Thoughts on AI and Thoughts on Middle East Conflict

Painting is by my father, Naum Katsenelson. Prints available on Katsenelson.com.

With your help, we have raised over $277,000 (across multiple charities) to help Israel cope with the Hamas atrocities.

The offer still stands: If you donate $100 or more to one of these charities, we’ll be delighted to mail you a signed copy of one of my books – Soul in the Game: The Art of a Meaningful Life or The Little Book of Sideway Markets. Donate $200 or more and we’ll send you both. (Email receipt to Barbara at pa@imausa.com and indicate which book you’d like to receive. We can mail in the US only).

By the way, holidays are coming. Donate to these charities, and we can mail signed books directly to your friends as holiday gifts. Everybody wins!

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I received incredibly positive and supportive responses to my essays about Israel and antisemitism from readers (you can read some of the comments here).

Many IMA clients reached out to me directly, expressing their support and saying that my investment prowess was not the only reason they joined IMA – character was also an important factor in their decision. They were not surprised by my taking a public stand on this issue.

As I was thinking about the conflict, reading some replies from readers, and talking to friends, I realized that most (not all) the people who are walking on the pro-Palestine marches are not bad folks. They are not antisemites who want death to Israel. Many of them are good-hearted people who simply don’t understand the Middle Eastern conflict. I don’t blame them. This conflict has been going on for centuries. These folks see the deaths of innocent civilians in Gaza and they want them to stop. I, every single Jewish friend of mine, and nearly all Israelis feel the same way – nobody wants a single innocent Palestinian to die.

Some see this as a war of retribution and deterrence against Palestinians, but nothing could be further from the truth. Israel is liberating Gaza from Hamas for the Palestinians and its own sake. Israel is fighting against an enemy, Hamas, whose members’ minds have been brainwashed into thinking that for every killed Israeli they will receive an extra virgin in the afterlife. These people love death more than they love life. This is not a parabolic statement – they are looking forward to dying.

I am very curious about the world.  But I have to admit, even as a Jew my knowledge about this conflict was superficial until October 7^th. We only have so much time on this Earth. The time I spent catching up on the history of Israel and the Middle East I could have spent reading a book, watching a movie, learning more about Impressionist painters (my latest endeavor), or reading and writing about composers (something I have neglected lately and want to come back to). There are so many conflicts around the world I know very little about because I made a deliberate choice to focus my most scarce resource, time, on something else.

Most people who are protesting for a ceasefire and supporting Palestine simply have not taken the time to educate themselves about this issue to form an educated opinion.

They have a life and other interests. I completely get it.

As a result, they form an emotional opinion based on familiar constructs (hacks). This is where the oppressor/oppressee framework is used. And this is why skin color becomes a deciding factor. Although, skin color should not be a determining factor in trying to figure out who is right and wrong in any conflict. Ironically, Ashkenazi Jews (like yours truly), who are predominantly seen in the West, only make up half of the Jewish population in Israel. The skin tone of a large number of Israeli Jews is not any different from those of Arabs.

These frameworks, which fail miserably to describe the situation in Israel, are the reason Israel is often portrayed as a colonizer and an apartheid state. Gaza is described as an open-air (beach-front) prison. The irony of the next one is mind-boggling: Jews, who were one of the largest victims of the Nazi genocide (they killed about two-thirds of Jews), are accused of committing genocide. While Hamas, whose charter literally (!) states "death to Jews and Israel," is painted as freedom fighters trying to liberate Palestinians.

Again, if I knew nothing about this conflict, seeing pictures of dead Palestinians, I might have been marching myself in pro-Palestinians rallies. In fact, I am, like most Jews, pro-peace. Israel wants to live in harmony with the Palestinian people and let them have their own state (with certain limitation, i.e. the ability to militarize).

So here is my solution, instead of spending weeks of my free time writing a small book on this conflict, going back to the time of Abraham, I decided to take an easier way out which is better for both you and me. I am going to recommend watching these two videos.

The first one, created a few years ago, will provide you with a history of Israel in literally 17 minutes.

The second is a longer one, an interview with Haviv Gur, a journalist with the Times of Israel, by Jack Carr. It was recorded a week after October 7^th and provides a greater, more nuanced perspective on this conflict from both sides. It is a must watch even if you have a good understanding of what is going on.

