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Liz Hecht, October 2025 |
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Goldman Sachs has called Nvidia “the most important stock on earth” and employee reviews on the website Glassdoor have ranked Nvidia the best place to work in the United States. From the IPO date of January 22, 1999 through mid-2024, Nvidia’s stock appreciated by more than 300,000 percent. And as a I write this, at $4.72 trillion Nvidia’s market cap has become bigger than the market cap of most stock markets in the world.1 From Zombified Cyborgs to Physics and Chemistry The Thinking Machine tells the story of how Nvidia “took a niche product for dorks and turned it into the dominant computing platform” of our time. The book describes in novelistic detail Nvidia’s evolution from a gaming company―creating more realistic zombified cyborgs made of dismembered body parts―to a company that has made possible the work of Nobel laureates in physics and chemistry.
Stephen Witt is a Los Angeles-based author, television producer and investigative journalist. His previous book, How Music Got Free, was published in 2015 and made into a television documentary.
Nvidia hasn’t always been a storied juggernaut of profits and stock price appreciation. In 2001-2002 and again in late 2006, the stock lost 90% of its value. During leaner times, institutional investors were skeptical and Nvidia became a target of the activist investor Starboard Value. In 2024, Elliott Management, one of the world’s largest hedge funds, wrote in a letter to clients that tech stocks, especially Nvidia, were living in “bubble land.” And the breakthroughs that were foundational to Nvidia’s success—neural networks and parallel computing—once upon a time were viewed by mainstream scientists as “obsolete toys.” “To many computer scientists,” writes Stephen Witt, “trying to build an AI was like trying to find Bigfoot.” I read The Thinking Machine to better understand the science and the people behind one of the world’s most successful companies. The success of Nvidia teaches several key lessons that anyone—including investment companies and the companies in their portfolios—can apply to running a better business: Lesson #1: Expanding the Boundaries of Possibility. In the epigraph to the book, Mr. Witt quotes Marcus Aurelius: “Practice even what seems impossible.” In describing the decision to back Nvidia, Tench Coxe of Sutter Hill Ventures told the author: “The reason we backed these dudes is because they were world-class computer scientists. The average CEO will try to listen to the customer, but in computing, that’s a big mistake, because customers just don’t know what’s possible.” Until Nvidia came along, Geoffrey Hinton, a scientist who spent years developing neural networks, encountered indifference and even hostility from the scientific community. This is true of many of the scientists Nvidia sought out and supported in its quest to expand computing power. Lesson #2: Running a Truly Flat Organization. With AI, writes Mr. Witt, Nvidia CEO Jensen Huang “experienced a damascene epiphany.” He understood the potential immediately. Based on the capabilities of AI in computer vision, Huang realized that AI could learn virtually anything and he could use existing Nvidia computing capabilities to corner the market on the necessary hardware. He announced that he was betting the company. “He sent out an email on Friday evening,” a team member recalls, “saying everything is going to deep learning and that we were no longer a graphics company.” Huang often would tell his staff, “I need all of you to be ready. You never know when you might suddenly become the most important person in this company.” A flat organization—and the decision-making speed that goes with it—is one of the many reasons that Nvidia is one of the most attractive places to work for recent tech graduates.2 “The ever-present danger of creeping bureaucracy” is why Nvidia CEO Jensen Huang has focused on keeping things flat and agile.3 Lesson #3: Fear of Failure as a Mantra. Back when Nvidia was valued as a gaming company as opposed to a cutting-edge AI company, Nvidia more than once had to consider the possibility of closing its doors. Such experiences left a lasting mark, so much so that for many years, even during periods of massive profits, Jensen Huang opened staff presentations with “Our company is thirty days from going out of business.” For Nvidia’s CEO, writes Stephen Witt, “desperation, not inspiration, was the mother of victory.” Fear of failure as the firm’s mantra also comes with what Mr. Witt describes as “a surreal work ethic.” Like a Microwave In addition to vital lessons on how to run a kickass, world-changing technology company, The Thinking Machine offers a healthy, evidence-based perspective on all the doomsday prophecies still surrounding AI. In May 2023, hundreds of tech industry leaders endorsed a Statement on AI Risk equating the potential for extinction from AI to pandemics and nuclear war. And in The Coming Wave technologist Mustafa Suleyman