Seeking Alpha Is for the Birds

I have a fairly blunt reaction to a lot of conversations about “finding alpha”: seeking alpha is for the birds.

Show me a sustained, scaling scarcity. Show me why the need will become larger, why meeting it remains difficult, and what you can do that materially changes the economics. Then we have something worth discussing.

If your perceived edge has no convincing answer to that, I am not sure it can compete with the opportunity to make energy dependable, health accessible, and increasingly complex systems safe. It might produce a good trade. I am asking where to spend years of work, judgment, and capital.

What makes a scarcity scale¶

By a sustained, scaling scarcity, I mean an important need whose demand expands while delivering an affordable, dependable solution remains difficult. “Sustained” means the constraint survives a news cycle. “Scaling” means more people need the outcome, each person needs more of it, or the standard of acceptable performance rises.

The scarcity can move. In fact, that is central to the argument: progress often makes the next bottleneck more valuable to solve.

Energy and dependable power¶

Start with energy. A household gaining reliable electricity can refrigerate food, cool a room, and run a business. Electrifying vehicles and industrial processes adds new uses. AI adds another layer of demand. In its 2026 outlook, the International Energy Agency projects global data-center electricity consumption rising from 485 terawatt-hours in 2025 to roughly 950 in 2030. That is a projection, but it shows the scale of the infrastructure question.¹

For me, the useful investment question is where dependable power becomes the constraint: generation, transmission, transformers, storage, cooling, or the ability to connect a facility when it is needed. A more capable model does not remove those requirements. Greater adoption can make them more pressing.

The product a customer needs is electricity delivered at the right place, at the right time, at a workable cost. A business that improves that outcome has a concrete source of value to pursue.

Materials and useful output¶

Follow that demand into materials. Consider a simple copper example. At an assumed 90 percent recovery rate, producing one tonne of recovered copper requires about 185 tonnes of ore at a 0.6 percent grade. At a 0.3 percent grade, it requires about 370 tonnes. These are illustrative assumptions: ore required equals recovered copper divided by grade and recovery.

Half the grade means twice the ore processed for the same output. It does not mean every cost doubles; geology, processing, and equipment matter. But it exposes the constraint. More material must pass through a system with finite capacity.

That is why I care about sensing, recovery, autonomy, and process control. Can we identify valuable material earlier? Avoid processing waste? Reduce downtime? Recover more useful output from the same constrained plant? The relevant measure is what happens to recovered metal, full cost, energy use, and worker exposure.

My work in industrial autonomy and pharmaceutical sensing has repeatedly brought me back to this question: which physical constraint changes the customer's outcome, and can we measure the improvement?

Health and the delivery of care¶

Health has a different scaling mechanism. The World Health Organization projects that the population aged 60 and over will grow from one billion in 2020 to 1.4 billion in 2030. Older people are also more likely to live with several health conditions at once.²

That creates demand for care across more years, with more coordination among patients, families, clinicians, and treatments. Our ambitions rise, too. We want those additional years to include independence, mobility, and the ability to participate in life.

Now imagine making medical knowledge dramatically cheaper. The opportunity is enormous, but a patient may still be waiting for a test, a procedure, a reliable medicine, or someone who can help carry out the treatment plan. An excellent answer on a screen can leave the delivery constraint untouched.

I would therefore examine the whole path to a better outcome. Can a clinician safely serve more patients? Can a manufacturing process produce more medicine that meets quality requirements? Can earlier intervention reduce the need for expensive care? And who has the budget and incentive to pay? Human need establishes importance; a workable payment and delivery model establishes a business.

Safety at scale¶

Safety scales with the amount of activity we undertake and the consequences of failure.

Take an illustrative automated system with one harmful failure per million operations. At one million operations, that rate implies one expected failure. At a billion operations, it implies a thousand. Holding the expected total constant would require a thousandfold reduction in the failure rate.

Those are hypothetical numbers, but the arithmetic matters. A system can be impressive in a small deployment and require a substantially stronger safety case at scale. Connected fleets, factories, hospitals, and grids also create dependencies through which failures can spread.

I see opportunity in preventing incidents, detecting faults, containing damage, and keeping essential operations available. The test is measurable loss reduction under real operating conditions. More alerts, more sensors, or more security spending do not establish that result by themselves.

Human agency¶

There is a related scarcity I keep returning to: human agency. As information and persuasion become cheaper to produce, the ability to decide what deserves attention—and act on that decision—may become more valuable. I want to investigate businesses that help people carry out their own intentions. Their performance should be measured by whether people achieve those goals, including when that means spending less time using the product.

Where alpha must prove itself¶

The economics matter in all of these examples. A large need does not guarantee investor returns. A company can solve a real problem and retain little of the value. Competitors can erode margins. Customers can struggle to adopt. An investor can pay a price that already assumes extraordinary success.

Strictly speaking, alpha is performance beyond what the relevant benchmark and risk exposure would explain. A growing market is insufficient evidence of it. Scarcity tells me where to look; differentiated insight, execution, value capture, and price determine whether there is an investment.

I also want to understand what happens when the business succeeds at scale. Does its revenue grow because people get healthier, energy becomes more dependable, or losses fall? Does it shift costs onto workers, communities, or future generations? Does solving today's constraint create a larger one elsewhere?

A cash flow projection makes a claim on the future. I care about the condition of that future. Future generations will inherit the infrastructure, institutions, and environmental consequences alongside whatever financial assets we leave them.

That is why sustained, scaling scarcities are my starting point. They force the conversation toward enduring needs, specific constraints, and outcomes that can be tested. They also make it possible to ask whether customer benefit and investor returns can improve together.

If you want me to believe in your alpha, show me the need that keeps growing, the constraint you can remove, the economics that survive competition, and what improves when the business gets bigger.

That is an edge I would be interested in compounding.