“If you ever hear yourself saying, 'I think I understand this,' … that means you don't."
Richard Feynman
Another Paradox for AI - by Erik J Larson - Colligo (substack.com)
In "Another Paradox for AI," Erik J. Larson explores the current state of artificial intelligence (AI), emphasizing the disparity between AI's hype and actual capabilities. He discusses the confusion and concerns about AI alignment and the practical misalignment issues encountered today and introduces what he calls "Larson's Paradox." This paradox posits that the very success of AI in performing tasks dispels the sci-fi visions about it, revealing that AI, though powerful, is fundamentally mindless and not truly intelligent. Larson argues that the real challenge lies in managing and supervising these systems rather than fearing existential threats.
Key Points
Current State of AI:
AI has become mainstream, but not in the revolutionary manner once predicted.
Practical applications, such as customer service improvements, are more common than groundbreaking innovations.
AI Alignment Concerns:
Public worries about AI alignment often involve fears of autonomous AI turning against humans.
Real misalignment today is mundane: AI systems making mistakes, like generating false information or incorrect policies.
Misalignment in Practice:
Examples include language models generating misinformation or faulty customer service responses.
These issues are annoying and potentially harmful but lack the dramatic, existential dangers often imagined.
Larson's Paradox:
The success of AI dispels sci-fi notions, showing that AI is powerful but not truly intelligent.
As AI systems become more effective, they reveal their inherent mindlessness, relying on data and computational power rather than genuine understanding.
Historical Context and Related Paradoxes:
References to Moravec’s Paradox, the Frame Problem, the Qualification Problem, and the Ramification Problem highlight ongoing challenges in AI development.
These issues underscore the limitations of AI in replicating human-like intelligence and decision-making.
Implications for the Future:
Larson argues for taking ownership and oversight of AI systems to prevent misuse.
The focus should shift from fearing existential risks to managing practical misalignment and ensuring ethical use.
Moravec’s Paradox
The Moravec paradox states the tasks that are easy for humans, and difficult for machines, such as facial recognition.
The Frame Problem
The Frame Problem arises from the difficulty of an AI system in determining what is relevant in a given situation. When an AI receives new information, it struggles to update its beliefs without considering an impractically large number of irrelevant possibilities.
The Qualification Problem
The Qualification Problem refers to the difficulty in specifying all the preconditions necessary for an AI to successfully perform an action. It is challenging to account for all possible exceptions and contingencies in a rule-based system.
The Ramification Problem
The Ramification Problem occurs when an action taken by an AI has unintended consequences that must be accounted for. These side effects are not directly specified in the initial conditions or actions but are a natural consequence of the world model. (Read: why we don’t have Level Five self-driving cars, and won’t, for a very long time.)
Key Quotes
"We’re in an era of confusion about AI—not nearing its culmination."
"Real misalignment is less sexy: generative (statistical) systems making up facts and dates and refund policies, and confidently screwing up logic and math problems."
"The very success of AI tends to dispel the sci-fi visions about it."
"Progress in AI proves the critic, not the futurist: critics all along were insisting that machinery can’t really be intelligent, and they were right."
"We can, endlessly, throw computer power at problems and simulate intelligent solutions to them. But we can’t get a mind from a mechanism."
Why It Matters
Reality Check: Larson’s insights provide a grounded perspective on AI's current state, countering the often exaggerated claims that it is on the brink of becoming truly intelligent.
Focus on Practical Issues: Highlighting the mundane misalignment problems shifts the focus from hypothetical existential threats to real, immediate issues that can be addressed and managed.
Policy and Ethics: Emphasizing the need for oversight and ethical considerations in AI development and deployment is crucial for preventing misuse and ensuring beneficial outcomes.
Cultural Impact: Understanding Larson's Paradox helps reshape public perceptions and expectations of AI, fostering a more realistic and informed dialogue about its capabilities and limitations.
Decade of the Battery - by Noah Smith - Noahpinion
In "Decade of the Battery," Noah Smith argues that batteries are set to be the defining technology of the 2020s despite the recent surge in generative AI. Smith contends that the advancements in battery technology will transform various sectors, including energy storage, transportation, warfare, and everyday appliances. The improvements in battery cost and energy density drive this transformation, making batteries a general-purpose technology capable of solving fundamental energy storage and transportation challenges.
Technological Importance
Advancements in Cost and Energy Density
Cost Reduction: The cost of batteries has seen a dramatic decrease, making them more accessible and economically viable. This reduction is largely attributed to extensive R&D efforts and industrial scaling.
Energy Density Increase: Higher energy density means that batteries can store more energy in a smaller space, enhancing their utility across various applications, from mobile phones to electric vehicles.
