I suck with women

Its always been a problem. I’m terrible with women. I was watching Vikings and one of the characters basically says to a woman he is attempting to seduce: “I have never had any luck with women…so why would you be any different”. I completely identified with this statement.

I’ve had a few problems in my life that I have solved. How to invest…solved problem. How to work towards goals through habits…solved problem. How to be a genius…can’t say I’ve solved it but I’m pretty sure I’m very close. But women…I’m not even sure how or where to start.

There is the dating advice…that is garbage. There is the PUA advice and that too is garbage. So what do you do? Not really sure what works. Whatever does work has to be nearly opposite to whatever it is that I’m doing. There are things though that I do believe:

You Must Leave the House

Its quite possible that there are men (e.g. Hugh Hefner) who have managed to meet gorgeous women without ever leaving their houses but I think in the overwhelming majority of cases you will not meet a women at home. I would argue that you probability of meeting a woman is directly proportional to the amount of time you spent not at home.

If possible be with Friends and even better friends more social than you are

I would argue that your probability of meeting a woman is somewhat a multilinear function of two variables: amount of time spent outside of the house, the number of friends you are with when you aren’t at home. For example, if you got out alone your probability of meeting someone is x. If you were to got out twice as much but still alone your probability is 2x. But another way to get to, 2x, is to just go out with a friend instead of going out alone twice as much. The reason is that you will meet twice as many people with a friend there since you meet all the people you will meet, as well as the people your friend will meet. If you have two friends that makes things even better.

Obviously this only works if your friends don’t hang around you the whole night. So go out with friends that are socially bold. They will tend to meet more people that you will and you will get introduced to those people

Have lots of friends

Cold approach is rarely successful in my view. This implies warm approach is preferred. But there is only really one way to approach warmly and that is to be introduced by someone you already know. Hence friends are important. The more friends, the better since there is no other way for you to warmly approach other people.

The above are things I’m pretty sure are true. But I have some more speculative ideas:

Your a stranger the first time you meet…but after some time goes by you are someone she knows

The first time you meet a woman you are a stranger. Don’t expect her to be nice to you and feel free to treat her the way you would treat any of you guy friends. She is nothing special. But something really weird happens after time passes. People think they “know” you. You aren’t a stranger anymore. So you might work with someone 8 hours a day for two weeks. They treat you like a stranger. Despite the fact that you have spend 80 hours together.

But meet her once for a few hours. And then a few days later for a few hours. And then a month later for a few hours. And then a year later for a few hours. And then 2 years later for a few hours more. And now you are suddenly this guy “she knows”. You aren’t a stranger. Why?

Because time has gone by and somehow that makes a difference. Even though in total duration terms you haven’t spent a great deal of time with her. She know feels she knows you because she has known of you for a few years…not two weeks. Thus initial meetings are often completely unimportant. And there are tonnes of stories you will hear of people who met and thought nothing of each other initially and then years later they somehow connected.

Stand out and be a little Bold

My friend told me a story. He as in a class and he was bored. He had this remote controlled car and he realized that if he drove the car with a banana on it and attached to a string on the roof of the school, the car would stop as it hit the edge of the roof and the banana would fly off due to inertia through the air. Since it was attached to a string the banana would curve down in an arc and if you calculated just right he could get the banana to go through the open window of the class.

So he left a car on the roof of his school with a few bananas on it. It was a hot day and the car and bananas were in the sun for a while. When he got to the class he decided to try his trick and he expected a few bananas would come through the window of the school.

Now at the point he did this the whole class was really bored and the teacher was in the middle of some boring talk and everyone was kind of zoned out. What ended up happening was that the bananas very suddenly came through the window as the teacher was talking and kind of just exploded everywhere. It was a mess much bigger than the student anticipated and it was really sudden.

After that moment my friend was super popular. Everyone liked him … even the teacher. And of course girls liked him.

Of course this only works in closed bubbles. How to do it in other environments is a good question. But the fact remains, if you do something a little different and you are bold…you can often gain a great deal of popularity.