writes about the potential for AI to spark wars “accidentally for reasons that forever remain unclear.” Jensen Huang did not sign the 2023 statement as he does not think this way. An AI, Mr. Huang tells Stephen Witt, “is no different from how microwaves work … All it’s doing is processing data. There are so many other things to worry about.” Nvidia’s CEO sees AI as a “pure force for progress” that is spurring a new industrial revolution. In the final chapter of The Thinking Machine, Mr. Witt explains how this optimistic view is part of what has allowed Nvidia to become so fantastically successful: “The reason that Jensen succeeded in fields where others had failed—parallel computing, AI, the Omniverse—was precisely because he didn’t tolerate airy speculation about the future … The potential for human extinction was not a question of corporate strategy and thus, to him, was as foolish as drawing a dragon on the unexplored portion of the map.” |
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The Thinking Machine
The Art of Uncertainty:
How to Navigate Chance, Ignorance, Risk and Luck By David Spiegelhalter
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Liz Hecht, April 2025 |
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On Tuesday, April 8, after watching my personal investment portfolio plummet for four days straight, I sought solace in the Wall Street Journal and found an article entitled “Here’s Why You Shouldn’t Check Your Portfolio Right Now.” The article concludes by advising investors to “Do Nothing” with a quote from financial adviser Martin Lowenthal: “I’ve got full faith in the American economy to ride this out.” On April 13, after more market chaos, the Journal runs another article with a somewhat different message: “Will the Last Investor to Leave America Please Turn Out the Lights.” Columnist James Mackintosh documents how President Trump’s trade war is having a negative effect on stocks, bonds and the dollar—and even more concerning, causing a “loss of faith in America.” If all this carries on, concludes Mr. Mackintosh, “U.S. markets have a long way to fall as foreigners flee.” I never sell on weakness, and so far I’ve resisted the urge to indulge my survivalist leanings (buying a gun, stockpiling food). But I do feel compelled to do something—anything to get a grip on my own rising sense of dread. Oh, I know what will help: Read a book! When the going gets tough, the tough read. And what better choice right now than The Art of Uncertainty.
David Spiegelhalter is a professor emeritus of statistics at the University of Cambridge and the author of the best-selling book The Art of Statistics. He was knighted in 2014 for his services to medical statistics and his role in improving the communication of quantitative evidence.
In the book’s introduction, Professor Spiegelhalter writes, “Uncertainty is all about us, but, like the air we breathe, it tends to remain unexamined. This book will try to do something about that.” Here are three of many interesting things Professor Spiegelhalter’s book teaches readers about uncertainty: Uncertainty is personal. “Tolerance of uncertainty can vary hugely between people—some might get a sense of excitement from unpredictability while others feel chronic anxiety.” As with almost all things in life, it’s not what’s happening to you that matters but what you think is happening to you. In other words: Uncertainty is an essential part of the human condition. Deal with it. And one way to deal with it is to quantify it. Uncertainty is best expressed in numbers—not words. In 1961, the U.S. Joint Chiefs of Staff gave the Bay of Pigs invasion a 30% chance of success. The General writing a report to President Kennedy translated 30% as “a fair chance,” by which he meant “not too good.” President Kennedy interpreted “a fair chance” differently and gave his support to the invasion by 1,500 Cuban exiles. More than 100 were killed, most of the rest were captured and Cuba drew closer to Russia as a result.1 This all happened long after probability theory began to take shape during the 16th century. And yet still today, it’s surprising how often people rely on words when numbers, even when expressing uncertainty, can provide greater precision. In sum, concludes Professor Spiegelhalter, “words alone are poor at communicating degrees of uncertainty, since their interpretation can vary hugely between people, languages and contexts.” Uncertainty is best managed by foxes―not hedgehogs. “The fox knows many things but the hedgehog knows one big thing.”2 Foxes are better at swiftly absorbing new information and being pragmatic while hedgehogs anchor on one unchanging worldview. Foxes excel at what Professor Spiegelhalter would call “being Bayesian” or revising expectations in response to new data.3 The Art of Uncertainty lauds “the humility to abandon initial assumptions and completely rethink our ideas” and counsels readers to “judge if anyone―whether a politician, journalist, scientist or some influencer expressing complete certainty in their bizarre beliefs―is