Energy Storage and Transportation
Solving Fundamental Problems
Storage: Batteries solve the intermittency problem of renewable energy sources like solar and wind by storing excess energy for use when generation is low.
Transportation: Batteries offer a flexible way to transport energy. Unlike fossil fuels, which require specific infrastructure (pipelines, tanks), batteries can be charged by any electrical source and used in various devices and vehicles.
Electric Vehicles (EVs)
Market Growth and Impact
Rapid Adoption: The market for electric vehicles is expanding rapidly, with sales of EVs expected to continue rising as internal combustion engine (ICE) vehicle sales decline.
Environmental Benefits: EVs produce zero tailpipe emissions, which can significantly reduce air pollution and greenhouse gas emissions.
Consumer Experience
Convenience: Charging an EV at home overnight is more convenient than frequent trips to gas stations. As battery ranges improve, this convenience will only increase.
Quiet Operation: Electric vehicles are much quieter than gasoline, reducing noise pollution in urban areas.
Utility-Scale Storage
Grid Stability
Renewable Integration: Batteries help stabilize the grid by storing excess energy generated from renewable sources and releasing it when needed, ensuring a reliable power supply.
Peak Shaving: Utilities can use battery storage to manage peak demand periods, reducing the need for expensive and polluting peaker plants.
E-bikes and Personal Transportation
Growing Popularity
Sales Surge: E-bikes are gaining popularity faster than electric cars, offering a practical solution for short-distance travel and urban commuting.
Health and Accessibility: E-bikes make cycling more accessible to a broader population, including older adults and those with physical limitations, by providing assisted pedaling.
Urban Planning and Infrastructure
Infrastructure Development: Cities can enhance their transportation networks with bike lanes and parking facilities for e-bikes, promoting a more sustainable and less congested urban environment.
Military Applications
Drones and Autonomous Systems
Battery-Powered Drones: The use of small, battery-powered drones in military operations has revolutionized surveillance, reconnaissance, and even direct combat roles.
Future Potential: Integrating AI with battery-powered drones and autonomous systems could enhance military capabilities, enabling more sophisticated and coordinated operations.
Household Appliances
Cordless Revolution
Convenience: The shift towards cordless, battery-powered household appliances (e.g., vacuum cleaners, lawn mowers) increases users' convenience and flexibility.
Efficiency: Advances in battery technology will continue to make these appliances more powerful and longer-lasting, reducing the need for frequent recharging.
Broader Implications
Environmental Impact
Reduction in Emissions: The widespread adoption of battery technology in transportation and energy storage can significantly decrease greenhouse gas emissions, aiding global efforts to combat climate change.
Resource Management: Efficient battery recycling and sustainable sourcing of raw materials will be crucial to minimizing the environmental footprint of battery production.
Economic Opportunities
Investment and Jobs: The growing battery industry presents vast opportunities for investment and job creation in manufacturing, R&D, and deployment.
Global Competition: Countries leading in battery technology and production, like China, are gaining significant economic and geopolitical advantages.
Conclusion
The "Decade of the Battery" underscores the transformative potential of battery technology across multiple sectors. From powering electric vehicles and stabilizing renewable energy grids to enabling new forms of personal and military transportation, batteries are set to play a crucial role in shaping the future. The continued advancements in battery technology will drive significant environmental, economic, and societal benefits, making it a cornerstone of 21st-century innovation.
Key Quotes
AI and Batteries: "AI promises to turn robotics from a niche type of machine tool into a ubiquitous feature of our world. The rise of autonomous machines will be — must be — battery-powered."
Battery Improvement Metrics: "The cost of batteries, measured in dollars per kWh stored, has fallen by 42 since 1991 and by a factor of 2.5 since 2010."
Electric Vehicles: "The EV market is going vertical, while global sales of internal combustion vehicles have flattened out and are forecast to decline relentlessly."
E-bikes: "E-bikes aren’t like normal bikes — they add electric power to your muscle power to produce a much easier ride. That transforms cycling in two ways."
Warfare: "Battery-powered drones are small, cheap, and relatively quiet. And in the era of increased geopolitical competition and conflict, innovation in military drones is probably just starting."
Why It Matters
Energy Transition: Batteries are crucial for transitioning to renewable energy sources by solving storage and intermittency issues.
Environmental Impact: Widespread adoption of electric vehicles and battery-powered devices can significantly reduce greenhouse gas emissions and reliance on fossil fuels.
Technological Synergy: The interplay between AI and batteries can lead to advancements in autonomous technologies and robotics, influencing many aspects of daily life and industry.
Economic Opportunities: The battery industry presents significant investment opportunities and potential for economic growth, driven by the demand for electric vehicles, energy storage solutions, and consumer electronics.
