices" above all else, including productivity.
> The examples provided for "don't care about productivity" are things like open office plans- where a certain amount of productivity is sacrificed while offsetting a different cost (building space).
From the article: "Home offices also lower office real estate costs, so you’d think executives would love it, but they also makes employee surveillance harder."
whatshisface · 2h ago
If there's an action that would lower the price per share by 10% but raise an individual's stock based compensation by 12%, every executive in the world would take it.
SoftTalker · 2h ago
Google and Tesla both won by being vastly better than the competition. After they won, perhaps their motiviations changed.
snapcaster · 2h ago
But they didn't win by being marginally more productive than competitors
marcosdumay · 17m ago
Let's not pretend that the productivity gains from the stuff on the article are marginal.
FirmwareBurner · 1h ago
Tesla was iterating and innovating way faster on the SW and HW front with less R&D resources, than the stablished German or Japanese players. By that metric, they were significantly more productive.
Stock market is a gambling game that has little to do with actual productivity, it's about convincing other fools to pay more for the stock than you did so that you can make a profit and leave them holding the bag.
tptacek · 2h ago
The author has twisted themselves into a weird pretzel trying to tie a broad societal critique about short-termism to day-to-day line management. Your manager almost certainly does care about your productivity; in fact, the more biting critique is probably that they care too much about it, working to juice output in the short term while paying short shrift to downstream consequences.
lapcat · 1h ago
> Your manager almost certainly does care about your productivity
Your middle manager likely cares less about your productivity than about sucking up to those above your middle manager in the hierarchy, and your productivity is at best only tenuously related to that.
In fact your middle manager is responsible for enforcing the C-suite's directives on you. Any deviation from that, even if it increases your productivity, is likely to result in punishment rather than reward for your manager.
serial_dev · 3m ago
> your middle manager is responsible for enforcing the C-suite's directives on you
So true, our company monitors PR counts, it’s all pushed from higher level execs. So my manager, the middle manager, tells us, “make sure your PR counts do not stand out negatively” and pretty much independently of this, make sure you deliver value. We need to keep the PR count up, so that execs see charts going up, and need to work on things that matter so that they don’t realize those are BS metrics to enforce. The thing is measuring what matters is not trivial for software engineering, so they measure what’s easy to measure, and they can pat themselves on the back for being data driven.
add-sub-mul-div · 2h ago
Sounds like the same argument. They don't care about true productivity, they want the appearance of it, the illusory short term gains of AI.
knallfrosch · 1h ago
A genie offers you either: You're 50% more productive, or you appear 50% more productive. What would _you_ choose?
beng-nl · 1h ago
I don’t see the dilemma - if you want to appear 50% more productive, why not actually be 50% more productive too?
Or do you mean being more productive doesn’t automatically translate to it being visible.. yeah that is a tricky one..
fcatalan · 40m ago
That guy that doesn't even show up might be just playing videogames... Or maybe taking credit for your work over a coffee with the boss of your boss
throwaway1004 · 1h ago
I would frame this slightly differently: managers care about delivery above all else, not necessarily productivity or efficiency.
Their goal is to attach their name to as many features/initatives as possible, owning the successes and orphaning failures, to impress their bosses. Another related goal is to have as many reports as possible. Delivery is relative to the average velocity: often, it's preferable to have a slow, inefficient operation so you can sandbag your bosses AND increase your headcount.
When it comes to improving processes and tools, managers prefer low-risk, iterative improvements which they can (somewhat) grasp. They also enjoy one-off prototypes and half-baked hacker projects which use new and shiny technology. Both categories make great fodder for PowerPoint presentations in front of shirts.
When it comes to larger, fundamental shifts which they cannot grok nor plausibly attach their name to, many managers will actively impede such efforts, as this risks upsetting the status quo which is (probably) working for them. The exceptions are usually the smart middle-managers looking to create a rising tide.
I've worked at a company that had dozens upon dozens of teams working on precisely the same problems (standard build->deploy->test->release fare), using many of the same tools, each with their own half-baked and poorly maintained configuration, plugins, dependencies, and custom libraries (sometimes, they even wrote a few tests!).
You can probably guess the majority of the proposal I put together, it's foundational stuff. It was presented and discussed among our senior+ engineers, and with managers.
