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.

I’m Not An Investor

Commenter DYOW, on a Berkshire and Fairfax thread writes:

This applies to concentrated bets.  If you are diversified than i consider this closer to indexing and not investing – then i get it.
But I don’t understand how anyone can call a holding “an investment” and not look at all the filings, and at the least, go through every page of the 10K.

http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/do-you-read-all-of-the-filings-of-a-company-you-invest-in/

I thought quite a bit about this and I realized I am not an investor in the DYOW sense. And I don’t want to be. I refuse to waste my life holed up in a room reading financial statements. I have much better things to do.

But I have also come to realize that its pretty easy for a small investor to get excellent returns without doing much work. Net-nets are good example of a strategy that is highly effective and yet requires very little time and energy….certainly it does not require reading all disclosures.

In fact its an interesting question as to whether even Buffett himself needed to do the work he did to get the results he obtained. His early years were essentially deep value and in his later years he shifted to quality. I would argue that these asset allocations may have mattered a lot more than the particular stocks he picked.

How scientists come to agree on false facts

Lets say a bunch of different scientists around the world are measuring some factor X. And a bunch of different studies, using different methods come up with similar values. There is the common belief that the result must be right given the agreement between the different methods.

But this idea is false. Scientist can come to agreement even on things even if the fact is false. How does this happen? Lets say the first team to publish, Team T gets a result XT. The next team, Team U, tries their method and lets propose two counterfactual worlds. World A and World B.

In World A when Team U finishes their result is reasonably close to XT. Team U is pretty happy and publishes.

In World B, Team U’s result is very very different than  XT.  Team U is less happy and they therefore recheck the results again and again. They find some legitimate errors in their methods. They are now able to get a result less different than XT but still not in good agreement.

Now Team V enters the picture and when it does the world splits again. Again Team V is pressured to look for mistakes only when their results don’t agree with previously established ones. The more teams publish results the stronger the pressure and bias. Thus a scientific consensus is born.

A real world example of this phenomenon can be seen in a Nasa feature on the measurement of global ocean cooling by Josh Willis:

In 2006, he co-piloted a follow-up study led by John Lyman at Pacific Marine Environmental Laboratory in Seattle that updated the time series for 2003-2005. Surprisingly, the ocean seemed to have cooled

Not surprisingly, says Willis wryly, that paper got a lot of attention, not all of it the kind a scientist would appreciate. In speaking to reporters and the public, Willis described the results as a “speed bump” on the way to global warming,

…………….

Basically, I used the sea level data as a bridge to the in situ [ocean-based] data,” explains Willis, comparing them to one another figuring out where they didn’t agree. “First, I identified some new Argo floats that were giving bad data; they were too cool compared to other sources of data during the time period. It wasn’t a large number of floats, but the data were bad enough, so that when I tossed them, most of the cooling went away. But there was still a little bit, so I kept digging and digging.”

What I find amazing about this is that we have a NASA scientist admitting to throwing away data and its a feature on the NASA website. What is interesting about this is that he never bothered investigating the reason for the supposed “bad data”. And notice the one way nature of his corrections…he only threw away data that was “too cool”. And when he didn’t get agreement he kept digging and digging. This better than anything I have ever seen illustrates how scientists come to agreement on things.

Sometimes the ugly way is also the right way

In Episode 1 of Season 2 of Gotham, Bruce Wayne is trying to open a secret key code locked room his father created. He tries various combinations in vain. Finally he realizes that he can just use a bomb to blow the door open. Thus the title of this post:

Sometimes the ugly way is also the right way

As human beings we are used to living in a world of constraints and rules. And often we create these constraints ourselves. The ugly way violates our imposed constraints.

My good friend works at a place he hates. He often works from home because it would take him 2 hours to commute to the workplace. But he is unproductive at home and only does work at the last minute. As a result he is often rushing and sleeping late. This makes him too tired to search for jobs a new job.

He is stuck. He can’t leave his job because he is too tired to search. He can’t move closer to work because he knows he will soon switch jobs. And he doesn’t have the discipline to work from home.

Now I have suggested that he move closer to the job he hates. If only to give him the time he needs to search for a new job. He thinks this is stupid since he will only end up relocating once he finds a better job. He has imposed a set of constraints on himself that make his situation impossible to resolve.

I have found that some of my greatest ideas came to me because I started to questions the constraints I made up. Once I did this a solution was easy.

You get paid to do what other are unable to do

As an investor or for that matter in any situation generally you always get paid more to do what others won’t do. For instance, Michael Jordan got paid because he could play basketball in a way others were not.

Why might they not be doing what you are doing and getting paid more for? It could be because of lack of ability (intelligence, skill). It could be lack of resources (money, time). It could be an institutional constraint (scalability, career risk). It could be an agency problem. It could be for emotional or psychological reasons. It could be because they just don’t want to.

The trick in any situation is to find that area where you are able to take advantage of you ability to do something others can’t do and where you know your going to get paid more for it. Its even better if you suspect that they will never be able to do what you do and therefore the competition will always be limited.

