STREET DOGS

Edward Drinker tracked the lineages of thousands of species and showed a clear bias towards animals evolving to become larger over time.

Horses went from the size of small dogs to their modern height. Snakes from no larger than an inch to modern boas. Dinosaurs from 3inch lizards to a brontosaurus.

This isn’t surprising. Bigger species are better at capturing prey, can travel longer distances and support bigger brains.

The obvious question: why hasn’t evolution made every species freaking huge?

Two scientists, Aaron Clauset of the Santa Fe Institute and Doug Erwin of the Museum of Natural History, summed it up in a wonderful sentence: “The tendency for evolution to create larger species is counterbalanced by the tendency of extinction to kill off larger species.”

Body size in biology is like leverage in investing: it accentuates the gains but amplifies the losses. It works well for a while, then backfires spectacularly at the point where the benefits are nice but the losses are lethal. Take injury. Big animals are fragile. An ant can fall from an elevation 15,000 times its height and walk away unharmed. A rat will break bones falling from an elevation 50 times its height. An elephant falling from twice its height splashes like a water balloon. Big animals require lots of land the end game is a famine. They can’t hide easily. They move slowly. Their top of the food chain status means they usually don’t need to adapt, an unfortunate trait when adapting is required. The most dominant creatures tend to be huge, but the most enduring tend to be smaller. T-Rex. Cockroach. Bacteria.

Size is nature’s leverage. Sought after for its benefits straight up to the point that it ferociously turns against you.

Same thing applies to companies and investments.