>"You know... maybe there's value in letting teams be innovative..."
heisenbit · 1h ago
> managers care about delivery above all else
More precisely about benefit derived from the delivery. Best case scenario is the team is part of the benefit thinking but that is not a given. Also the layer above may engineer a situation where team and manager benefits from delivery are in conflict.
didibus · 1h ago
A bit tangential, but I've wondered with AI where is the growth?
If you want to move up the stock, cost cutting is good, to some extent, but it has limits, competition can become more fierce, and the whole thing can become a race to the bottom, you cut cost, than you're forced to cut margins, and now you are no less profitable.
Growth requires new products, new markets, for people to spend additional money, to acquire more customers, etc.
A few companies are growing because their product is AI, so that's going to be new money coming in from people who want AI in itself.
But for those using AI?
marcosdumay · 24m ago
The one coherent theory I've heard is that the growth will come from all the new tasks done by the new software that we will have due to the severely increased programmer productivity.
Except that software has a very iffy history of contributing to overall productivity, the impact isn't severe by any measure (and negative by a few), and on the level of investment happening now we would need to increase the (already huge) size of "software" on our economy several times.
taeric · 1h ago
The pretense here is that we actually know what leads to long term progress? As much as it pains people to admit it, short term results are often far more predictive of long term results than any other single data point.
Is it perfect? No. Of course not. But having a team that is just willing to show up and work towards a goal is such a leg up over any other thing that we know that it is painful to see it argued against.
Will there be some people that make progress in leaps? Absolutely. Most of that progress will be taken up and incorporated rather quickly in the places that also employ the teams that just show up.
NickM · 5m ago
The trouble is that making progress in leaps is often mutually exclusive with being productive in the short term. It’s hard to think big and plan long-term when you’re constantly overwhelmed with what’s in front of you.
Slow Productivity by Cal Newport talks about this trade-off extensively and provides interesting points of reference where real famous historical figures achieved incredible things in ways that would seem slow and lazy by modern standards.
Buttons840 · 1h ago
This, again, makes me question what meaning individual workers should find in work.
Ideally (level 3, the best), I could work with good people on something that I personally care about, like curing childhood cancer or something. This is the type of work I would do even if I wasn't paid, although I couldn't do as much without pay. The meaning is obvious.
This type of job is rare though, so I can't reliably expect to find this level of meaning in work.
But maybe (level 2), I can work with good people towards making a company profitable. Helping an honest company be profitable for the mutual benefit of all the good people I work with is meaning enough for me.
But companies often ask individual workers to do stupid things, or a company is not open to hearing ideas about how to be more successful from individual workers. So I can't reliably take personal meaning from making the company profitable, because the company isn't interested in hearing my ideas about the business, and/or is acting is self-destructive ways, and/or the companies profits are completely disconnect from anything I personally do.
But maybe (level 1), I can find meaning in making my boss happy. This is hell, this is a pathetic meaning for work, but making the boss happy is at least something.
But often my bosses are not good people (about 50%). I've seen what makes them happy and I don't want to be that.
So, (level 0) I guess the only meaning I have left is to make money. If this is really the meaning behind my work, then I see no reason to not cheat and lie at every opportunity, while being careful to avoid consequences. If earning money really is the deepest meaning I should seek in work, then lying and cheating will help me with this--let's go full psychopath mode!
On HN people often say that level 2 is the right attitude, but companies do things that are self-destructive, so I cannot maintain level 2. Level 1 and level 0 are stages of hell.
What meaning do you find in work? What level are you?
HPsquared · 1h ago
Then there are levels of meaning in "making money". Are you feeding the family, or paying student loans for a course you didn't use? Etc etc
burnte · 2h ago
Good ones really do and they work hard to enhance the productivity of their workers. I always say to my people that my job is to make their jobs easier, and to a large degree that's true.
There are other types who prefer the power trip, or that if you're a bad manager then your job is pretty easy, etc. But GOOD execs actually do care quite a lot. I tend to tangle with HR over salaries because I'd rather hire a handful of really good people for 15% above market and get double the productivity than a lot of people at or below market.