Product over technology

There is this absolutely excellent video of Steve Job dealing with the technology equivalent of a heckler:

https://www.youtube.com/watch?v=FF-tKLISfPE&feature=youtu.be

Jobs makes this incredibly insightful comment:

“The hardest thing is — how does that fit in to a cohesive larger vision, that’s going to allow you to sell — um — 8 billion dollars, 10 billion dollars of product a year.

And one of the things I’ve always found is that — you’ve got to start with the customer experience and work backwards to the technology. You can’t start with the technology and try to figure out where you’re going to try to sell it. And I’ve made this mistake probably more than anybody else in this room. And I’ve got the scar tissue to prove it. And I know that it’s the case.

And as we have tried to come up with a strategy, and a vision for Apple, um, it started with … what incredible benefits can we give to the customer? Where can we take the customer? Not starting with — let’s sit down with the engineers and figure out what awesome technology we have, and then how are we going to market that. Um … and I think that’s the right path to take.”

Its really quite amazing how often companies are often run in the manner of engineering solutions searching from problems instead of the other way around. Engineers often have the mindset: superior technology should always win. And Engineers also often end up thinking that whoever is the most technologically knowledgeable should essentially make decisions. Incidentally this strategy can work!!….just take a look at Google.

Of course it can also fail…just take a look at Samsung. Now Samsung does have many successes but Samsung should have achieved more. Its failures are largely due to the fact that they have an Engineers mindset. Thus they propose curved screens for cellphones and televisions. Who the fuck asked for curved screens?  No ones.

Samsung phones are filled with stupid features no one asked for. Like the phone detecting where your eyes are and scrolling based on your eyes.

The Engineering mindset has cost Google as well. Google basically invented a lot of cloud technologies, Big Data databases etc. Yet Amazon’s is crushing Google as a Cloud service provider. Why?

Islamism makes no sense

Its doesn’t take a large amount of critical thinking to understand that there are huge problems with Islamism.

Most Islamists believe in two incompatible ideas:

1) that all Muslims should live under Shariah law

2) That Mohammed’s life was perfect and that all Muslims should aspire to live as much like Mohammed as possible. This is why occasionally you will see some Muslim with an orange beard…because its believed Mohammed dyed is hair orange and that dying it black is forbidden.

The reason 1) and 2) are incompatible is simple…there was no Shariah in the time of Mohammed. So you cannot believe 2) while believing 1) since by following Shariah you are doing something that Mohammed was not doing.

To see this perform a thought experiment. Imagine that the closest person in your life believed you were incredible. So they wrote down every single thing you said. Then a religion was formed based on your life. Over hundreds of years numerous scholars debated you words, your ideas. They formed schools of thought, with principles, ideas, concepts and interpreted your life extensively through this theoretical structure. Then they spent hundreds of years codifying this into a set of laws. Finally at the end of this people started following these laws to the letter.

The question I would ask is at the end of this long complicated process, would the people living their lives according to these rules and laws be living a life that in anyway resembled yours?

The answer is of course no. The life of your future adherents would be much more rigid than yours and much less flexible. This is because rules in general tend to be rigid and inflexible. This has nothing to do with the nature of your life and everything to do with the nature of rules. Thus your adherents lives would be dominated by rules which is a different thing than living a life in a similar way to the one you lead or to the ideas you believed in.

Any rule based system has a certain type of structure and certain tendencies. For instance, rule based systems tend to resist exceptions. Exceptions in rule based systems always look ugly. They also resist inconsistencies. You can’t for instance have a rule saying you must not worship idols and another that says you must worship Mary. But a persons life is not like that. One day a person might do one thing and say one thing and the next day something else. If you try to examine this life and extract principles there is no reason that the principles have to be consistent. Thus a rule based structure encourages a logic, consistency and simplicity that simply does not exist in the chaos of the real world. It proposes a system of organization that does not match life.

Modern Muslims have more in common with other very ruled centered religions than they do with the religion Mohammed was preaching. In fact implicit in the very idea of Shariah is that Muslims can be more perfect than Mohammed himself. If I ask the rhetorical question: Why didn’t Mohammed follow Shariah law. The answer would have to be that he didn’t have the benefit of it but that Muslims have now progressed and been able to create a consistent set of rules. Are Islamists, not really saying, through Shariah we can be even more Islamic than Mohammed himself and is this not ridiculous.

A better medium for representing the practice of Islam might be art instead of rules. Stories, parables, fables, aphorisms, sayings, songs etc. Indeed this his how religion used to be transmitted. This is the content of most of the Bible and I believe most of the Koran.

Rules take on a life of their own and this is what has happened in Islam. Islamists are more interested in rules than they are in Islam. Both Islamists and Orthodox Jews should combine their religions together and call themselves rulists since their true God is Rules.

The elements of Fargo

The show Fargo is pretty great. Each season though is familiar though not the same as the other seasons. The stories are different. But there are common elements. What are the common elements?

Setting

Each episode is set in some smallish town in Minnesota. Last names are Swedish. Tonnes of snow. Minnesota accents and ways of talking. Minnesota here represents ordinary, simple, basic decency.