Military Strategy: Advances in battery technology can reshape military strategies and capabilities, highlighting the importance of technological innovation in national security.
Designing for Emergence - Aether Mug
The article "Designing for Emergence" by Marco Giancotti, published on Aether Mug, explores the concept of engineering emergence proposed by Susan Stepney, a professor at the University of York. Stepney argues that a science of emergence is necessary to advance beyond simple computational artifacts. Emergence, in this context, refers to complex systems and behaviors that arise from simpler interactions. Giancotti reflects on Stepney's ideas, discussing the challenges and potential strategies for designing emergent systems, particularly focusing on "growing" complex systems rather than constructing them from scratch.
In-Depth Exploration
1. Understanding Emergence
Emergence is a phenomenon in which larger entities, patterns, and behaviors arise through the interactions among smaller or simpler entities that do not exhibit such properties. Emergence in engineering and computer science refers to creating complex systems and behaviors by interacting with simpler components.
Examples of Emergence:
Biological Systems: The human brain, composed of numerous neurons, gives rise to consciousness and thought—a property not found in individual neurons.
Social Systems: Economies or social networks where individual actions and interactions lead to complex market behaviors or social trends.
Physical Systems: Weather patterns emerging from the interaction of atmospheric particles.
2. Engineering Emergence
Giancotti, echoing Stepney, discusses the challenges of engineering systems with desired emergent properties. Traditional engineering focuses on predictable, controllable outcomes, but emergent systems require a different approach because their behaviors cannot be easily predicted or designed directly.
Key Points:
Feature Emergence vs. Context Emergence: Simple emergent properties (e.g., scissors cutting paper) are easier to design, while complex properties (e.g., social behaviors or biological growth) are far more challenging.
Computational Irreducibility: Some processes are so complex that their outcomes cannot be simplified or predicted, making direct engineering difficult.
3. The Growing Approach
Stepney and Giancotti argue that complex systems should be "grown" from simpler systems rather than constructed with a top-down approach. This is akin to how biological organisms grow from single cells rather than being assembled part by part.
Gall's Law:
Principle: Effective complex systems evolve from simpler, functional systems rather than being designed from scratch.
Application: In AI, for example, deep learning models are trained (grown) through exposure to vast datasets, rather than explicitly programmed with every potential behavior.
Practical Implications:
AI Development: Modern AI development often involves training models on large datasets, allowing the system's emergent properties to develop through learning rather than explicit programming.
Software Engineering: Agile and iterative development processes can be seen as a way to "grow" software by continuously building and refining simpler systems.
4. Challenges and Future Directions
Developing a science of emergence involves addressing significant challenges, such as understanding and managing computational irreducibility and the role of contingency in system behaviors.
Strategies:
Imitating Nature: One approach is to mimic natural processes, observing how simple systems evolve into complex ones.
Creating Initial Seeds: Focus on developing robust initial simple systems that can evolve into complex ones through interaction and adaptation.
Research and Development:
Non-Standard Computation: Exploring alternative computational models such as cellular automata, non-Turing machines, and other unconventional approaches to computing.
Interdisciplinary Research: Combining insights from biology, physics, computer science, and systems theory to develop a comprehensive understanding of emergence.
Broader Implications
Technological Advancements
AI and Machine Learning: Understanding emergence can lead to more advanced and adaptive AI systems capable of learning and evolving in complex environments.
Complex Systems Engineering: Improved methods for designing and managing complex systems, from urban planning to ecosystem management.
Philosophical and Methodological Shifts
Holistic Design: Moving from reductionist approaches to a more holistic view of system design, recognizing the importance of interactions and emergent properties.
Adaptive and Iterative Processes: Embracing iterative development and continuous adaptation as key strategies for engineering complex systems.
Societal Impact
Education and Research: Encouraging new curricula and research programs focused on complexity science and emergence.
Policy and Governance: Informing policies and governance models that recognize and leverage emergent behaviors in social and economic systems.
Conclusion
"Designing for Emergence" by Marco Giancotti, drawing on Susan Stepney’s work, provides a compelling argument for developing a science of emergence. By understanding and harnessing the principles of emergence, we can advance technology, improve system design, and address complex challenges innovatively. The article serves as a call to action for researchers, engineers, and policymakers to explore and embrace the complexities of emergent systems.
Key Quotes
On the Need for a Science of Emergence:
“If we are ever to advance beyond simple computational artifacts, we need a science of emergence.”
This quote highlights the necessity of developing a theoretical framework for engineering complex emergent systems.
On Engineering Emergent Properties:
“Not only do we need to engineer the initially desired emergent properties, we need to engineer the ability to change in desired, if unanticipated, ways.”
Stepney emphasizes the dual challenge of designing emergent properties and ensuring they can adapt and evolve in beneficial ways.
