Wealth-Building in an Age of Feedback Loops.
Among all the insanity of the world, we’re also on the edge of an exponential age of wealth fueled by the explosive growth in how fast information moves. Fortunes can rise or fall on the back of a monkey-jpg, a narrative, or a viral shift in perception. As tempting as it is to chase the latest high-return bet, it’s never been more important for DIY investors to ask some awkward questions. For example:
- What blind spots am I missing?
- Whose version of reality am I believing, and at what cost?
George Soros, and How Reflexivity Shapes Reality
George Soros’s theory of reflexivity* isn’t just a footnote, it’s a slap-in-the-face to everyone who thinks markets move for rational reasons. The efficient market hypothesis? Even that’s been taken behind the wood-shed for a good old fashioned whippin’.
Conventional wisdom states that markets simply reflect fundamentals, Soros says ‘nope’.
Markets create reality through our collective expectations and actions. It’s a self-fulfilling prophecy fed by mass-psychosis.
Investors move money based on where they think things are headed, and in the process, they make those things happen. Reality, in turn, shapes new perceptions. It’s a snake-head eating the tail on the opposite side, a tail wagging a dog, munching on the tail of a another dog, and it’s a loop that repeats forever until it breaks violently.
A meme isn’t what happens at a Coldplay concern when your wife finds out. Memes are now fundamental market forces.
*What’s really obvious after you learn about the other activity George Soros engages, is that memes can be engineered, weaponised, and sometimes cynically deployed to steer crowds, reset debates, or even fracture communities.
Meme Investing: From Dogecoin to Fiat Doubt
Memes now punch above their weight, not just in culture but in capital. “Diamond hands,” “To the moon,” “Stonks”…these are as much financial engineering, as they are corporate strategy, persuading armies of retail investors to buy, hold, or revolt. NFT’s, bitcoin…Microstrategy…. Yes, sometimes, the crowd gets it right and unearths value missed by the suits. Other times, a determined meme can outpace reality faster than a hungry toddler at the mall – and both result in disappointed bagholders in its wake.
Take Bitcoin. Personally, I see it as a foundational pillar for self-sovereign wealth. I see it as a hedge against inflation, debasement, and overreaching central banks. Charlie Meaden, in contrast, places it squarely in the meme column: a crowd-powered narrative existing on a knife-edge between collective conviction and potential mass delusion.
Can it be both? Is that duality the point?
The tension between what something is versus what we believe it is, lies at the heart of reflexivity and memes.
And as central banks dabble in monetary experiments (cut, hold, hike, repeat), narratives around inequality, purchasing power, and asset inflation become their own financial memes, shaping policy itself. I argue for significant official cash rate cuts to spark growth in NZ urgently, for example, but others (rightly so) warn it only breeds inequality. In a reflexive system, both can be true, but in a way it depends on whose perception rules the day.
Can We Have An Opinion AND Get Along?
The real tragedy is how hard it is for most of us to hold two ideas at once. You build your conviction, study the data, form a worldview…and then BLAMMO… a counter-narrative comes from the “wrong” tribe, or worse, from someone you’re told isn’t credible. No one believes anything from the person who knows a person who said she talked with a Trump-supporter. Truth becomes a casualty, and with it, your flexibility vanishes. If you’re too rigid with your views, you have no way of recovering from a blind spot when the meme-party’s moved on.
Of course, the other option is to listen to the armchair critics and the sycophantic social media simps of the state, but they rarely build in others the kind of resilient thinking needed to spot and survive the next regime change.
If you won’t throw your ideas into the public arena, they’ll just turn into hardened, meme-turd dogma, ready to be flushed away by the next viral wave.
Are We Being Played?
If the invisible hand of the economy has a sense of humour, and I’m pretty sure it does, it’s that the very tools we use to seek consensus (media, memes, and community), are the theatres of battle so easily manipulated. Soros himself understands that it’s possible to “engineer” these loops, not just in markets but in politics and culture. That alone should give pause to any everyday investor or parent, thinking about what kind of legacy or advice they want to leave for the next generation.
The Passive-Aggressive, Yet Humble, Investor
Exponential noise, and engineered narratives abound, but the rarest commodity is intellectual humility. Man, it’s hard to be wrong, and to pivot. I think if we can, though, we can build conviction for when it matters. Bitcoin was just the start. Wealth today might be about spotting trends, but tomorrow, it’ll belong to those able to live with complexity, to filter memes from meaning, and to separate, often painfully, some tightly held beliefs connected to larger, more uncomfortable truths. Hey, if it was easy, everyone would be doing it!
Following my recent discussion with Charlie Meadon it’s a question I’ve been mulling over, and I’d like to invite you to consider it too: am I acting, or reacting? Am I adaptively filtering out feedback loops before making investment decisions, or am I trapped in someone else’s engineered reality?
It’s my growing conviction, that the exponential age doesn’t reward those who’re right, but those who are ready to relearn. Not just once, but again, and again, and again…