Characters

Cop

Usually one cop, always a local and often a woman. She is decent, very down to Earth and extremely family oriented. Half the time she is pregnant or someone in her family is. This sets up a very strong contrast between her and the violence and criminals that surround her. She is a symbol of decency, goodness and vulnerability amidst a dangerous, evil uncaring world and her ability to overcome this evil represent the ultimate triumph of ordinary goodness over extraordinary evil.

The Devil

Usually a man. Extremely intelligent psychopath with zero compunctions about using violence to achieve his ends. Often extremely proficient and very good at what he does. He is usually charming, seductive, brilliant, daring, deeply philosophical, violent and evil. A lot of the most interesting parts of the show are parts where the Devil is articulating his philosophy.

The Loser

A person who is basically a loser. In their marriage or in their life. They suck. They are usually the setup for almost all the action that later takes place.

Often they end up being involved in a crime of some sort. This sets up a sort of triangle and the action is between the Loser, the Devil and the Cop. The loser in this situation is pathetic, nervous, scared, desperate. He is a counterpoint to the Devil and to the Cop. Whereas the cop represent ordinary good, the devil extraordinary evil, the loser represents someone in the middle…a sort of ordinary evil. He doesn’t commit evil because he is fundamentally evil but rather out of pathetic desperation. As time goes on the Loser who doesn’t want to be involved in what’s happening becomes increasingly involved and commits increasingly desperate acts.

Criminals

Usually there are a number of criminals involved and a lot of them are outsiders. The criminals are necessary to the plot because they basically add all the violence and death. The create the danger. They contrast hugely with the Minnesota setting which is normally boring, ordinary and simple.

The Devil is easily able to navigate this violent world and much of his obvious power is demonstrated in how he is able to manipulate any situation to his own advantage. The Loser, pathetic and desperate, is often able to figure out ways to survive but only by doing increasingly evil and dangerous things. We often end up rooting for him despite this because he is such an underdog.

The cop appears outmatched and its unclear how he/she who is just an ordinary good decent person can deal with a world of violence. A tremendous tension here is created by the extraordinary evil and the ordinary, simple decency of the cop. The cop in contrast to the brilliant devil and the desperate Loser is able to succeed not through daring acts or through becoming more more evil but instead by diligence, persistence, bravery and resoluteness.

The cop succeeds through ordinary good police work.

Liberal Stupidity: Insane Black Liberal Edition

It seems Andrew Sullivans explanation struck a cord. Salon’s clickbait comes from Chauncey DeVega.  DeVega’s explanation of Asian outperformance is basically a non-explanation. He dances around the topic but never really get in any blows. But what can you really expect from the poor man’s Ta-neshi Coates.

He trots out some liberal standards. Asians are not a monolith. Some Asians such as Cambodians are actually doing worse than the general population. Its really kind of hilarious. This fact doesn’t weaken the idea that culture explains success…it actually supports it.  I am really kind of amazed at this rhetorical jujitsu.

They way he managed to accomplish this feat is by first creating a strawman. He says that Andrew Sullivan is really supporting the model minority myth. He then tried to tear down the idea of model minorities by claiming Asians are not a monolith. He is right they aren’t. But the point that Andrew Sullivan was making was not that Asians are a monolith…his point was that culture matters. This point is made even stronger when you disaggregate large categories like Asian and look into  sub-components. You can do the same with Whites and Blacks.

With Blacks you will see African groups like the Nigerian Igbo’s consistently outperforming in schools regardless of where they immigrate. With whites you will see groups like the Azores Portuguese consistently failing in school. Andrew Sullivan used the short hand Asian but disaggregating into sub-groups, his argument is even stronger.

Chauncey DeVega isn’t the first to engage in this jijitsu. The best job of it was done by Stephen Steinberg. He tried to account for Russian Jewish success but in doing so he outline a series of advantages Russian Jews had due to their history, values and practices. For instance, Russian Jews lived in cities and so tended to have strong experience when it came to urban professions and so they tend to do well when they move to cities. Stephen Steinberg does not consider this to be part of their culture. Its a typical move, you construct a weak argument you say your opponent is making and then you try to destroy the weak argument.

But of course your opponent was never making that argument. In Stephen Steinberg case the weak argument is the idea that some groups like Russian Jews have some mystical grittiness and ambition the enables them to succeed in every possible environment.  This is of course ridiculous. But that was never the argument that conservatives like Thomas Sowell were making. Sowell was really saying that it was incorrect to presume that the differences between different ethnicities are the result of current racial discrimination. Instead different groups would have massive variations in their success due to historical circumstances, culture, values etc. Stephen Steinberg doesn’t actually weaken this point he massively strengthens it. He makes nearly the exact same argument as Sowell that Jewish economic success can be explained by their history in Eastern Europe: the skills they learned as primarily urban inhabitants and how well these skills matched the requirements in urban US cities, their relatively high rates of literacy etc.

This is exactly the point Sowell made. Its interesting that Steinberg fails to realize how massively his arguments weaken the idea that differences between ethnic groups can be explain by current discrimination. Steinberg doesn’t bother to even try to explain what happened to the Russian Jews by current discrimination. When your opponent in arguing against your point actually is forced to support your point with your exact arguments its a pretty strong indication that you are right.