And finally, I suggest listening to Sam Harris’ speech “The Bright Side Between Good and Evil” on the morality of this war – it is brilliant. I’ll add an excerpt from Sam’s speech at the bottom of this email.

And one more thing. If even after you watch these videos, "From the river to the sea, Palestine will be free," sounds like a good jingle to you, I am here for you. Let me help you decolonize your inbox from this Zionist* . The decolonize, unsubscribe button is conveniently located at the bottom of this email. My emails about investing, life, and music are not written for you.

* A person who thinks that the only democracy in the Middle East, home to ten million Jews and Arabs, has a right to exist.

My Thoughts on AI

Article available in Spanish here.

A century ago, one fifth of the country was involved in agriculture. Due to the transformation of farming technology, only 1% of the country is now involved in farming, while our supermarkets are flooded with cheap food. I could be wrong, but I don't see the 19% of the country who used to farm wandering around unemployed. They have retrained to do other things.

Innovation disrupts, but it also creates new jobs and improves the standard of living of society. A century ago, you could not have imagined most of the jobs we have today. I'm not just talking about social media celebrities; think about software engineers, data scientists, cybersecurity experts, etc. In fact, most white-collar jobs you see today did not exist 100 years ago. Yes, if you specialized in driving horse-powered carriages, you had to acquire new skills.

AI will displace many jobs, but it will also empower people with new productivity tools. Microsoft Excel replaced jobs that required people to add up rows of numbers with calculators, but it created many more. In the 1960s, corporations had departments filled with typists. A photocopier and then the personal computer put these hardworking folks out of a job, but they retrained to do other things.

If we have a victim mentality, AI will run us over; if we embrace it and adapt it to our lives, it may become our best friend to do the jobs we are doing, while our soon-to-be-unemployed coworkers complain about AI.

AI may have a similar impact on our lives as electricity did. Unless it becomes sentient and just like the Terminator, it turns against us (smarter people than me cannot agree on this, especially on a reasonable time frame, so I withhold my opinion on it), it will likely improve our lives significantly. One industry that immediately comes to mind is healthcare – we need major disruption in that sector.

AI may disrupt and completely reshuffle the power dynamics in some industries. Travel, for example, comes to mind; we may start looking for trips and booking tickets with the help of our AI assistant without going to the travel websites. Some companies will adapt and become winners, while others won't and will become market-share donors.

As I am typing this, I realize (again, something I do daily now) how important management is. In our analysis, we should pay close attention to how companies are embracing AI. Are they giving it lip service or are they really adopting it and changing the business to take advantage of it?

When it comes to AI generating creative output, at first glance it looks impressive; but, as Nassim Taleb put it:

ChatGPT is a statistical representation of things found on the web, which will increasingly include ITS OWN output (directly and secondhand). You post something picked up from it and it will use it to reinforce its own knowledge. Progressively a self-licking lollipop.

If you want to see ChatGPT creating art, for the fun of it, spend some time on myfavoriteclassical.com, where I post music articles. Every single picture there is created by AI. I love impressionist artists, and thus I love these little AI creations. However, if you zoom in closer, you'll find violinists playing with toothpicks, pianists with three hands and cellists with multiple arms and legs.

This self-licking lollipop is impressive, but it still has a lot to learn. (By the way, if you have not signed up to receive my classical music-only articles, you have an opportunity to do it here). Also, Nassim is right (as usual): The more we rely on AI and the more content it creates, the less creative it and we become.

On a related topic, I have strong thoughts about AI and writing, which I shared with my kids.

AI can be either your friend or your worst enemy. I use it to answer emails that require no thinking, which is a great time and energy saver. AI is also my friend in helping me to find better words to express my thoughts as I write.

However, the most important part about writing is that it is focused thinking; it helps me to figure out what I think and exposes flaws in my thinking. This is why I still diligently put in two hours a day writing; I don't want AI to cause my thinking muscle to weaken.

Here's an analogy: I used to have good handwriting. Typing killed it. Today I have worse handwriting than a doctor, and I did not even go to medical school.

This is why I strongly encourage my kids to write their own essays, and I go a step further by encouraging them to write daily.