How to be a genius

There are various articles on this if you scour the internet but they are all really shitty. Mine won’t be. Partly this article is because I might soon decide to be a genius. I’m not really sure yet whether its worth it.

I’ve met geniuses and here is what I know:

Think A Lot and Think Hard

There is one guy I met who was smarter than me and I knew it. I was sure of it. So the question is how was the guy so smart. Its a question I frequently asked. What I realized is that he that about thinks a lot more than other people and he thought hard. Real hard.

Most people are capable of thinking hard but they simply don’t do it. Its really difficult to do it. It requires energy and most people are really really lazy.

I could pretty much end the whole article here and it would be tremendously valuable as a piece of genius advice. But I won’t.

Most people at this point are probably reading it and thinking, well that is just stupid. What do you mean think hard? What am I supposed to think about? What does it even mean to think hard? ABOUT WHAT? HOW?

Well lets go meta. Lets think hard about thinking hard. Its pretty difficult for me to see how one could become a genius in some particular field by thinking hard unless they were thinking hard about the field itself. Obviously you could not become a genius at math by thinking about unicorns. So the first element is to think about the subject itself. There is another thing…notice that when we even began this thing of thinking hard about thinking hard we started with something. We started with questions! So the first element of thinking hard is asking questions. Could I think hard without asking a question? The previous statement is an interesting one because I believe the answer is no but I can’t think of a reason why and indeed the previous statement itself about questionless thinking hard had to be formulated as a question. Which kind of indicates how difficult questionless thinking hard is.

Will any question do? Obviously not because we could spend the whole day asking the same question over and over again and it could be a very easy question. For instance we could ask the question: what does 1 + 1 equal? Obviously that won’t get us very far. So we have to start asking harder questions. So obviously we have to start asking questions that don’t have easy answers.

Now comes an important insight….the questions we ask are vitally important to thinking hard. If the questions I ask are too simple and have ready answers I won’t get very far. This is the reason most of are lazy thinkers…we ask ourselves questions where we have ready answers because ready answers are comfortable and easy. The life of a hard thinker is not an easy one because they must always be asking questions that don’t have easy answers. The best example of easy thinking I can think of is in politics where people mindlessly argue without any thought at all and indeed enjoy it. The road here is paved with stupidity.

Is asking hard questions with very difficult answers sufficient. Well lets say I asked myself the question What is the meaning of life? Its kind of a squishy mushy question. Somehow in the previous paragraphs we were able to make some kind of progress with our questions.  When faced with a question like: What is the meaning of life?We are stuck. The problem with this question is that its too broad and undefined. What is meaning? Is it purpose. Is there only one meaning or many. So very hard questions tend to generate subsidiary questions which are more specific and easier to answer. So maybe very hard questions are sufficient in that even when they are mushy they inevitably result in clarifying questions. However I suspect the real meat of genius lies not in the mushy questions but in the clarifying ones.

Thus we could say part 1 of genius is to ask very hard questions and try to answer them.

Anyways the above gives you some flavour of what hard thinking looks like. In math and science its a bit different. Its also situation where the number of questions and question methods is not infinite. So we could catalog the various question techniques and come up with the sorts of questions you would ask yourself. Anyways the moral of this story is that a huge component of being a genius is asking yourself questions. In a further blog post I will go into more depth on how to ask hard questions and how to answer them. And also how to ask the right questions.

Think Very Very Very Very Very Very Slowly

This is an Einsteinian technique. Its not exactly the same as thinking hard and it doesn’t apply to all problems. But when you have certain very fundamental problems in a field and you need to question bedrock assumptions this is really the only technique you can use. You think really slowly. Now I could and should stop here. Because really I’ve given you all you need.

Probably again at this point you like WTF man? Think slowly! WTF does that even mean. Well here is where you should apply my first technique, Think Hard ,to my second technique: Think Slowly and if you try to think hard about thinking slowly you will end up figuring out what it means.

Lets consider what thinking slowly means. The opposite of thinking slowly is thinking quickly. Coming to snap judgement and quick decisions. For instance I see a woman walking and holding a child’s hand. I quickly assume its the child’s mother or some close relation. I have thought quickly. Quick thinking is fast and cheap and its usually right.

