The essay outline for Money - Days of Future Past encodes a tight argument chain hiding behind telegraphic shorthand. Unpacking it reveals a single thesis: recalibration dissolves sunk costs, and share replaces time horizon as the investor’s true anchor.
The starting point: past and future are arbitrary
The outline says “start from 10-2e6”—the note that past and future don’t exist objectively. They’re context-dependent abstractions. The common-sense notion of cause and effect works because variants exist in the multiverse—not because the past objectively precedes the future. If that’s true, then “recalibrating” between past and future is only meaningful within a particular frame.
Recalibration as the dissolution of sunk costs
This is where the argument chain fires:
- If past and future are arbitrary, then how much time you spent doesn’t matter. Time spent is a sunk cost—it belongs to a “past” that has no objective weight on present action.
- Since money is time, the same applies: how much money you spent doesn’t matter either.
- Buffett’s insight lands here—“the stock doesn’t care what you paid or that you own it.” Decisions should be based on the present and where you want to be, not where you’ve been.
- The Kelly criterion is the formal expression of this perpetual recalibration. It sizes every bet relative to current capital—never historical P&L. Each decision is a fresh optimization given where you actually are, not where you came from.
- Therefore, invest in preparedness. Since the past is sunk and the future is genuinely uncertain (uncertainty is axiomatic), the right strategy is positioning—being resourceful and redundant enough to act on whatever the present reveals.
The deeper move: target share over time horizon
The conventional wisdom—“know what you’re focused on in the long-run”—seems sound. But it hides a contradiction: how can you be focused on the long-run while hunting for entry points in the short-run? You’re straddling two temporal frames that, per the starting premise, don’t exist objectively.
The January 4th reflection resolves this: time doesn’t exist objectively, but money acts as a measure in edge cases. Ayache’s insight is that the market doesn’t unfold in time so much as it creates a temporal dimension through the act of pricing. The time component in prices emerges with the introduction of money—in barter, there is no such component. Money creates the dimension that time alone can’t furnish.
This is why knowing your target price—derived via target share—can be more important than knowing your time horizon.
Share as the invariant anchor
The concept of “share” here is Li Lu’s, not Rothbard’s. Rothbard’s share is physical—evidence of part-ownership. Li Lu’s share is proportional: your percentage of purchasing power in the economy.
Li Lu’s framing is precise: wealth is not the absolute number but your percentage share in the economy. As long as you maintain your share, you retain your wealth even if the pie shrinks. If your share increases, your wealth grows regardless of macro conditions. The goal of value investing is to hold shares of the most dynamic companies in the most vibrant economies to preserve and grow that proportion.
The line from Li Lu’s notes puts it starkly: “Share + Return (share matters more than return) >>> Only paying attention to return.”
This dissolves the short-run/long-run dichotomy entirely. Recalibration is always about “what’s my share now and what should it be?”—a question that has nothing to do with the past (how much you spent, how long you held) and nothing to do with predicting the future (when will the price move). Target price is derived from target share—the ownership percentage at which the margin of safety holds—and that’s the only anchor you need.
The Kelly criterion fits here too: Kelly maximizes the long-run growth rate of capital, which is effectively maximizing your share over time. Not absolute return on any single bet, but the proportion of the whole.
The title
”Days of Future Past” captures the central paradox. Money must evoke the past—the regression theorem demands it—but the demand for money lies in the future, and today’s demand can dwarf yesterday’s prices. The investor’s job is to recalibrate between these two forces, treating neither as objective—and measure the position not in time but in share.
Related:
- Money - Days of Future Past
- Li Lu
- Elie Ayache
- Warren Buffett
- 10-2e6 Any theory must account for the meaning of ‘the future’ and ‘the past’ because both are arbitrary abstractions and do not exist objectively in reality
- 4-1a4b6a0.3 Time is money means money is time
- 13-1a3a2e5 Time component in prices emerges with the introduction of money
- 13-8a3 Money must evoke the past, but the demand for money lies in the future
- 5-1b1 Invest in preparedness. Be redundant and resourceful in every aspect. Minimize opportunity cost to achieve great things.
- 13-1a3a2d4 The purchasing power of money in terms of all other commodities is continually changing, and there is no way to measure such changes