Author: Glen

I just fin­ished read­ing The Black Swan: The Impact of the High­ly Improb­a­ble by Nas­sim Taleb

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down­load prophe­cy the movie . It’s a fun read, and I think some of the things I learned from it will help me to illus­trate Eccle­si­astes when we start preach­ing through it in a few weeks.

Any­way, here are some snip­pets I thought were worth hold­ing on to. Hope they are as use­ful to you as I think they will be to me.

The writer Umber­to Eco belongs to that small class of schol­ars who are ency­clo­pe­dic, insight­ful, and non­dull. He is the own­er of a large per­son­al library (con­tain­ing thir­ty thou­sand books), and sep­a­rates vis­i­tors into two cat­e­gories: those who react with “Wow! Sig­nore pro­fes­sore dot­tore Eco, what a library you have! How many of these books have you read?” and the oth­ers – a very small minor­i­ty – who get the point that a pri­vate library is not an ego-boost­ing appendage but a research tool. Read books are far less valu­able than unread ones. The library should con­tain as much of what you do not know as your finan­cial means, mort­gage rates, and the cur­rent­ly tight real-estate mar­ket allow you to put there. Page 1

Now if only I could con­vince Paula that this is the right way to think about book acqui­si­tions…

It was a few years after the begin­ning of the Lebanese war, as I was attend­ing the Whar­ton School, at the age of twen­ty-two, that I was hit with the idea of effi­cient mar­kets – and idea that holds that there is no way to derive prof­its from trad­ed secu­ri­ties since these instru­ments have auto­mat­i­cal­ly incor­po­rat­ed all the avail­able infor­ma­tion. Pub­lic infor­ma­tion can there­fore be use­less, par­tic­u­lar­ly to a busi­ness­man, since prices can already “include” all such infor­ma­tion, and news shared with mil­lions gives you no real advan­tage. Odds are that one or more of the hun­dreds of mil­lions of oth­er read­ers of such infor­ma­tion will already have bought the secu­ri­ty, thus push­ing up the price. I then com­plete­ly gave up read­ing news­pa­pers and watch­ing tele­vi­sion, which freed up a con­sid­er­able amount of time (say one hour or more per day, enough time to read more than a hun­dred addi­tion­al books per years, which, after a cou­ple of decades, starts mount­ing). Page 17

I’ve been struck late­ly by the num­ber of peo­ple I respect who advise us against read­ing the news­pa­per on the grounds that it makes you more stu­pid about things that mat­ter. I even stum­bled across a com­pi­la­tion of quotes against news today.

In the arts – say the cin­e­ma – things are far more vicious. What we call “tal­ent” gen­er­al­ly comes from suc­cess, rather than its oppo­site. A great deal of empiri­cism has been done on the sub­ject, most notably by Art De Vany, an insight­ful and orig­i­nal thinker who sin­gle­mind­ed­ly stud­ied wild uncer­tain­ty in the movies. He showed that, sad­ly, much of what we ascribe to skills is an after-the-fact attri­bu­tion. The movie makes the actor, he claims – and a large dose of non­lin­ear luck makes the movie. Page 31 (he foot­notes Arthur De Vany Hol­ly­wood Eco­nom­ics: Chaos in the Music Indus­try 2002)

I sus­pect the same thing is true of megachurch­es. Don’t mis­un­der­stand me — there is a high lev­el of skill involved in build­ing an orga­ni­za­tion like that. But look­ing around at min­is­ters I know, many more peo­ple seem to have the skills than have the megachurch to go with it. In oth­er words, there are peo­ple out there as skilled as Ed Young

that the world will nev­er know. I don’t think I’m one of them, mind, but I know that they’re out there. I’ve met them.

Indeed, it is not a well-known fact that the most com­plete expo­si­tion of the ideas of skep­ti­cism, until recent­ly, remains the work of a pow­er­ful Catholic bish­op who was an august mem­ber of the French Acad­e­my. Pierre-Daniel Huet wrote his Philo­soph­i­cal Trea­tise on the Weak­ness of the Human Mind in 1690, a remark­ably book that tears through dog­mas and ques­tions human per­cep­tion. Huet presents argu­ments against causal­i­ty that are quite potent – he states, for instance, that any event can have an infin­i­ty of pos­si­ble caus­es. Page 49

Inter­est­ing. You can read more about Huet on Wikipedia

.