being far more confident than they should be.” I have lived and invested through Covid, the Great Financial Crisis and the tech bubble bursting. But the uncertainty born of the current tariff tantrum feels different somehow, scarier and less analyzable. How can one model the mind of Donald Trump? Who can handicap the impact of his next ill-considered, bizarre action? As I write this, the Wall Street Journal continues to report on the numerous ways the U.S. economy is starting to stall with headlines such as “Trump’s Trade Offensive Threatens America’s Financial Primacy“ (April 20), “Dow Headed for Worst April Since 1932” (April 21) and “America Inc. Slashes Spending as Tariff Uncertainty Swirls” (April 28). This last article notes cuts in corporate travel, delayed construction projects, a slowdown in hiring and (this hits home) reduced spending on consultants. The Art of Uncertainty covers centuries of evolution in how human beings have learned to manage the unknown. Acknowledging uncertainty, the author observes, “need not stop us from considering plausible futures, making decisions and getting on with our lives.” And so, trying to be more fox than hedgehog, I continue to Trump-proof my portfolio and think about all the innovative, resilient companies in the world that will survive long beyond the tenure of any one political regime. |
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The Algebra of Wealth
A Simple Formula for Financial Security By Scott Galloway
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Liz Hecht, January 2025 |
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“I’ve met hundreds, perhaps thousands of entrepreneurs, and I’m convinced the majority did not start companies because they could, but because they had no other options.” ―From The Algebra of Wealth Once upon a time long ago, I was hunkered down at my desk generating some last-minute edits for the Wall Street trade publication I worked for when suddenly I detected a presence by my side: My boss. My boss was not there to say, “Hey Liz, good job for scooping the Wall Street Journal!” Oh no. He wanted to request that I dress more formally at the office. Having been on deadline without a break for close to 17 hours, I was in no mood for this. “Well gee,” I said. “I would like to dress more formally, too, but unfortunately I do not have enough money to pick up my dry cleaning this week. Maybe if this company paid me a living wage, I’d dress better.” Thus an entrepreneur is born.
Scott Galloway, a professor of marketing at NYU Stern School of Business and a serial entrepreneur, published The Algebra of Wealth in 2024. I wish he had written this book decades ago when I was first cutting my teeth in the world of work.
Early in Algebra, Professor Galloway notes that “this is not a typical personal finance book.” Happily, it’s not. The word “algebra” in the title promises the certainty of a formula applied to changing, often unknown quantities. And this book does indeed deliver a formula that pleasingly integrates quantitative and qualitative variables. The quantitative part is simple: ECONOMIC SECURITY = Passive income > Burn rate “Economic security,” Professor Galloway writes, “is control. … It is knowing that you can plan for the future, commit your time as you see fit, and provide for those who depend on you.” Economic security means “acquiring sufficient assets—not income, but assets—such that the passive income they generate exceeds the level of spending you choose for yourself—your burn rate.” The Algebra of Wealth proceeds to address in depth the qualitative ingredients—Stoicism, Focus and Time—that will help readers turn income into assets and labor into capital. A final section entitled Diversification offers a concise tutorial on the economy and the financial markets. Professor Galloway describes the financial markets as “the phone booth in which money changes into its superhero outfit to become capital” and advises which investments to emphasize (ETFs, a cost-effective way to achieve portfolio diversification via a single security) and what to avoid (day trading, “like gambling but with worse odds and no free drinks”). Different readers will respond to this book in different ways. I personally am grateful for the following wealth-building life lessons: Find Your Talent versus Follow Your Passion. “Passion careers suck,” the author observes. “Follow your passion” is Latin for “Prepare to be exploited.” This is good advice for most people, particularly as most people don’t necessarily start with a passion but find one through experience. Professor Galloway describes how he discovered a passion for writing through the discipline of writing a weekly newsletter: No Mercy/No Malice. “For most, the kind of passion that guides us, a lodestar-on-the-horizon kind of passion, is not a birthright. It’s something we find through work.” In an excellent chapter on the ROI of various professions (“be careful what wave you’re paddling into”), Algebra describes media (publishing, television, journalism), for example, as “a