Thursday, May 28, 2009

Black Swan - Initial Thoughts

After three attempts and about three years, I have finally finished the Black Swan. I can honestly say that this was the most challenging book I have ever picked up, and completing it became more of a mission than it was a pure pleasure. The published manifesto circulated to support the book is engaging, and the book starts off well enough before thrusting readers into the deep end.

As I sit back and reflect on the reasons for why it was such a challenge, I have come to the following:

· The vocabulary was too vast.
· To fully follow the book, you cannot put it down for any notable period of time.
· The topic threads at times don’t appear to connect.
· The concepts are a bit too challenging.

Allow me to elaborae further…..

Vocabulary

Nassim is clearly very smart, and unfortunately for me, his vocabulary is far more extensive than my own. As such, there were a great many words whose meanings I simply did not know. As such, my choice was to ignore them, or look them up. To give you a sense of what I am talking about, consider the following words that I jotted down for the purposes of looking them up later:

· Flaneur
· Sycophany
· Levantine
· Mercantile
· Hellenistic
· Byzantine
· Ethos
· Indelible
· Pyrrhic
· Iniquitous
· Bard
· Troubadour
· Epistomology
· Denizen
· Obscurantist
· Fideism
· Erudite
· Philistinism
· Verisimiltude
· Obsequiousness
· Hedonic
· Pontification
· Polyglot
· Wile
· Tomes
· Penurious
· Charlatan
· Aggrandized
· Fiat
· Unctuous
· Precocity
· Ad hominem
· Sui generis
· Quincunx
· Paucity
· Dialectic
· Unassailable
· Derisively
· In extremis
· Synod style

Concepts

Nassim introduces a whole host of concepts in the book, and continues to refer to them after their introduction. As such, it is important to get a handle on them. As a sampling of the concepts introduced, consider the following:

· Mediocristan versus Extremistan
· Great Intellectual Fraud – GIF
· Cheap Signalling
· Barbell strategy for investing
· Mandlebroatian versus Gaussian
· Preferential attachment
· Cumulative advantage
· Knightian risk
· Corroboration errors
· Negative empiricism
· Silent evidence
· Black Swan Triplet: Rarity, extreme impact, and retrospective predictability.
· Epistemic arrogance
· Nerd effect
· Anchoring
· Ludic fallacy
· Platonication

Additional Notes

·He loves Physics as he views it as a pure science – couldn’t agree more!
·Laughs at game theory and people that try to apply rigid math to economics as he argues that we really can’t apply most models to economic issues. Also believes that Alfred Nobel would be rolling in his grave if he knew the types of people that were getting Nobel Prizes these days.
·Suggests that fractals are a good way to go about predicting as they maintain their symmetry at different scales. He then ties this to the need to use Power Laws in our predictions, but suggests that knowing which specific power to use is a very difficult thing to know for sure.
·His sarcasm is costic as can be, but that makes reading amusing.
·He has an interesting history, and is clearly very bright.
·He thinks the bell curve is the Great Intellectual Fraud in that people try to apply a normal distribution to data that can’t fit that type of distribution.
·Mediocristan is a world where data doesn’t vary widely within a given data set. While the individual data points might vary from one another, no single data point can influence the average value of the data aggregate. For example, if you randomly collect 100 people and take an average of their weight, you will get a value X. If you were to replace any one person in the sample with the heaviest person in the world, the average of that sample would not change appreciably. Extremistan is a world where data can vary dramatically one point to the next. An example of an attribute from Extremistan is personal wealth. If you repeat the above example with personal wealth, substituting one person in the sample with Bill Gates would have a huge influence on the aggregate average.

Things I Learned in May

I will be the first to admit that I have an addiction. I can't help but learn about people and things ALL the time. Sometimes I think that work and life don't ever seem to engage your mind as much as shool does. At times though I realize that the problem may just be that I don't realize the amount of learning that actually happens. So, this month, I have decided to look at what I learned in the month of May.
First, a qualifying statement. Everything listed in the immeidiate section below came to me thanks to listening to Ted talks available from http://www.ted.com/. There you will find amazing speeches on a variety of topics including, business, science, politics, etc. I truly encourage you all to hit the site today! If any of these topics are of interest, please let me know and I will point you to the specific speech.
Quorum sensing in bacteria (Bonnie Bassler). It turns out that the study of bacteria has come a loooong way since I studied the topic in school. Specifically, scientists have learned that bacteria communicate by exchanging small molecules, not unlike cytokines you find in immunology. The concept was initially discovered by work on a certain type of nocturnal squid found off the coastal waters of Hawaii. Turns out this squid has pouches filled with bacteria that glow. The purpose of the bacteria is to light the animal from its underside, thereby eliminating its shadow as it patrols the shallow coastal waters using moonlight to see. Brilliant! So, the bacteria collectively turn on their glowing mechanism only once there are enough of them in the area – the measurement being achieved by the concentration of these communication molecules. If the concentration is not sufficient, the bacteria simply do not glow. When they reach quorum, presto, glowing! Amazingly, there are intraspecies communication molecules and interspecies communication molecules.