But its not always good enough. Now what are the hallmarks of thinking quickly: associations and assumptions based either on past experience or what society believes. I see the woman walking with the child and since most women walking with children I have seen in the past are mothers…I think well that is the child’s mother. ACTUALLY THAT PREVIOUS STATEMENT IS BIG FAT LIE. Or maybe I should say I thought too fast about thinking fast and it doing so made a mistake. The truth is that I have never asked any woman walking with a child hand in hand whether its the child’s mother. So then where did I get this idea?

Probably my associations of children as mostly being taken care of by their mothers. So a big part of thinking slowly is questions assumptions. Thinking slowly involves a slow reconstruction of ideas by examining carefully the basis for them in society and our experiences and then determining whether other possibilities might work.

It takes time because each idea is itself built on ideas and these ideas are in turn built on things and so it goes in a complicated web of association. Painstakingly examining each of the associations and assumptions, in turn, takes time and effort, and there is the obvious question of how far to go back. After all if I want to make progress I cannot keep questioning. I have to accept something basic otherwise I will be stuck in infinite regress.

Other Stuff

This article is like my other ones. There is too much to say and I don’t have the space or time to complete it. But what I will do is basically outline the techniques and elements I see involved in genius:

1) Problems, problems, problems. You need to spend as much time as possible solving problems or doing whatever it is that the field involves. In investing it would be searching for and analyzing companies. In physics it would be solving problems.

2) Read read read. Read as much as you can. Research papers, books etc

3) Know the history of the ideas on the field. How did the field start? What were the ideas people had in the past. How did those change? What type of arguments did they make. In other words what led to the field its present state. This is pretty important. You should also try to learn some historical techniques other people used that may now be out of fashion

4)  What are the current sore spots in the field. Usually in any field there are some areas which are hot spots and where there are some problems emerging in the field. Things aren’t quite right. Something is wrong. In physics at the turn of the century the sore spots were Maxwell’s theory which didn’t appear compatible with Galilean relativity without a mysterious ether which was not observable. The other sore spot was thermodynamics and atomic theory where classical methods could not explain what was being observed for blackbody radiation or why the electrons did not spiral into atomic nuclei. Obviously the genius should focus his efforts in these areas…he should avoid any area where standard ideas are working and where people are already making good progress and where there is a lot of competition.

5) Mental habits. A few examples:

      a) Think hard

      b) Do Fermi problems to acquire numerical intuition. I also highly recommend the book Street Fighting Mathematics. You need to approximate and guess at answers

       c) Related to b) you should try to guess the answer to problems before you work out the solution in detail. Your guessing methods should have various levels of power. In other words you should be able to come up with a very quick guess which provides an order of magnitude estimate but then if given more time you should be able to refine your guess to a better answer

     d) Avoid looking at solutions to problems and struggle but in a calculated way. This is kind of contradictory. What I mean is that if you are solving a problem never look at someone else or the “official solution” until you have worked out your own. A certain amount of struggle is good. But I said its calculated struggle and that brings us to

      e) If you are not making progress on a problem stop working on it and come back to it later. Its important to struggle sufficiently that your mind is aware of the problem and has spent some time with it. But you should avoid the problem for a while and come back to it. Its not exactly clear why this works but it does. Poincare did it. Maxwell did it. Its very useful. Somehow your mind is able to make progress later on that it could not make at the time. 

Political power is not the same as Economic power

You have essentially two schools of thought in the Black community: those who believe economic power leads to political power and those who believe political power leads to economic power.

Politics First

The politics first group are liberals like Yvette Carnell, Ta-Neshi Coates, Dr. Martin Luther King,, Bayard Rustin etc.

The politics first has various supporting ideas that are necessary for the ideology to make sense. The first idea is the futility of black self-help and black people solving any of their problems on their own by changing their culture or behaviour. The idea here is that black people are not at fault for what has happened to them. Its the fault of White Supremacy, the government etc. And the only thing black people can do is to demand reparations, more resources for schools, healthcare etc. And that this will solve all their problems including the economic ones. By necessity this strategy depends completely on White people helping Black people. A good example of this can be found here.