This article is confusing the corporate raider mindset rampant in big public companies with the genuine growth mindset most companies actually have. Everyone focuses on productivity and costs, enshittification only happens when you're near enough of a monopoly you can afford to squeeze your customers. Most companies can't do that and most companies try to just keep improving. Don't look at MS or Exxon and think that's who most companies actually work. That's just the beginning of the end stage of a megacorporation's life.
jdefr89 · 1h ago
Unfortunately It seems most companies only purport to have "growth mindset" In my experience, at least now, the author nails the issue right on the head. You have executives with a dogma that ultimately means controlling others... I see little proof the opposite is true.
fatbird · 2h ago
As I keep mentioning, I worked as a contractor inside Honeywell for 5+ years. My experience of my immediate team was mixed: some very good people, some total morons. My experience of the organization was uniformly terrible. Absurd company-wide requirements for security checks, code quality verification, financial controls. Insane restrictions on product development to use X technology or integrate with Y unit's product. Billions wasted on their IIoT play that got rebooted after several years (and the billions I saw wasted wasn't its development, it was moving everyone in the company onto and off it again ["offboarding"]).
In that time, the stock price went up, and Honeywell went back on the Fortune 100. Just zero relationship between productivity or effectiveness within the company and the stock price.
whatshisface · 2h ago
>Just zero relationship between productivity or effectiveness within the company and the stock price.
Losing billions of dollars doesn't keep you off the Fortune 100, only losing billions of dollars more than the other companies people could invest in.
lotsofpulp · 58m ago
Nominal stock price going up does not mean anything (nor does Fortune 100), it could just be a function of the decreasing purchasing power of the currency.
5/10/15/20 year annual Honeywell returns are 9.74/10.29/14.03/11.78%.
SP500 is 14.69/13.80/14.42/10.57%.
I would characterize Honeywell as treading water until 2011, and since then they have been losing.
> There’s obviously a financial bubble in full force.
If it’s so obvious, figure out how to bet against it, get rich, and never have to worry about productivity again.
> The environmental impact is real.
If every LLM disappeared tomorrow, the environment is still equally fucked as it is today. “Think of the environment” is the second most mindless appeal to emotion argument against anything other than “Think of the children.”
jdefr89 · 1h ago
It's cute when people think they can all exploit the current market and "get rich" when in reality they almost always just help the same people who are already rich, get richer. I say that as someone who has himself, started and sold a startup with a couple friend... The reality is I got SUPER LUCKY. The chances of any individual "making it" in the system that currently exists are minuscule to none. You might be better off playing the lottery and hoping to hit big. The chances of either are ridiculously low. The author didn't say how to solve the bubble crisis we are watching. Usually they aren't things you can solve. He simply acknowledged a huge one is forming and he isn't wrong.
TheAmazingRace · 1h ago
This is exceptionally true. I'd love to get rich like anyone else, but my odds of landing that perfect trade are extremely remote. I prefer VTSAX and letting it ride for years, if not decades. Time in the market is going to be far more consistently good in the long run rather than trying to win on a lucky stock pick... or lucky lottery numbers for that matter.
paulcole · 39m ago
Who is thinking that?
I think that the person who wrote this blog post is supremely deluded about their ability to identify a bubble.
Buttons840 · 1h ago
Someone who is extremely skilled at trading stocks, and consistently out-performs the market, while having access to a median amount of money, is going to earn like $10 an hour.
Most people don't have access to enough money to begin profitable trading. Most people don't have a realistic option to even try trading.
paulcole · 9m ago
I would think that someone who is absolutely sure we are in the middle of a massive bubble would do everything in their power to bet as much as possible against it.
Because they are absolutely sure that we are in the middle of a massive bubble, they surely can’t lose, right?
jgeada · 1h ago
"The market can remain irrational longer than you can stay solvent" -- John Maynard Keynes
TheAmazingRace · 1h ago
It's why I just invest in indexes and not sweat it. Yeah, I won't make big bucks like some day traders do if they get lucky (like one guy I saw make $50k on an option contract for RDDT with just a few grand of starting capital), but that's just too nerve-wracking for me.
paulcole · 8m ago
“Yawn.” -- Me
wheelerwj · 15m ago
I have a better idea, let’s stop pretending that someone is an expert just because they bought a domain name.