It is believed that it is quorum sensing that is used when they take over a host such as a human. Another interesting aside is that 10 trillion bacterial cells can be found on you and/or in you at any time compared to about 1 trillion of your own cells. Similarly, you have 30000 genes in your genome, but in your life about 3,000,000 bacterial genes influence your life via the bacteria on
AIDS in Uganda. Uganda is often cited as one of the only successes at reducing AIDS infection in sub Saharan Africa. This has always been attributable to the launch of an aggressive campaign entitled ABC for its pillars of Abstinence, Being Faithful, and Condoms. Recently, however, a social scientist has made a very interesting observation. It turns out that the incidence of infectious disease in a country is correlated to the amount of exporting it does. So, in the case of Uganda, its primary export is coffee. Precisely over the years that AIDS infections decreased, the price of coffee went up. When prices goes up, export go down, and by extension, maybe the incidence of infection goes down.

Decision Making. I learned some interesting concepts about how we make decisions. It turns out that introducing an innocuous choice to people may well sway their way of choosing. For example, imaging choosing between the following items:

· All expense paid trip to Rome
· All expense paid trip to Paris

As both are fairly equivalent, participant choices can be expected to be fairly even. But, if you introduce a third option, All expense paid trip to Rome, save your morning coffees. As expected, this shifts the choices made from the coffee deficient trip to Rome to the complete trip to Rome. Interestingly, however, it also shifts the choices away from Paris altogether. Applied to dating, this means you should be seen with a slightly less attractive version of yourself. In that way, you will seem comparatively more attractive.

Texting Google (David Pogue). You can text google for information and it will return a reply is sub 5 seconds. For example, text “New York weather” to Google and presto, you get the day’s weather. You can do the same to get local restaurant listings and many, many more things.

Also, at present if you have a wifi enabled phone, you should make your calls while on wifi instead of the carrier because wifi calls are free. Better yet, even if your signal switches the paid carrier later, you won’t be billed as the carriers haven’t figured out how to track this transition yet!

Twitter (Evan Williams). 47 members of US cabinet members have twitter.

NOAA (Robert Ballard). – The ocean equivalent of NASA, this body explores the features and creatures found in our ocean. Sadly, 160

Sheep Castration (Mike Rowe). Host of the TV show “Dirty Jobs” describes how the Human Society and PETA confirmed human way of castrating sheep leaves them trembling and suffering for a far greater period of time then would if the more traditional method of having the testicles bitten off by a human (no joke) was employed. Mike goes on to say that we as a society have waged a war on work, that an honest day of manual labour is something that few people want to do, yet is something we still vitally need.

Brain Science (Jill Bolte Taylor). Probably one of the best talks ever, this talk provides amazing insight about stroke by a neuroscientist who underwent a stroke. She describes how her left hemisphere would cycle between being online and offline with crazy results. While online, she was aware of her stroke and what needed to be done (i.e. get help), but when offline, she was in a state of euphoria thanks to functioning of the right brain. The right brain she describes was unable to process boundaries to objects; everything appeared to be connected and at peace. She struggled to place a call for help, but the concepts of numbers simply did not register with her – she resorted to looking at them, trying to identify similarities in the “numbers” on her business cards and those on the phone. She was successful in dialing, only to hear her colleague speaking to her in what she interpreted Scooby Doo type talk. To her amazement, when she spoke, what came out was equally unintelligible. After eight years she has recovered and has an amazingly unique story to tell. If you listen to one talk, may this the one!

These kernels of knowledge have been drawn from the book Social Intelligence by Karl Albreght.

· New Expression: Ballistic Podiatry! – Nice way to say shooting yourself in the foot.
· Social Flatulence – acting and/or saying something inappropriate.
· Social Dandruff – when your behavior directly impacts those around you, and you are entirely oblivious and/or don’t care, much like if you flicked you dandruff ridden hair all over nearby passengers on a bus.
· Social Halitosis – When people talk, and talk, and talk without regard to giving other’s a chance to contribute.

African Aid (Dambisa Moyo). While we think that aid that the western world has provided to Africa is a good thing, the reality is that it may not be. Overall, Africa has benefit only marginally from the millions of dollars that have been shuttled its way through foreign aid, despite the well-intentioned efforts of highly visible celebrities like Bono. In her book, a very outspoken and knowledgeable Dambisa Moyo makes the argument foreign aid actually supports the dictators in power as it gives them little incentive to change anything for the betterment of their citizens.

Game Theory. Not that I aspire to grandeur on the poker stage, but I have started to study Game Theory. While it isn’t overly complicated, it is twisted at times. For example, there can be a solution to a problem that would provide the best results for both parties, but sadly will never be selected. An example of this is the Prisoner’s Dilemma. Suppose you and I committed a crime and were sitting together in a restaurant sometime after the event. Sadly, we had never discussed our stories, and suddenly two cops approach us and separate us. Held in our individual cells, we are asked what happened. Our choices and results are as follows:

· Neither of us implicate each other – we both get off.
· We both implicate each other – we both serve three years.
· One of us implicates the other, but not the other way – the implicator gets off; the one implicated serves 5 years.
The question is, not having chatted, what do we do? The result is that we implicated one another and serve three years. Although saying nothing would have served us better collectively, not knowing what the other would do, left us with the best option of implicating one another.