AI Uncertainty Prompts Fish-Brained Investing in Murky Economic Waters

Neuroscientist Malcolm MacIver’s study of electric fish provides insights into how humans and other animals think and plan. Electric fish, which inhabit murky waters, have evolved to think only a few milliseconds into the future due to their limited visibility. This reflexive thinking is optimized for speed and devoid of planning, as deliberation is not a survival advantage in their environment.

In contrast, land-based fish evolved better eyesight and the ability to think ahead, as seeing through air is easier and more useful than seeing through water. This expanded vision created a selective advantage for planning and abstract cognition. MacIver argues that moving onto land accelerated the evolution of the brain, particularly the ability to envision the future. Humans, being land-based animals, are the best at envisioning the future, but our brains still retain primitive, reflexive responses from our aquatic ancestors.

These reflexive responses can be both advantageous and disadvantageous. They protect us from immediate dangers but can also lead to impulsive reactions and a lack of long-term planning. In murky environments where the future is unclear, the aquatic part of our brains may be more useful, as it allows for quick, instinctual responses.

In the current economic climate, the future is uncertain, and long-term planning may be futile. Jeff Bezos, a long-term thinker, once cautioned against planning more than twenty minutes ahead during the dotcom boom, as the internet was evolving too rapidly. Now, with the advance of AI, the future seems even murkier.

AI is expected to disrupt many businesses in the coming years, but it is unclear which ones will be affected. Some companies, like Microsoft, could be huge winners or losers depending on how AI evolves. The world’s largest registered investment advisor, Ric Edelman, recommends owning fewer equities and more crypto, but his recommendations require a clear view of the future.

Edelman recommends bitcoin and Ethereum, which are resistant to change and evolve in meticulously thought-out plans, respectively. However, he does not recommend Solana, which aims to iterate quickly. This approach has been advantageous in the current environment, but it could change in the future.

Jeff Bezos’ approach to planning for the future is to focus on things that are certain to persist, such as customers’ desire for lower prices and faster delivery. In the current environment, fish-brained investors and builders should focus on the things directly in front of them and which of those are unlikely to change.