In a famous argu­ment, the logi­cian W. V. Quine showed that there exist fam­i­lies of log­i­cal­ly con­sis­tent inter­pre­ta­tions and the­o­ries that can match a giv­en series of facts. Page 72

You can learn more about Quine on Wikipedia.

Indeed, peo­ple tend to fool them­selves with their self-nar­ra­tive of “nation­al iden­ti­ty,” which, in a break­through paper in Sci­ence by six­ty-five authors, was shown to be a total fic­tion. (“Nation­al traits” might be great for movies, they might help a lot with war, but they are Pla­ton­ic notions that car­ry no empir­i­cal validity—yet, for exam­ple, both the Eng­lish and the non-Eng­lish erro­neous­ly believe in an Eng­lish “nation­al tem­pera­ment.”) Empir­i­cal­ly, sex, social class, and pro­fes­sion seem to be bet­ter pre­dic­tors of someone’s behav­ior than nation­al­i­ty (a male from Swe­den resem­bles a male from Togo more than a female from Swe­den; a philoso­pher from Peru resem­bles a philoso­pher from Scot­land more than a jan­i­tor from Peru; and so on). Page 74–75

And yet the French remain… 🙂 Seri­ous­ly, this reminds me of bone I have to pick with per­son­al­i­ty test­ing, name­ly that it is com­plete and utter bunk. Dif­fer­ent peo­ple have dif­fer­ent ranges of tem­pera­ment, sure, but the tools we use to mea­sure those vari­ances are ridicu­lous.

[Giv­en that the nar­ra­tive fal­la­cy is so mis­lead­ing, we should remem­ber that] Only a dia­mond can cut a dia­mond; we can use our abil­i­ty to con­vince with a sto­ry that con­veys the right message—what sto­ry­tellers seem to do. Page 84

Good reminder for ser­mons — there are times that all the data in the world will lack the impact of a sin­gle com­pelling sto­ry.

The researcher Thomas Aste­bro has shown that returns on inde­pen­dent inven­tions (you take the ceme­tery into account) are far low­er than those on ven­ture cap­i­tal. Some blind­ness to the odds… is nec­es­sary for entre­pre­neurs to func­tion. The ven­ture cap­i­tal­ist is the one who gets the shekels. The econ­o­mist William Bau­mol calls this “a touch of mad­ness.” This may indeed apply to all con­cen­trat­ed busi­ness­es: when you look at the empir­i­cal record, you not only see that ven­ture cap­i­tal­ists do bet­ter than entre­pre­neurs, but pub­lish­ers do bet­ter than writ­ers, deal­ers do bet­ter than artists, and sci­ence does bet­ter than sci­en­tists (about 50 per­cent of sci­en­tif­ic and schol­ar­ly papers, cost­ing months, some­times years of effort, are nev­er tru­ly read). Page 90

And gov­ern­ments do bet­ter than tax­pay­ers. 🙂

Pre­dic­tion, not nar­ra­tion, is the real test of our under­stand­ing of the world. Page 133

True dat.

For many peo­ple, knowl­edge has the remark­able pow­er of pro­duc­ing con­fi­dence instead of mea­sur­able apti­tude. Page 135

Trag­i­cal­ly true dat.

Show two groups of peo­ple a blur­ry image of a fire hydrant, blur­ry enough for them not to rec­og­nize what it is. For one group, increase the res­o­lu­tion slow­ly, in ten steps. For the sec­ond, do it faster, in five steps. Stop at a point were both groups have pre­sent­ed an iden­ti­cal image and ask each of them to iden­ti­fy what they see. The mem­bers of the group that saw few­er inter­me­di­ate steps are like­ly to rec­og­nize the hydrant much quick­er. Moral? The more infor­ma­tion you give some­one, the more hypothe­ses they will for­mu­late along the way, and the worse-off they will be. They see more ran­dom noise and mis­take it for infor­ma­tion. Page 144