Economics First

The economics first people believe that to get political power you must first get economic power. Here you have people like Dr. Claude Anderson, Malcolm X, Book T Washington. This group believes that Black people will get ahead politically through their economic power.

Associated with this group are ideas like improving black culture, strengthening the Black family, using Black spending power. This strategy does depend on White people….its black self-empowerment. In the modern era, the biggest argument of this group is that Black use their spending power to develop economically by patronizing Black businesses. A great example of this ideology can be found here

Both groups are completely and absolutely wrong. Political and economic power are not the same. The strategies to pursue them are very very different. They accomplish completely different goals. And one does not lead to the other.

The best way to demonstrate this is to point out the many groups that have very little political power but incredible economic power. For instance, the Chinese immigrants to countries like Malaysia, Indonesia, Thailand and the Phillipines. And of course on the other side the natives of these countries who have enormous political power but little economic power.

The Chinese control something like 70% of the wealth in countries like Malaysia, Phillipines, Indonesia and Thailand. But they have very little political power. There are all kinds of laws and restrictions on them in each country, there are affirmative action programs that hurt them, a lot of preferential treatment for the natives etc. Yet still the Chinese have all the economic power.

One has to ask how is it that in 4 totally different countries with different cultures and circumstances a bunch of penniless Chinese immigrants managed to come in and dominate the economy? The phenomenon is not unusual. The Indians for instance were 1 percent of the population and controlled 90% of the wealth in Uganda before they will kicked out.

The prototypical example of this are the Jews of Europe…especially Eastern Europe. There are stories of the Jews getting kicked out of countries because people despised them and then later getting re-invited because the economy had turned to shit after they left. This exactly parallels the story of the Indians in Uganda. They have been re-invited back into Uganda because the Uganda economy turned to shit after they left and its estimated that currently they already control 30-40% of the wealth of the country despite being much less than 1% of the population and having had all their wealth stolen.

Its obvious that whatever the Chinese and Indians are doing is resulting in tremendous economic power but without any corresponding political power. And its also straightforwardly obvious that there is something in the strategies that these groups pursue that enables them to succeed economically even in the face of tremendous government obstacles.

What black people need to move forward

I just heard this phrase on this video, Breaking Brown. I have been thinking about it a lot.

Black people have failed in the US. Its pretty clear. And they will keep failing. My view is that things will get much much much much worse before they get better. The first problem is that black people are stupid. Their strategies are idiotic. Breaking Brown is a little smarter than the rest. But its still fucking dead stupid. I’m not sure why. But I do know how people learn. They learn through bitter pain. Black people aren’t feeling enough pain for them to learn. I don’t know why black people insist on learning things the hard way but your going to learn….oh yeah your going to learn.

How do people succeed? How do immigrants succeed. Its strange to me how little most black people have studied this issue. To the extent they have their ideas are just pure idiocy. Lets start with some idiotic Black myths:

Spending Power

The basic idea here is that black people will move forward economically by using their spending power internally within the black community. The fallacy here is that you get rich by spending money. Nobody gets rich by spending money. You get rich by NOT SPENDING MONEY. Again go to the successful people. The white rich capitalists of yesteryear that came up from nothing. The Carnegies, the Rockerfellers. They were basically cheap as fuck. At that time being cheap was considered a virtue and spending money was believed to be immoral.

This belief in Black spending power has been reinforced by observing immigrants. I remember in high school a black kid talking about how the Chinese came up by spending all their money internally. The idea is that immigrants succeeded because they spent all their money inside stores of their own ethnic group. Its all bullshit of course.

Any immigrant coming to a new country has big freaking problems. The don’t speak the language, they don’t know anyone and no one will hire them. So what do they do. Well they hang out with other people in the same situation…other immigrants. And so you get these ethnic enclaves. Those people are usually poor as fuck and they work in sweat shop conditions. The idea that this is some grand fucking strategy is total bullshit. Its a strategy of desperation.