This post is full of non-sequitur assumptions, conjecture, and almost every logical fallacy.
1) You can sell stock after you buy it, which isn't itself a problem but introduces a confounding variable. Now stock price is a reflection partly of investors' confidence that the company will make money, and partly of investors' confidence that the stock price will go up. These two obviously feed back into one another: if a company announces things that make it seem profitable the stock price will go up, which can drive another round of investing beyond what the announcement warrants just hoping that they can ride the wave upward and get off at the peak. I personally did this with dogecoin when it went on its bull run a few years back. Despite my wholehearted belief that DOGE was basically worthless, I saw the price going up so I threw some money at it with the intention of bailing as soon as I saw any substantial growth. I tripled my money in three days and greater fool'd my way out of that position.
2) The tail starts to wag the dog. The perceived health of the company should make stock prices go up, but the stock price going up ends up influencing the perceived health of the company. What other measure do we have? The answer of course is "several, but none as easily summarized and delivered as a single number that has either increased or decreased since yesterday".
3) The stock of most companies actually doesn't entitle you to a share of the profits, because they either don't pay a dividend (very common), or if they do pay a dividend, the size of the dividend that the stock pays has no fixed relationship with the profitability of the company.
So if the stock doesn't entitle you to a meaningful voice in the company's affairs (which common stock doesn't), and it also doesn't entitle you to a share of the profits, then from the perspective of the stockholder, there is no way to calculate its value on fundamentals alone, because there are no fundamentals! Common stock is a digital piece of paper no more intrinsically valuable than a rare baseball card. So in the current environment, with stocks being what they are, the value of all stocks are calculated based solely on people's expectations of what others will pay for them.
Trustworthy, transparent financials mitigate the above 2 “problems”. Trustworthy and transparent being key requirements, which can only be satisfied if with a trustworthy and transparent auditor (i.e. government).
Edit: Also, the author's quote here
>This is what Deming meant when he said “nobody gives a hoot about profits”.
does not make sense to me, considering the large gains (to the tune of trillions of dollars) are to the shareholders that own shares in businesses with enormous profits. Obviously, someone (everyone?) gives a hoot about profits. Those obviously translate directly to money in one's pocket, especially those of managers and executives getting paid in equity.
What he means when he says "nobody gives a hoot about profits" is that "They only care about...personal success", in a system where stock price is seen as a measure of corporate health and success but itself can be driven by things other than good corporate health. One can achieve personal success by guiding the company effectively and making it healthy, but that's not the only way. Another way is by hopping on the AI train, because that's what's hype right now. That will communicate to investors that you're well-positioned to take advantage of the latest and greatest thing, regardless of whether you actually are.
To turn it into a metaphor because I just had my second espresso of the day and that's what I feel like doing, imagine a chef you pay on a per-meal basis, but you have to pay him during the cooking process. For argument's sake lets say the meal takes 6 months to deliver, and the chef himself has to eat food and sleep indoors in the meantime. You only want to pay for a quality meal, and the final judgment in quality can't take place until the meal is fully complete and served. So you look for lead indicators, and you happen upon two: smell, and whether the chef is using the latest and greatest techniques. These two things are pretty strongly correlated with good, high quality meals and for the most part people who pay for good smells and good techniques end up getting good meals. But I, as the chef, can exploit this gap between what you want and what you look for. Imagine castoreum is the latest and greatest technique, beaver anal gland extract. I can deliver a meal that smells great, uses castoreum and tastes amazing, or I can spend your money for six months then deliver boiled beaver buttholes in scented paraffin wax. The meal is a product, I'm the CEO, and the boiled beaver buttholes is AI. I can exploit the market's expectation that this tech will make everything better by shoehorning it in places it won't fit or half-assedly delivering a product whose primary source of anticipated value is just the fact that it uses AI, and by the time people realize that it hasn't actually delivered the promised product I've collected salary for 6 months and now I get to write myself a golden parachute check on the way out the door. Thus, the company's profits are completely divorced from my own profits as CEO, I hit all the KPIs, did exactly what investors asked me to do, the stock price went through the roof and we've created nothing at all of intrinsic or exchange value.