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The Bright Line Between Good and Evil, by Sam Harris

“Of course, the boundary between Anti-Semitism and generic moral stupidity is a little hard to discern—and I’m not sure that it is always important to find it. I’m not sure it matters why a person can’t distinguish between collateral damage in a necessary war and conscious acts of genocidal sadism that are celebrated as a religious sacrament by a death cult.

Our streets have been filled with people, literally tripping over themselves in their eagerness to demonstrate that they cannot distinguish between those who intentionally kill babies, and those who inadvertently kill them, having taken great pains to avoid killing them, while defending themselves against the very people who have just intentionally tortured and killed innocent men, women, and yes… babies. And who are committed to doing this again at any opportunity, and who are using their own innocent noncombatants as human shields.

If you’re both sides-ing this situation—or worse, if you are supporting the wrong side: if you are waving the flag of people who murder noncombatants intentionally, killing parents in front of their children and children in front of their parents, burning people alive at a music festival devoted to “peace”, and decapitating others, and dragging their dismembered bodies through the streets, all to shouts of “God is Great.”

If you are recognizing the humanity of actual barbarians, while demonizing the people who actually worry about war crimes and who drop leaflets and call cell phones for days, in an effort to get noncombatants to leave specific buildings before they are bombed, because those buildings sit on top of tunnels filled with genocidal lunatics—who again, have just sedulously tortured and murdered families as though it were a religious sacrament, because for them it is a religious sacrament.

If you have landed, proudly and sanctimoniously, on the wrong side of this asymmetry—this vast gulf between savagery and civilization—while marching through the quad of an Ivy League institution wearing yoga pants, I’m not sure it matters that your moral confusion is due to the fact that you just happen to hate Jews.

Whether you’re an anti-Semite or just an apologist for atrocity is probably immaterial. The crucial point is that you are dangerously confused about the moral norms and political sympathies that make life in this world worth living.”

Drawing is by my brother, Alex Katsenelson. Prints available on ArtistUSA.com.

The Return of the Violin

A few years ago I watched the documentary The Return of the Violin, and it had a tremendous impact on me. Watch it, even if you don’t care for classical music – this movie is so much more than its title implies.

I was going to write a synopsis of the film, saying that “truth is stranger than fiction,” but then I stumbled on this summary of the movie in The Jewish Chronicle, which made the same point:

No movie director could make up a story like this.

A little Jewish boy [Bronislaw Huberman] from Czestochowa, Poland, plays the violin with such virtuosity that a nobleman makes him a gift of a priceless Stradivarius, which he uses to bedazzle the composer Johannes Brahms.

But when he grows up, becoming one of the great classical musicians of his day, the violin that has come to bear his name is stolen. He never sees it again.

Unbroken, the man flees to Palestine before World War II, founds the national orchestra, rescues hundreds of Jewish musicians from certain death in Nazi Europe and is hailed as a hero before he dies.

Fifty years later, his beloved violin surfaces when the man who stole it makes a deathbed confession. The instrument is sold twice and finally acquired by superstar Jewish performer for a jaw-dropping $4 million.

That same man returns to Czestochowa, where it all began, to perform the previous owner’s favorite concerto by — you guessed it — Brahms.

Truth is stranger than fiction.

This documentary prominently features Brahm’s Violin Concerto in D major, op. 77. As the movie makes clear, the violin part in this concerto is very technical and difficult to play. Someone described it as written not for violin and orchestra but against violin and orchestra. Here are three performances:

Click here to listen.

• By Bronislaw Huberman – I was shocked when I stumbled on this performance (recorded in NY in 1944). According to the movie, Brahm’s himself cried when he heard then-nine-year-old Huberman perform this concerto in 1891.

Click here to listen.

• By Itzak Perlman – this is the performance I am most familiar with. He was not mentioned in the movie, but I would not be surprised if we find that he owes his life to Mr. Huberman – both of his parents were Jews from Poland who immigrated to Israel (then Palestine) in the 1930s. The performance is in three parts:

Click here to listen.

Vitaliy Katsenelson is the CEO at IMA, a value investing firm in Denver. He has written two books on investing, which were published by John Wiley & Sons and have been translated into eight languages. Soul in the Game: The Art of a Meaningful Life (Harriman House, 2022) is his first non-investing book. You can get unpublished bonus chapters by forwarding your purchase receipt to bonus@soulinthegame.net.

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