That is why immigrants always stress education. Its their ticket into the society. The second generation Chinese are all actuaries, engineers, and accountants. That is the real way they join the American mainstream. Chinese do the same stupid thing everywhere they go: send the kids to summer school to learn math, turn them into engineers, doctors etc. Everywhere they go they are in the same freaking professions. Its a boring uninspired strategy but it works well. Certainly its light years ahead of what black people are doing.

More Resources

The spending power myth comes from those who believe black people have to help themselves. The more resources myth comes from black people have to get help from society. The basic idea is that black people don’t succeed because they were never provided the resources to succeed in the form of inheritances or government spending on education, health etc. Again mostly this is bullshit.

Black education is not bad because of insufficient resources. In the past schools serving black kids were far far better and had far fewer resources. A good example of this well explored by Thomas Sowell was Dunbar highschool. The school from the 1900-1950’s had very poor resources: insufficient textbooks, cracked chalkboards and broken boiler room. But Dunbar graduated something like a quarter of all Black Phds. Its graduates went on to become ambassadors, judges, generals.

How did they do it? Its really straightforward: high uncompromising standards, selectivity in their choice of students, smart well-trained faculty. Already Eva Moskowitz has basically reproduced this achievement in the modern era with her Success Academy which serves predominantly black kids. How much you want to bet black activists are actively trying to shut these schools down. Because they are…I’m looking at you Yvette Carnell. Dunbar incidentally wasn’t beloved by the black community and they had a large role in destroying it.

Its incredibly strange. In no other community would people try to shut down successful schools. Again as I said black people are stupid. Including Yvette Carnell. Why anyone would oppose Charter schools that are the only ones able to achieve anything is ridiculous.

So what what I tell black people to do?

1) Get your kids a good education, preferably at a no excuses type high discipline, high expectations school

2) For higher education choose a lucrative in demand profession

3) Save your fucking money. SAVE YOUR FUCKING MONEY!!! SAVE YOUR MONEY. How? Live with your parents. Hell your parent should live with their parents and you should live with them. Aim for a savings rate of 50% minimum. People think this is crazy but immigrants do it without trying. Black always compare themselves to white people and think they are saving because they are saving a little bit more than white people. BUT THAT ISNT FUCKING GOOD ENOUGH. White people are crazy. Saving like them is crazy. You aught to be saving way way way way way more.

Buy cars and last them for 20 years. My mom used to drive a car in winter with a hole in the bottom of the car which she covered with carpet.

4) ADVANCED – Invest your money..preferably in SP500 Index funds

5) Get married and stay married. Related to this are the government policies of welfare and minimum wages which have enabled single motherhood and increased black unemployment which has led to lower rates of marriage.

Are there things government could be doing? Sure. End the drug war. End the welfare state. Eliminate the minimum wage. Eliminate labour laws including child labour laws. Eliminate licensing laws. Basically make it really easy for unskilled people to get jobs, stay out of jail and get married. Basically the situation we had 100 years ago.

Human beings are born actors

When I was in elementary school I remember an incident where a bunch of boys approached me demanding to know whether I had stolen some girls ring. Supposedly some kid have give a girl a ring fashioned out of mud I guess and someone had taken it. So these kids where going around demanding to  know about that ring.

The kids were immensely serious about the whole thing. And I just looked at it as ridiculous. In my head at the time I realized that the kids were pretending to give out rings, pretending to protect their girls honor…it was obviously all a lie. The rings were worthless, the girl wasn’t someone they had strong feelings for. It was all one big act. But I was still a little shocked at how intensely seriously the kids seemed to take the whole thing.

I remember another incident where a kid was saying how hot he found this girl Sandy. Sandy was fat and not particularly attractive. He was performing to fit in and to show he understood the game. But all the feelings were fake. It was completely obvious to me. He found Sandy hot because according to our little society at the time she was hot. She had to be hot because all cool people were hot and Sandy was cool.

Human psychology is complicated. People think its just about actions and rationality. Or at least this his how we commonly think of humans. But there is also this complicated kind of act that human beings continuously put on to signal things to other people. People are constantly imaging what other people would think if they were observing them and they moderate their behaviour accordingly. This can get very complicated.

