The Ecology of Ergodicity by Jason Buck

**Jason Buck** (0:03)
How many of you have seen the unbelievable documentary, The Last Dance, about the Chicago Bulls and their historic run? I assume most of the room is one of the best sports documentaries ever made. So I'm actually here to talk to you about the greatest basketball player of all time. That's right, Dennis Rodman.
Now, we'll get into why Dennis Rodman is actually the greatest basketball player of all time, but I want you to think about that cognitive dissonance you had when you saw the man in the wedding dress. You know, you're thinking about Michael Jordan, the free throw dunk, the logo, those six rings, but sometimes the greatest of all time might be hidden and you're not realizing it. Before we get to Rodman, I want to go to Yellowstone, and no, not Taylor Sheridan's Yellowstone Show, but actually Yellowstone Park.
Now in 1995, biologists decided to reintroduce 14 gray wolves into Yellowstone Park. This is a park of 9,000 square miles and at the time had over 20,000 elk. And you'd think 14 gray wolves is just a rounding error. Well, why did they do this? Well, in the 1920s, biologists decided to extirpate the gray wolves from Yellowstone Park. Extirpate is such a great vocab word and you like that one, don't you? Extirpate is when you create an extinction event in a localized area. So they extirpated the wolves from the park because they thought it was the right thing to do and for decades it looked like the right thing to do. The elk thrived, they were getting fat and lazy, they were hanging out in the meadows, they were hanging out along the rivers. The park looked like it was an amazing engineered landscape that was very Disney-esque but a phenomenal park. But they didn't realize this for decades, the park was rotting underneath of it. So as soon as those elk started really grazing along the river beds, they were eating all the saplings of the trees, those aspens, those cottonwood trees. They would eat the saplings down to nubs and those root systems would start to rot. And as those root systems rotted, it created the shoreline started to decay and the shoreline started to widen. The river became a little bit flatter, it became murkier, it became warmer. And without the trees, the beavers had no wood to use. And without, ecologists called beavers the engineers of ecology, because they can create unique environments that really thrive in the river beds. So without the beavers there to create little eddies and pools, the trout started to go away. So we started losing all the fish population in the rivers. Without the trees, all those birds could not hang out in the park. So slowly and surely, over decades and decades, the park started to rot from the inside.
So this is why they decided to bring back the gray wolves. Now you think 14 is not a big number or some of you are thinking, that's a bloody massacre, but that's not what I'm here to tell you about. What it did is it forced the elk to move. It forced them to move to higher ground. It forced them to not be fat and lazy and be right along the river beds and eat those saplings. So without them eating the saplings, the park started to thrive again.
The trees started to come back. Those cottonwoods and aspens, a lot of the trees actually quintupled in less than a decade. With the trees, the birds started to come back. With those trees, those root systems, they started to shore up that shoreline and started to rebuild that permaculture.
This also allowed the beavers to start building dams again. When they built those dams and those eddies and pools, it created cool pockets so the trout and the other fish were able to come back. The shoreline started to change dramatically and the rivers started to become rapids again. They started building a tremendous ecosystem. Now, did the wolves actually move those rivers and create these narrow and deep channels? No, they did not. But what they did is they affected the entire ecosystem. This is what biologists called a trophic cascade. And in a trophic cascade, the interaction of the parts makes up more than the sheer number of the parts. And this is what I think about with portfolio construction all the time is what is my trophic cascade because we have very much physics envy in investments of finance. And that physics envy leads us to a lot of math and a lot of probabilities. But in reality, we find over time that investing is much more like biology, and you have to create an ecological system that's always constantly changing and advancing.