Flying a “Foil in the Flow” above the “Walled Gardens”

Post #1 out of 9: Abstract of the Notebook

This post gives Substack readers an explanation for the long posting hiatus since August 26, 2024. Following the discussions and reviews that took place during the last CTRI Conference that took place on September 22, 2024, this post presents the beginning, the Abstract, of a final Notebook to mark the dissolution of CRI and the possible placement of its IP in the Public Domain, on account of the retirement of one of the two co-founders.

This first post starts a series of nine weekly posts that add up to a final CTRI Notebook. Each post covers a section from this final Notebook titled “From Rational Investors, Inc. to the Curve, Triangle & Rectangle Institute, a 25-year Story of Change in a Hard-to-Change Industry, and What May Come Next”. This Notebook summarizes the author’s Fintech perspective on the history of retirement planning over the last 25 years, and projects its future over the next 25 years.

The ninth post will mark the last step in the dissolution of CTRI, and the possible placement of its IP in the Public Domain should no other not-for-profit organization want to actively continue the development of the “Constructive Skepticism” Curriculum. The placement of CTRI’s IP, the “Constructive Skepticism” Curriculum, in the Public Domain would make it passively available to any and all, and thus remain a match with its “Meaning” and “Purpose” to help financial clients, advisors, and executives improve their individual, business, and investment decision-making by evolving the basis for their “Predictions” from “Trust Them”, to “Show Me”, and to “See for Yourself”.

One way or the other, CTRI’s founders hope that this IP will continue to help readers answer questions such as: What new ideas will inject themselves into the culture, and how will they change the nature of the “Ideal Client” over the next 25 years? What do you need to know about such ideas, and their impact on your “Ideal Client” in order to remain a “Productive Host” in this evolving Fintech ecosystem? What can you do now, or did not do earlier, that will shape your future, and the future of your clients in this new environment?

Title of the Notebook

From Rational Investors, Inc. to the Curve, Triangle & Rectangle Institute, a 25-year Story of Change in a Hard-to-Change Industry, and What May Come Next

Abstract

This Notebook in nine sections, and published at the rate of one section per week on Substack summarizes CTRI’s work to mark the completion of CTRI’s dissolution, and the possible placement of its IP in the Public Domain. Placing this IP, called the “Constructive Skepticism” Curriculum, in the Public Domain would make it passively available to any and all, and thus remain a match with its “Meaning” and “Purpose” to help financial clients, advisors, and executives make better “Predictions” by evolving the basis for their “Predictions” from “Trust Them”, to “Show Me”, and to “See for Yourself”. Readers pressed for time, and that cannot read the full Notebook can read this Abstract, or the Conclusion which is presented in the form of memorable one-liners that summarize the key take-aways from the Notebook. Note that terms in “Italics” refer to definitions in the Glossary of “Constructive Skepticism” available on Substack. 

This paper presents a 25-year history of change in a hard-to-change industry, the Financial Industry. Additionally, it makes predictions about the next 25 years. This history of change maps the evolution of retirement planning since 1999, and articulates important milestones with recent examples that include Mike Zwecher’s 2010 book, and Thomas Idzorek & Paul Kaplan’s 2024 monograph.

Additionally, this paper makes use of the “Constructive Skepticism” Curriculum to identify foundational issues, and to predict practical solutions when prevailing “Models” no longer provide a good-enough fit with reality. Reality changes constantly, and the lack of fitness of prevailing “Models” can happen slowly at first, and then all of a sudden, as experienced by the author in the early 2000s when the retirement wave of 10,000 Boomers per day pressured the financial industry to see that siloed models did not provide good-enough solutions for what became a critical mass of new “Ideal Clients”.

This retirement wave favored solutions that worked across the business silos, and the provision of retirement planning services from a holistic perspective. Thus, the bottom-line of this 25-year history of change can be summarized as “Retirement, Procedural Prudence, and the Household Balance Sheet (HHBS)”: Acknowledging the differences between investment planning and retirement planning, seeing “Procedural Prudence” as a scalable method across the industry’s silos, and using the HHBS as a holistic implementation tool were novel ideas in the early 2000s.

Starting in 2017, CTRI focused on reading research papers about Health, Wealth, and Statistics in order to separate “Spinach” from productive ideas. This reading of research papers turned into a formalized process, The Template for Reading Research Papers available on Amazon, and a curriculum, the “Constructive Skepticism” Curriculum, available on Substack. “Spinach” refers to things we think unquestionably true but look ambiguously false after asking a few questions: For example, “Spinach” is not high in iron, and Popeye, the Iron Man did not each “Spinach” for its iron but for its vitamin A. Initially, “Spinach” in research papers felt like the exception. Over time, it became clear that “Spinach” may be the rule. Research papers present mental maps and “Models” subject to specific. “Axioms, Assumptions & Hypotheses”. Many, if not most maps and “Models” look like caricatures, some portray productive pictures. This Notebook highlights some of the productive pictures we found along the way.

Finally, this Notebook addresses the continuing evolution of retirement planning solutions, and future growth areas in the financial industry including expectations that (i) the aging Boomers’ retirement wave will soon morph into generational wealth transfer, and that, pressured by the regulatory contradictions between their statutory agencies as illustrated by the example of annuities in 401(k) plans discussed during CTRI’s last member conference on September 22, 2024 , financial solutions will move away from the Boomers’ “View Across the Silos” to become siloed again, perhaps in the form of individualized collections of risk-specific “applets’ (ii) advisors, and clients will embrace “Terrain” perspectives that recognize, and manage the presence, and position of risk-specific “Absorbing Barriers” as a counter-balance to the traditional focus on portfolio optimization and (iii) advisors, and clients will recognize the existential differences in “Meaning” between the “Ensemble” perspective of the Disinterested Observer (i.e. academics & practitioners), and the “Time Average” perspective of the Decision-Maker (i.e. clients), especially for clients living closer to their ”Absorbing Barriers” and thus with a greater sensitivity to the downside of “Variance”.

In the last 25 years, we may have lived through a wave of unfreezing of the industry’s “Walled Gardens”. In the next 25 years the walls may be freezing again, and profitable growth will become siloed again.