Now ask yourself this: how often do people do this at all? Pretty much never. Most of us only do it when you have to, because you aren’t making enough money, because your application is slow, because you can barely meet budget, or because you are trying to land on the moon and failing costs too much.
maximizing efficiency also maximizes the number of single points of failure in your system. Anything that goes wrong breaks an optimized for efficiency system.
You need to have resilience and redundancy to deal with variability, but those cost money.
Much better from the management perspective to ignore those risks, cash in on the cheap profits and blame "unexpected events" and get a bailout when things go wrong. They cash in on the easy money and have no downside consequences.
I'm wondering how many people read it to the bottom? It makes the case that productivity analysis tools already exist, maximally productive systems have some slack in them and 100% efficiency isn't just impossible, it's counterproductive (for the reason you state).
But the problem with AI is that it adds a random element which makes any kind of modelling much harder. Sometimes you get good results fasts, sometimes it wastes a lot of time and holds up the project.
You never know what you're going to get. So any kind of project planning becomes even harder.
But that's not even the main point. The subtext - which isn't stated - is that the C-suite has persuaded itself that AI is a system that is more controllable and predictable than human employees.
When in fact - as anyone working at the coal face knows - it's the opposite.
And that's a problem, for all kinds of reasons. The obvious ones, like the loss of expertise through career progression, have already been talked about.
The less obvious one being discussed here is that the more AI is used, the less predictable all kinds of projects become - both in time and quality.
And if the economy is now being designed on the assumption the opposite is true, that's not going to end well.
In previous phases of industrial revolution consistency was the bedrock benefit.
Trying to create a revolution out of inconsistency is a very risky click.
Reiterating for truth, and also to expand upon the point:
These are things that cost money all the time, but only pay off visibly in a crisis. And it has to be a crisis of the right kind (if your headquarters burns down in a wildfire, it won't help you to have 225% coverage on every role). So this makes it very difficult to justify to people who think only numbers—and only specific kinds of numbers—matter.
But redundancy and resiliency, at least in most cases, also make the lives of everyone working there better. They mean, among other things, that if one person needs to get surgery, or take their child to the doctor, or just go on vacation, there's still enough people there to keep the work flowing smoothly. The people still there won't be hopelessly overloaded, the work will get done, and the one person who's out won't have a mountain of catch-up work to go when they get back.
The only drawback is that it means you're paying people to work at a rate that means they regularly have downtime and aren't "fully utilized" constantly. (By definition.)
You also spend a lot more time on communication. If you have one person who is the resource for X, they can spend their time doing X and don't have to spend time on coordination. When the procedures for doing X change, only one person needs to figure it out, etc.
That doesn't mean having a single person is the right decision, the benefits of having multiple people are important; just want to be clear about the drawbacks of multiple people doing the work.
Accurate analysis depends on accurate data. Which is why some people I know are required to account for their work activities in 7-minute increments, have frequent and detailed meetings to account for progress, project planning, etc.
Actually, doing that analysis has a cost that must be discounted from any perceived gains of efficiency, to be truly efficient. One learns to tolerate some waste to avoid the ultimate time-suck.
To say nothing of maintence and sustainability -- if you're always sprinting, you're doomed to fall.
Charts are for asking questions, not answering them.
That analysis phase can be done brilliantly, or disastrously. It’s down to whose hand is on the rudder.
I don’t know why you would do 7. That doesn’t divide into 60 at all. Nor 480.
There’s a reason “bean counter” is an epithet.
You may argue that "analyzing your tasks holistically" will make you more efficient at achieving your goals. But min-maxing is for tactics, and is antithetical to strategy. Very often, taking a nap or a bath or walk will yield an insight that changes the entire game, obviating weeks or months of efficient and diligent work. We've all experienced this, so why do we insist on "maximizing efficiency"?
I do it most of the time at work because I find joy in finding the best possible solution.
That said, abusive corporate environments (and they’re pretty much all abusive) turn people into automatons. Execs can thus wave LLMs around and say, “Look, you’re so useless a machine can do your job.”
And even then it does a shitty job. It misses special cases and causes messes. But it’s cheap in the short term, which is all that matters to the boss’s career. Things will go to shit in a few years, but if you’re good at executive social climbing, you are three promotions away from your bad decisions by the time anyone figures out that’s what they were.