Com­bine that with this next one…

…in anoth­er telling exper­i­ment, the psy­chol­o­gist Paul Slovic asked book­mak­ers to select from eighty-eight vari­ables in past horse races those that they found use­ful in com­put­ing the odds. These vari­ables includ­ed all man­ner of sta­tis­ti­cal infor­ma­tion about past per­for­mances. The book­mark­ers were giv­en the ten most use­ful vari­ables, then asked to pre­dict the out­comes of races. Then they were giv­en ten more and asked to pre­dict again. The increase in the infor­ma­tion set did not lead to an increase in their accu­ra­cy; their con­fi­dence in their choic­es, on the oth­er hand, went up marked­ly. Infor­ma­tion proved to be tox­ic. Page 145

So if you’re addict­ed to sta­tis­tics, lay off! Espe­cial­ly if you’re track­ing every nuance of your week­ly atten­dance or the hour-by-hour views of your most recent Face­book ad.

Eco­nom­ics is the most insu­lar of fields; it is the one that quotes least from out­side itself! Page 155

I did­n’t see a foot­note for this claim, but it amus­es me to believe that it’s true.

Researchers have test­ed how stu­dents esti­mate the time need­ed to com­plete their projects. In one rep­re­sen­ta­tive test, they broke a group into two vari­eties, opti­mistic and pes­simistic. Opti­mistic stu­dents promised twen­ty-six days; the pes­simistic ones forty-sev­en days. The aver­age actu­al time to com­ple­tion turned out to be fifty-six days. Page 157

Read it and weep, stu­dents. Read it and weep.

[Unlike bio­log­i­cal vari­ables such as age, human ven­tures exhib­it a total­ly dif­fer­ent sched­ule] Let’s say a project is expect­ed to ter­mi­nate in 79 days…. On the 79th day, if the project is not fin­ished, it will be expect­ed to take anoth­er 25 days to com­plete. But on the 90th day, if the project is still not com­plet­ed, it should have about 58 days to go. On the 100th, it will have 89 days to go. On the 119th, it should have an extra 149 days. On day 600, if the project is not done, you will be expect­ed to need an extra 1,590 days. As you see, the longer you wait, the longer you will be expect­ed to wait. Page 159

Eep. Based on this log­ic, my office will be final­ly and ful­ly cleaned some­time around 3,000 A.D.

At New York’s JFK air­port you can find gigan­tic news­stands with walls full of mag­a­zines. They are usu­al­ly manned by a very polite fam­i­ly from the Indi­an sub­con­ti­nent (just the par­ents; the chil­dren are in med­ical school). These walls present you with the entire cor­pus of what an “informed” per­son needs in order “to know what is going on.” I won­der how long it would take to read every sin­gle one of these mag­a­zines, exclud­ing the fish­ing and motor­cy­cle peri­od­i­cals (but includ­ing the gos­sip magazines—you might as well have some fun). Half a life­time? An entire life­time?
Sad­ly, all this knowl­edge would not help the read­er to fore­cast what is to hap­pen tomor­row. Actu­al­ly, it might decrease his abil­i­ty to fore­cast. Page 163–164

He not only knocks news­pa­pers, he knocks mag­a­zines as well. What’s next, blogs? 🙂

In 1965 two radio astronomers at Bell Labs in New Jer­sey who were mount­ing a large anten­na were both­ered by a back­ground noise, a hiss, like the sta­t­ic that you hear when you have bad recep­tion. The noise could not be eradicated—even after they cleaned the bird excre­ment out of the dish, since they were con­vinced that bird poop was behind the noise. It took a while for them to fig­ure out that what they were hear­ing was the trace of the birth of the uni­verse, the cos­mic back­ground microwave radi­a­tion. Page 168

They made an impor­tant dis­cov­ery about the very nature of the uni­verse while look­ing for bird poop! Don’t wait for the great moment. The event (con­ver­sa­tion, ser­mon, insight) that changes your min­istry for­ev­er will like­ly come at the most unex­pect­ed moment, and it prob­a­bly won’t hap­pen in the lime­light. Get out there and clean some bird poop, and be atten­tive to your sur­round­ings while you do it.