volatile business that can feel exploitative.” Don’t Worry, Do Prepare. On the road to building income that becomes capital, the author recommends turning expense management into a “rational obsession.” “Maintain focused attention on your income, spending and investments, without letting yourself become emotionally engaged,” he counsels. “The trick is to keep it an intellectual exercise, to give yourself the feeling of control, not increase your anxiety.” He cites a survey of senior citizens finding that their biggest regret was worrying too much.1 Remember Inflation. Inflation, writes Professor Galloway, is “a rodent gnawing at the pillars of wealth, the rot in your foundation, a rising tide that never ebbs.” I tend to think of compounding with respect to the power of long-term investing. But Algebra has intensified my focus on the reality that inflation, too, compounds and should be considered when making financial life choices such as how much cash to hold. In an introductory chapter entitled “Two Jackets and a Glove,” readers learn that the author comes by his approach to money through a difficult financial situation as a child. This somehow makes the lessons learned from the book all the more affecting and indelible. Professor Galloway dedicates The Algebra of Wealth to his sons: “For Alec and Nolan. Please read this book, and take care of your old man.” And while Algebra is a great read for anyone—old or young, already set financially or just trying to survive—the book is particularly relevant for young people just starting to define their path toward wealth. |
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The Money Trap
Lost Illusions Inside the Tech Bubble By Alok Sama
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Liz Hecht, October 2024 |
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“When you give people too much money, they tend to spend it.” ―From The Money Trap The Money Trap is a page-turner that starts strong: “Someone wants me out of the way. Someone desperately wants me out of the way. I don’t know who and I don’t know why, but I am about to find out.” Author Alok Sama left his position as president and CFO of SoftBank Group International after a frightening smear campaign involving protracted surveillance of him and his family. One part whodunit, one part autobiography and one part exposé of the fantasies and foibles of tech industry investing, The Money Trap explores several important themes in venture capital investing:
This book is particularly relevant when investment banking revenue is rising and, according to the Wall Street Journal, “lower interest rates are stirring animal spirits in U.S. boardrooms.”1
Aside from Sama himself, the central Money Trap character is Masayoshi Son, CEO of SoftBank Group and mastermind of SoftBank’s Vision Fund, one of the largest-ever technology venture funds. Sama writes that many of the fund’s individual investments were “bigger than the average technology fund.” Equally notable, however, was the speed of investment. “Capital was deployed with the frequency of politicians making promises, creating a self-fulfillingly euphoric environment.” SoftBank Vision Fund can be credited with many of what Sama describes as “unimpeachable” and truly visionary investments in companies such as ByteDance, Nvidia and Arm. The fund also invested in companies that did not work out such as Wag, a dog-walking service, Zume, a company using robots to make pizza and WeWork, the inspiration for the Apple TV series WeCrashed. SoftBank’s CEO also was an early investor in Alibaba, turning a $20 million stake into more than $100 billion. After less than 20 minutes,2 Masayoshi Son promised $4.4 billion to Adam Neumann of WeWork, which likely prompted Sama’s description of Neumann’s tongue as “a weapon of mass seduction.” The Money Trap offers several cautionary examples of non-technology companies such as WeWork being valued as technology companies. Elevation Partners Founder Roger McNamee has observed that “every use case isn’t useful.3 In the same vein, every company using technology isn’t a technology company. When in February of 2020 the Wall Street Journal ran a story about the alleged source of the “dark arts campaign of personal sabotage” against the author, Alok and his wife were able to share a joke about certain aspects of the story. And early in the book, Alok laughs out loud when thinking about “the mastermind who commissioned this stakeout being presented with pictures of my dog chasing squirrels.” Every story has a moral and different readers will ascribe different morals to The Money Trap. A key takeaway for me is the importance of maintaining a sense of humor. Read this book if you or someone you care about is considering or already engaged in investment banking. Read it if you want an inside look at the highs and lows of venture investing. And read it if you simply want a ripping good story. The book jacket says this is Mr. Sama’s first book. I hope he will write another one soon. |
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