I think the best example I can think of come from Dostoevsky in the Brother Karamazov:

I need only tell you that she sent for me a month ago, gave me three thousand roubles to send off to her sister and another relation in Moscow…When I’d just come to love another, her, she’s sitting down below now, Grushenka. I carried her off here to Mokroe then, and wasted here in two days half that damned three thousand, but the other half I kept on me. Well, I’ve kept that other half, that fifteen hundred, like a locket round my neck, but yesterday I undid it, and spent it. …

It’s not the fifteen hundred that’s the disgrace, but that I put it apart from the rest of the three thousand,’ said Mitya firmly. ‘

Why?’ smiled the prosecutor irritably. ‘What is there disgraceful, to your thinking, in your having set aside half of the three thousand you had discreditably, if you prefer, ‘disgracefully,’ appropriated? Your taking the three thousand is more important than what you did with it.

‘I wonder at you. But I’ll make it clearer. Perhaps it really is incomprehensible. You see, attend to what I say. I appropriate three thousand entrusted to my honour; I spend it on a spree, say I spend it all, and next morning I go to her and say, ‘Katya, I’ve done wrong, I’ve squandered your three thousand’; well, is that right? No, it’s not right — it’s dishonest and cowardly; I’m a beast, with no more self-control than a beast, that’s so, isn’t it? But still I’m not a thief? Not a downright thief, you’ll admit! I squandered it, but I didn’t steal it.

He was always pestering Agrafena and I was jealous; I thought then that she was hesitating between me and him. So I kept thinking everyday, suppose she were to make up her mind all of a sudden, suppose she were to leave off tormenting me, and were suddenly to say to me, ‘I love you, not him; take me to the other end of the world.’ And I’d only forty copecks; how could I take her away, what could I do? Why, I’d be lost. You see, I didn’t know her then, I didn’t understand her, I thought she wanted money, and that she wouldn’t forgive my poverty. And so I fiendishly counted out the half of that three thousand, sewed it up, calculating on it, sewed it up before I was drunk, and after I had sewn it up, I went off to get drunk on the rest. Yes, that was base.

Why, that I stole it, that’s what it amounts to! Oh, God, you horrify me by not understanding! Every day that I had that fifteen hundred sewn up round my neck, every day and every hour I said to myself, ‘You’re a thief! you’re a thief!’…But, do you know, while I carried it I said to myself at the same time every  hour ‘No, Dmitri Fyodorovitch, you may yet not be a thief.’ Why? Because I might go next day and pay back that fifteen hundred to Katya. And only yesterday I made up my mind to tear my amulet off my neck, on my way from Fenya’s to Perhotin. I hadn’t been able till that moment to bring myself to it. And it was only when I tore it off that I became a downright thief, a thief and a dishonest man for the rest of my life. Why? Because, with that I destroyed, too, my dream of going to Katya and saying, ‘I’m a scoundrel, but not a thief! Do you understand now? Do you understand?’

The funny part about this is that Dmitri Fyodorovitch worried about being a thief because he didn’t spend the 3000 right away. If he had spent it recklessly he could consider himself just an animal with no self-control. But because he was calculated and kept 1500 away for later use in seducing Agrafena…he was no longer an animal…he was a thief. The motivation of his actions, the reasons made all the difference. And to his mind how other people would judge those motivations mattered.  All this tremendously effected his state of mind. This sort of thing makes no sense if you think of humans as rational, self-interested actors.

Human being constantly act to signal to others who they are. And feel things like guilt or shame about their behaviour based on thinking about how others would judge them if they were being observed.

This makes human psychology complicated. Spending 3000…reckless but you are not a thief. Saving 1500 of the 3000 for later use is calculating and turns you from a reckless animal into a thief. You truly understand human psychology until you first understand this type of reasoning.

I don’t know what I’m doing

Buffett has stated that

Diversification is protection against ignorance. It makes little sense if you know what you are doing

A logical implication of this: if you are sensible and you diversify, you must not know what you are doing. I personally embrace that concept. I believe, when it comes to investing, I do not know what I’m doing.