[How hard can long-range pre­dic­tion be?] I use the exam­ple as com­put­ed by the math­e­mati­cian Michael Berry. If you know a set of basic para­me­ters con­cern­ing [a bil­liard] ball at rest, can com­pute the resis­tance of the table (quite ele­men­tary), and can gauge the strength of the impact, then it is rather easy to pre­dict what would hap­pen at the first hit. The sec­ond impact becomes more com­pli­cat­ed, but pos­si­ble; you need to be more care­ful about your knowl­edge of the ini­tial states, and more pre­ci­sion is called for. The prob­lem is that to cor­rect­ly com­pute the ninth impact, you need to take into account the grav­i­ta­tion­al pull of some­one stand­ing next to the table (mod­est­ly, Berry’s com­pu­ta­tions use a weight of less than 150 pounds). And to com­pute the fifty-sixth impact, every sin­gle ele­men­tary par­ti­cle in the uni­verse needs to be present in your assump­tions! An elec­tron at the edge of the uni­verse, sep­a­rat­ed from us by 10 bil­lion light-years, must fig­ure in the cal­cu­la­tions, since it exerts a mean­ing­ful effect on the out­come…. Note that this bil­liard-ball sto­ry assumes a plain and sim­ple world; it does not even take into account these crazy social mat­ters pos­si­bly endowed with free will. Page 178

Wow. Wow back­wards.

We are made to fol­low lead­ers who can gath­er peo­ple togeth­er because the advan­tages of being in groups trump the dis­ad­van­tages of being alone. It has been more prof­itable for us to bind togeth­er in the wrong direc­tion than to be alone in the right one. Those who have fol­lowed the assertive idiot rather than the intro­spec­tive wise per­son have passed us some of their genes. Page 192

And this is why char­ac­ter and doc­trine are always more impor­tant when screen­ing min­istry can­di­dates than lead­er­ship apti­tude. Assertive idiots lead peo­ple into spir­i­tu­al dis­as­ter.

Peo­ple are often ashamed of loss­es, so they engage in strate­gies that pro­duce very lit­tle volatil­i­ty but con­tain the risk of a large loss—like col­lect­ing nick­els in front of steam­rollers. Page 204

I can total­ly see myself being talk­ing into doing that. What a vivid image.

Many peo­ple do not real­ize that they are get­ting a lucky break in life when they get it. If a big pub­lish­er (or a big art deal­er or a movie exec­u­tive or a hot­shot banker or a big thinker) sug­gests an appoint­ment, can­cel any­thing you have planned: you may nev­er see such a win­dow open up again. I am some­times shocked at how lit­tle peo­ple real­ize that these oppor­tu­ni­ties do not grow on trees. Col­lect as many free non­lot­tery tick­ets (those with open-end­ed pay­offs) as you can, and, once they start pay­ing off, do not dis­card them. Work hard, not in grunt work, but in chas­ing such oppor­tu­ni­ties and max­i­miz­ing expo­sure to them. This makes liv­ing in big cities invalu­able because you increase the odds of serendip­i­tous encounters—you gain expo­sure to the enve­lope of serendip­i­ty. The idea of set­tling in a rur­al area on grounds that one has good com­mu­ni­ca­tions “in the age of the Inter­net” tun­nels out of such sources of pos­i­tive uncer­tain­ty. Diplo­mats under­stand that very well: casu­al chance dis­cus­sions at cock­tail par­ties usu­al­ly lead to big breakthroughs—not dry cor­re­spon­dence or tele­phone con­ver­sa­tions. Go to par­ties! If you’re a sci­en­tist, you will chance upon a remark that might spark new research. Page 209

Of such things are des­tinies made.

We can have a clear idea of the con­se­quences of an event, even if we do not know how like­ly it is to occur. I don’t know the odds of an earth­quake, but I can imag­ine how San Fran­cis­co might be affect­ed by one. This idea that in order to make a deci­sion you need to focus on the con­se­quences (which you can know) rather than the prob­a­bil­i­ty (which you can’t know) is the cen­tral idea of uncer­tain­ty. Much of my life is based on it.