Let me guess: the engineering was easier and more pleasant, and what mattered was sales?
There are some spaces where productivity does matter. My uncle runs a painting company. It’s all about productivity, costs, and customer acquisition. HeAl’s not waiting on new markets or innovation to fundamentally change how he makes money (although tech has improved productivity). He’s made it for the same way for the past 30 years.
The article author argues that companies enforce policies that are manifestly unproductive. Do you have a counterargument, or evidence that they do care?
SWE salaries are a massive cost. Improving productivity is one way of offsetting that cost. The examples provided for "don't care about productivity" are things like open office plans- where a certain amount of productivity is sacrificed while offsetting a different cost (building space).
Yes, it is fair to say that managers and executives do not care about productivity to the exclusion of all else. It's something of a pointless statement, though, as I don't think anyone actually thinks that.
In a lot of businesses you get praise and look important if you’re responsible for leading a large group of highly paid employees, more so then if you have a smaller team.
Thus the motivation is frequently to spend as much money as possible, not to improve efficiency.
If you improve efficiency then maybe you just get your team size cut and people ask hard questions about why you needed all those resources in the first place.
No, I don't believe it does. The argument is actually that they "care about control over labour and stock prices" above all else, including productivity.
> The examples provided for "don't care about productivity" are things like open office plans- where a certain amount of productivity is sacrificed while offsetting a different cost (building space).
From the article: "Home offices also lower office real estate costs, so you’d think executives would love it, but they also makes employee surveillance harder."
Stock market is a gambling game that has little to do with actual productivity, it's about convincing other fools to pay more for the stock than you did so that you can make a profit and leave them holding the bag.
Your middle manager likely cares less about your productivity than about sucking up to those above your middle manager in the hierarchy, and your productivity is at best only tenuously related to that.
In fact your middle manager is responsible for enforcing the C-suite's directives on you. Any deviation from that, even if it increases your productivity, is likely to result in punishment rather than reward for your manager.
So true, our company monitors PR counts, it’s all pushed from higher level execs. So my manager, the middle manager, tells us, “make sure your PR counts do not stand out negatively” and pretty much independently of this, make sure you deliver value. We need to keep the PR count up, so that execs see charts going up, and need to work on things that matter so that they don’t realize those are BS metrics to enforce. The thing is measuring what matters is not trivial for software engineering, so they measure what’s easy to measure, and they can pat themselves on the back for being data driven.
Or do you mean being more productive doesn’t automatically translate to it being visible.. yeah that is a tricky one..
Their goal is to attach their name to as many features/initatives as possible, owning the successes and orphaning failures, to impress their bosses. Another related goal is to have as many reports as possible. Delivery is relative to the average velocity: often, it's preferable to have a slow, inefficient operation so you can sandbag your bosses AND increase your headcount.
When it comes to improving processes and tools, managers prefer low-risk, iterative improvements which they can (somewhat) grasp. They also enjoy one-off prototypes and half-baked hacker projects which use new and shiny technology. Both categories make great fodder for PowerPoint presentations in front of shirts.
When it comes to larger, fundamental shifts which they cannot grok nor plausibly attach their name to, many managers will actively impede such efforts, as this risks upsetting the status quo which is (probably) working for them. The exceptions are usually the smart middle-managers looking to create a rising tide.
I've worked at a company that had dozens upon dozens of teams working on precisely the same problems (standard build->deploy->test->release fare), using many of the same tools, each with their own half-baked and poorly maintained configuration, plugins, dependencies, and custom libraries (sometimes, they even wrote a few tests!).
You can probably guess the majority of the proposal I put together, it's foundational stuff. It was presented and discussed among our senior+ engineers, and with managers.
>"You know... maybe there's value in letting teams be innovative..."
More precisely about benefit derived from the delivery. Best case scenario is the team is part of the benefit thinking but that is not a given. Also the layer above may engineer a situation where team and manager benefits from delivery are in conflict.
If you want to move up the stock, cost cutting is good, to some extent, but it has limits, competition can become more fierce, and the whole thing can become a race to the bottom, you cut cost, than you're forced to cut margins, and now you are no less profitable.