What brought this home for me was this mistake: http://valueninja.ca/2017/01/28/amaya-my-greatest-mistake/

As Dirty Harry says:

This is ultimately what turned me on to net-net investing. If you don’t know what you are doing the logical thing is to find a diversified strategy with excellent returns that a 10 year old could implement. And that is what net-net investing is.

Net net investing is a negative art

In Security Analysis Graham writes:

Since the chief emphasis must be placed on avoidance of loss, bond selection is primarily a negative art. It is a process of exclusion and rejection, rather than of search and acceptance

My view of net-nets is similar to Graham’s view of bonds. The net-net investor, presuming he has screened out non-net nets, has already extracted the primary positive signal of good returns, namely low NCAV relative to market cap. Other qualities typically associated with good stocks: dividend, continuous record of positive earnings have not been shown to improve net-net returns.

And so the art of the net-net investor is primarily a negative one. What he should be doing is trying to avoid scams and companies that are not “real” companies. His process is one of exclusion.

Geoff Gannon has an excellent article on this which explains the general sort of things in investor should be on the look out for:

http://www.gannononinvesting.com/blog/why-i-dont-invest-in-chinese-stocks.html

In my process there are a few practical guidelines I have found. In general you should avoid:

1) All Chinese reverse mergers and avoid HK listed stocks. Avoid all companies domiciled in China or with operations primarily in China

2) Companies having an abnormally large number of subsidiaries. See here for examples.

3) Companies which have increase share outstanding by more than 10% in the last 12 months

4) Companies that are looking to raise more capital either in the form of debt or equity

5) Companies which have gone or are in the process of going dark

6) Companies which discuss how they are trying to satisfy creditors in their financial statements.

7) Companies who shares have been suspended from trading or are being investigated by a regulator like the SEC.

Basically with net-nets the story should be that the company is boring, out of favor, has ample liquid assets, low debt and is deeply undervalued. Anything that contradicts this story, e.g. large share issuance, should be a red flag.

What I am attempting to do with the criteria above is avoid scammers. Some of the rules above sound overbroad and arbitrary e.g. Avoid all Chinese companies. But my reason for making them is sound. In practice, the vast majority of net-nets domiciled in China are scams and so you don’t lose a great deal by excluding the whole country.

Similarly there are dark companies which make sense as investments but again you are not gaining much by including them while you are eliminating a large number of duds by excluding them. Disclosure: I do have a few dark companies I have invested in based on the blog, http://www.nonamestocks.com/.

On occasion I will use positive screening criteria as a second pass on my exclusionary criteria and so for example I might invest in a company domiciled in China provided that it issued a dividend. My reasoning here being that a scammer will never give money away. So while I would not use the positive screening criteria under normal circumstances I may use them to include a candidate I would not normally consider. Similar to how a university admission officer may include student with lower SATS if they have other positive qualities like athletic accomplishments.

How I got out of prison

Not a real prison. A metaphorical one.

These days depression is considered an illness. I don’t think of it that way. To me its an adaptive mechanism that is quite common among people because it works. Depression is there to get you to change what you are doing. To come up with something better.

Logically it makes sense. If you are doing the wrong thing the logical thing is to stop whatever you are doing. To think a lot about what is wrong. To feel bad about all of the existing things you are doing and to be a relentless critic. Essentially that is what depression does. It reorients you.

Now I’ve been depressed for a lot of my life. One outstanding thing is that I have always felt like I’m in some sort of a prison from which there is no escape. Like my work, my expectations of life, societies expectations doomed me to being a loser living an unsatisfying life.

This all came to head last year. I had worked hard in a job and done some good work. But I wasn’t rewarded for it. Instead credit was taken from me and I was put in a pretty bad position by my boss. I spent months trying to figure out what I had done wrong. Why had a failed? I kept wracking my brain. I kept hating myself. WTF, had happened…why was I always such a failure?!

Eventually I realized that I had done nothing wrong. That it was never about me. The boss had a plan and I simply wasn’t a part of it.