You can build an over­all the­o­ry of deci­sion-mak­ing on this idea. All you have to do is mit­i­gate the con­se­quences. As I said, if my port­fo­lio is exposed to a mar­ket crash, the odds of which I can’t com­pute, all I have to do is buy insur­ance, or get out and invest the amounts I am not will­ing to ever lose in less risky secu­ri­ties. Page 211

The results of an earth­quake in San Fran­cis­co — bad. Prob­a­bil­i­ty — unac­cept­ably high. Tick, tick, tick…

I said ear­li­er that ran­dom­ness is bad, but it is not always so. Luck is far more egal­i­tar­i­an than even intel­li­gence. If peo­ple were reward­ed strict­ly accord­ing to their abil­i­ties, things would still be unfair—people don’t choose their abil­i­ties. Ran­dom­ness has the ben­e­fi­cial effect of reshuf­fling society’s cards, knock­ing down the big guy. Page 232

The race is not always to the swift, and this is by design.

Now why am I call­ing this busi­ness Madel­brot­ian, or frac­tal, ran­dom­ness? Every sin­gle bit and piece of this puz­zle has been pre­vi­ous­ly men­tioned by some­one else, such as Pare­to, Yule, and Zipf, but it was Man­del­brot who a) con­nect­ed the dots, b) linked ran­dom­ness to geom­e­try (and a spe­cial brand at that), and c) took the sub­ject to its nat­ur­al con­clu­sion. Indeed many math­e­mati­cians are famous today part­ly because he dug out their works to back up his claims—the strat­e­gy I am fol­low­ing here in this book. “I had to invent my pre­de­ces­sors, so peo­ple take me seri­ous­ly,” [Man­del­brot] once told me, and he used the cred­i­bil­i­ty of big guns as a rhetor­i­cal device. One can almost always fer­ret out pre­de­ces­sors for any thought. You can always find some­one who worked on a part of your argu­ment and use his con­tri­bu­tion as your back­up. Page 256

Ph.D. can­di­dates take note. There are worse peo­ple to emu­late than Man­del­brot.

The degen­er­a­tion of philo­soph­i­cal schools in its turn is the con­se­quence of the mis­tak­en belief that one can phi­los­o­phize with­out hav­ing been com­pelled to phi­los­o­phize by prob­lems out­side phi­los­o­phy…. Gen­uine philo­soph­i­cal prob­lems are always root­ed out­side phi­los­o­phy and they die if these roots decay…. These roots are eas­i­ly for­got­ten by philoso­phers who “study” phi­los­o­phy instead of being forced into phi­los­o­phy by the pres­sure of non­philo­soph­i­cal prob­lems.
He foot­notes Karl Pop­per, Con­jec­tures and Refu­ta­tions, pages 95–97.

And the­ol­o­gy that is divorced from dai­ly min­istry gets wonky. All the great­est the­olo­gians in the his­to­ry of the church have been involved in reg­u­lar min­istry to nor­mal peo­ple.

I am most often irri­tat­ed by those who attack the bish­op but some­one fall for the secu­ri­ties analyst—those who exer­cise their skep­ti­cism against reli­gion but not against econ­o­mists, social sci­en­tists, and pho­ny sta­tis­ti­cians. Using the con­fir­ma­tion bias, peo­ple will tell you that reli­gion was hor­ri­ble for mankind by count­ing deaths from the Inqui­si­tion and var­i­ous reli­gious wars. But they will not show you how many peo­ple were killed by nation­al­ism, social sci­ence, and polit­i­cal the­o­ry under Stal­in­ism or dur­ing the Viet­nam War. Even priests don’t go to bish­ops when they feel ill: their first stop is the doctor’s. But we stop by the offices of many pseu­do-sci­en­tists and “experts” with­out alter­na­tive. We no longer believe in papal infal­li­bil­i­ty; we seem to believe in the infal­li­bil­i­ty of the Nobel…. Page 291

Rare to read such clear think­ing about this in a book not devot­ed to apolo­get­ics. Of course, Taleb has it in for the Nobel.

Imag­ine a speck of dust next to a plan­et a bil­lion times the size of earth. The speck of dust rep­re­sents the odds in favor of your being born; the huge plan­et would be the odds against it. So stop sweat­ing the small stuff. Don’t be like the ingrate who got a cas­tle as a present and wor­ried about the mildew in the bath­room. Page 298

Indeed. I like a book that clos­es with a call to grat­i­tude, even if it’s unclear to whom your grat­i­tude should be direct­ed.

A fun read. Rec­om­mend­ed.

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