Growth requires new products, new markets, for people to spend additional money, to acquire more customers, etc.
A few companies are growing because their product is AI, so that's going to be new money coming in from people who want AI in itself.
But for those using AI?
Except that software has a very iffy history of contributing to overall productivity, the impact isn't severe by any measure (and negative by a few), and on the level of investment happening now we would need to increase the (already huge) size of "software" on our economy several times.
Is it perfect? No. Of course not. But having a team that is just willing to show up and work towards a goal is such a leg up over any other thing that we know that it is painful to see it argued against.
Will there be some people that make progress in leaps? Absolutely. Most of that progress will be taken up and incorporated rather quickly in the places that also employ the teams that just show up.
Slow Productivity by Cal Newport talks about this trade-off extensively and provides interesting points of reference where real famous historical figures achieved incredible things in ways that would seem slow and lazy by modern standards.
Ideally (level 3, the best), I could work with good people on something that I personally care about, like curing childhood cancer or something. This is the type of work I would do even if I wasn't paid, although I couldn't do as much without pay. The meaning is obvious.
This type of job is rare though, so I can't reliably expect to find this level of meaning in work.
But maybe (level 2), I can work with good people towards making a company profitable. Helping an honest company be profitable for the mutual benefit of all the good people I work with is meaning enough for me.
But companies often ask individual workers to do stupid things, or a company is not open to hearing ideas about how to be more successful from individual workers. So I can't reliably take personal meaning from making the company profitable, because the company isn't interested in hearing my ideas about the business, and/or is acting is self-destructive ways, and/or the companies profits are completely disconnect from anything I personally do.
But maybe (level 1), I can find meaning in making my boss happy. This is hell, this is a pathetic meaning for work, but making the boss happy is at least something.
But often my bosses are not good people (about 50%). I've seen what makes them happy and I don't want to be that.
So, (level 0) I guess the only meaning I have left is to make money. If this is really the meaning behind my work, then I see no reason to not cheat and lie at every opportunity, while being careful to avoid consequences. If earning money really is the deepest meaning I should seek in work, then lying and cheating will help me with this--let's go full psychopath mode!
On HN people often say that level 2 is the right attitude, but companies do things that are self-destructive, so I cannot maintain level 2. Level 1 and level 0 are stages of hell.
What meaning do you find in work? What level are you?
There are other types who prefer the power trip, or that if you're a bad manager then your job is pretty easy, etc. But GOOD execs actually do care quite a lot. I tend to tangle with HR over salaries because I'd rather hire a handful of really good people for 15% above market and get double the productivity than a lot of people at or below market.
This article is confusing the corporate raider mindset rampant in big public companies with the genuine growth mindset most companies actually have. Everyone focuses on productivity and costs, enshittification only happens when you're near enough of a monopoly you can afford to squeeze your customers. Most companies can't do that and most companies try to just keep improving. Don't look at MS or Exxon and think that's who most companies actually work. That's just the beginning of the end stage of a megacorporation's life.
In that time, the stock price went up, and Honeywell went back on the Fortune 100. Just zero relationship between productivity or effectiveness within the company and the stock price.
Losing billions of dollars doesn't keep you off the Fortune 100, only losing billions of dollars more than the other companies people could invest in.
5/10/15/20 year annual Honeywell returns are 9.74/10.29/14.03/11.78%.
SP500 is 14.69/13.80/14.42/10.57%.
I would characterize Honeywell as treading water until 2011, and since then they have been losing.
https://dqydj.com/stock-return-calculator/?ticker=HON
https://dqydj.com/sp-500-return-calculator/
If it’s so obvious, figure out how to bet against it, get rich, and never have to worry about productivity again.
> The environmental impact is real.
If every LLM disappeared tomorrow, the environment is still equally fucked as it is today. “Think of the environment” is the second most mindless appeal to emotion argument against anything other than “Think of the children.”
I think that the person who wrote this blog post is supremely deluded about their ability to identify a bubble.
Most people don't have access to enough money to begin profitable trading. Most people don't have a realistic option to even try trading.
Because they are absolutely sure that we are in the middle of a massive bubble, they surely can’t lose, right?
This post is full of non-sequitur assumptions, conjecture, and almost every logical fallacy.