At this point something remarkable happened. I began for the first time ever to believe in myself. In some way this was the consequence of the depression. I had spent so much time and effort mulling over my mistakes. Yet I was still unable to figure out what I done to cause them. This gave me a very strong confidence that I was right about it not being about me.

That was step 1. Now that I believed in myself I knew I would be ok no matter what happened. So I decided to quit my job and just give myself some time that was just for me. I knew that part of my problem was that I was in a prison and I needed to escape my prison.

What I mean is that I was in a psychological prison. Every person has expectations about the future. And society has expectations. And their friends and family have expectations. You have to have a job. You must get married and have children. You must do something: travel, work….something. Otherwise you are a loser. These expectations are a prison around a person.

I knew I had to escape. I needed to psychologically feel like my life was for me. Not society. Not my parents. Not other people. Me.

That means I needed something in my life that was without external justification. Therefore I quit my job. The excuse I originally gave people was that I was going to work at a startup. But the reality is that for one year I mostly did nothing.

In the beginning I felt like shit. I was depressed. I was concerned that I wasn’t doing anything. My parents were concerned. They knew I wasn’t doing anything. They kept bothering me to meet girls, to get a job. But I refused and I was confident I was right. But still for a long long time I was depressed. It took 6 months to get used to not have a job. And it took the same amount of time for my parent to stop asking me what I was going to do.

I started doing stuff that I enjoyed. Reading science and math books. Exercising. Watching TV.

At this point something remarkable happened…my depression lifted and I was happy. I began searching for a job.

I job searched, in a way I had never done before. Before when I used to job search, I would usually be depressed, desperate and would procrastinate a lot. This time I was pretty calm, cool and enjoyed the process. I didn’t stress. I took things easy. Partly this is because I didn’t feel tremendous pressure to get a job. I have never had a easier time in my life getting a job. Most of what I did was meet people and have conversations. Or maybe email people. The outcome was a job that I barely did anything to get. And the whole thing was easy.

Since then my whole life has gotten easier and I’ve gotten happier. There is this freedom that I now have. The future has all these possibilities. But in the end it all comes down to this one decision to quit my job. A decision that made no sense to anyone. But somehow it was the smartest thing I ever did.

Gurus and Games

The Book of EST, writes about a GURU as someone who hands out problems. I would call a GURU someone who creates a GAME. Thus a boss can be considered a GURU since he creates a GAME, with its own rewards and rules. The real interesting question is why do people follow GURU’s . Why do they play the game. What is in it for them?

Thus Socrates was a Guru who created a GAME called philosophy. Isaac Newton created a game called physics. There are rules to these games. And prizes.

One of the valuable services that a GURU provides is that he organizes people together. His game provides an organization to a large number of people. This can be the case even if the game is at some level is false. For instance, God doesn’t exist so Mohammed is a false prophet. Yet its pretty undeniable to me that he created value for Arabs by organizing them together through the Game we call Islam.

The other interesting phenomenon is that people come to identify and believe in the Game. In a way this isn’t too surprising since the games require large sacrifices of time and energy. Its easier to do this if to some extent you believe in the rules of the game, its values etc.

I’ve explained how games benefit society; they organize people. But beyond that games benefit the people that play. They benefit mentally by providing a sense of purpose. In addition they benefit people materially. Guys who are good Christians marry nice hot sweet Christian girls. They are respected and liked. They gain esteem from the community.

I don’t believe in purpose

I was at my relatives life one day. He’s a born again Christian and he started trying to sell me on the idea of a purpose driven life. His purpose being to glorify God. I remember while he was saying this his daughter was twirling happily and randomly running around, laughing and jumping as children often do. I looked at her and thought to myself: WTF is her purpose? Does her life have value given that its seems a lot of what she did was purposeless fun.

The whole purpose thing is basically a story. People like to craft their lives around some reason that is bigger and larger than them. But my view is that its all made up bullshit. Maybe humans need that made up bullshit.

But I cast my lot with the child whose life has no purpose. Its just a pursuit of random happiness and joy. Beyond that as an adult my life might be devoted to crafting a space for the people I love, the things I enjoy and helping make the world a smidgeon better. And that’s it. But a larger purpose. I don’t want or need it.