Companies are artificial organizations of physical assets, intangible assets, and people. They are graphs through with information and resources flow. This is very similar to natural organisms when viewed through a biological lense. Just like plants and animals, businesses are born, grow quickly, expansion slows, and they grow old and then die. Some companies, like creatures, have qualities that allow them to navigate the harsh world around them, protecting them from threats and facilitating long life.
Connections
Darwin’s Solution For Nature’s Chaos
Link Explanation: The linked note explains how variance between creatures of the same species or otherwise is the solution nature derived against chaos. It is the fundamental solution to the chaos of the universe. From an investing perspective, we can learn from this. Diversifying your portfolio into different industries, different types of companies, different geographies, different asset classes, creates variance in your wealth. It means that when chaos comes, you won’t be wiped out. We can also find lessons in analyzing individual companies. Incubator-type businesses, which are always investing in innovation are likely to waste a lot of money, but in the process create variance and thus adaptability in how they operate, making them more durable to the chaos of the universe.