On the Growing Approach:
“Complex systems should be 'grown' rather than 'switched on'’”
This encapsulates that complex systems are best developed through gradual evolution rather than complete initial design.
On Gall's Law:
“A complex system that works is invariably found to have evolved from a simple system that worked. A complex system designed from scratch never works and cannot be patched to make it work. You have to start over with a working simple system.”
Gall's Law underscores the importance of starting with simple, functional systems as the foundation for developing complex ones.
Why It Matters
Advancing Computation: Understanding and engineering emergence is crucial for advancing computational systems beyond limitations.
Interdisciplinary Insights: The discussion bridges computer science, biology, and systems theory, offering a holistic view of complex system design.
Practical Applications: The article's insights can inform the development of more sophisticated AI, adaptive systems, and other technologies that depend on complex interactions.
Philosophical and Methodological Shift: Emphasizing the "growing" approach represents a shift from traditional engineering methods, advocating for a more organic, evolutionary process in system design.
Foundation for Future Research: Stepney’s ideas provide a roadmap for future research in non-standard computation and the science of emergence, potentially leading to breakthroughs in multiple fields.
What is the Adjacent Possible?. Why our world is not predictable, and… | by Martin Erlic | Medium
Martin Erlic’s article, "What is the Adjacent Possible? Why our world is not predictable, and perhaps also why it should not be," explores the concept of the "adjacent possible," as introduced by theoretical biologist Stuart A. Kauffman. The adjacent possibilities represent the potential futures that are just a step away from the current state of affairs, encompassing all possible innovations and changes that could occur next. This concept highlights the limitations and the creative potential inherent in the present moment. Erlic uses biological metaphors and examples to elucidate how the adjacent possible operates within complex adaptive systems, such as evolutionary biology and technology.
The Concept of the Adjacent Possible
The adjacent possible term captures the potential pathways and innovations beyond current affairs. It is not a fixed destination but a dynamic space evolving as we make choices and act. This concept helps to explain how innovation and change occur in complex systems by exploring what is possible next, given the present conditions.
Biological Metaphors and Examples
Protein Diversity
Stuart A. Kauffman uses the example of proteins to illustrate the adjacent possible. Proteins are composed of sequences of amino acids, and the number of possible protein sequences is astronomically large. Despite the vast number of potential proteins, only a tiny fraction has existed on Earth. This suggests an enormous unexplored space of potential proteins — the adjacent possible in the biological realm.
Evolutionary Processes
In evolution, the adjacent possible can be seen in how organisms adapt and evolve. Each step of evolution opens up new possibilities for future adaptations, creating a continuously expanding landscape of potential forms and functions. This ongoing process is driven by natural selection but is also constrained by the current state of the organism and its environment.
Applications in Technology and Society
Technological Innovation
The adjacent possible plays a critical role in technological innovation. Each new invention or discovery opens up new possibilities for further advancements. For example, the development of the internet created an adjacent possible space that led to social media, e-commerce, and countless other innovations. As technology evolves, the boundaries of what is possible continuously expand.
Social and Economic Systems
In social and economic systems, the adjacent possible helps to explain how new social norms, economic policies, and cultural practices emerge. Societies are complex adaptive systems where small changes can lead to significant shifts in behavior and organization. By exploring the adjacent possible, societies can find novel solutions to challenges and create more resilient and adaptable structures.
The Adjacent Possible and Unpredictability
One of the key insights from the concept of the adjacent possible is the inherent unpredictability of the future. While we can map out potential pathways, the exact course of events remains uncertain. This unpredictability is not a drawback but a source of creativity and innovation. It ensures that there are always new opportunities and challenges to explore.
Creativity and Innovation
Creativity thrives in the space of the adjacent possible. Artists, scientists, and innovators often explore the edges of what is known, pushing boundaries and discovering new possibilities. This exploration is a fundamental part of the creative process, allowing novel ideas and solutions to emerge.
Complexity and Adaptation
Complex biological, technological, or social systems are characterized by their ability to adapt and evolve. The adjacent possible provides a framework for understanding how these systems navigate change and complexity. By constantly expanding into new possibilities, complex systems can maintain resilience and thrive in uncertainty.
The Fourth Law of Thermodynamics
Kauffman proposes that exploring the adjacent possible might be governed by a "Fourth Law of Thermodynamics." This hypothetical law suggests that complex systems maximize the rate of exploration of the adjacent possible to increase diversity and sustainability. This idea implies that systems naturally tend to push the boundaries of what is possible, fostering continuous innovation and adaptation.
Implications for Future Exploration
The concept of the adjacent possible encourages us to remain open to new possibilities and actively explore the edges of our current knowledge and capabilities. It suggests that the future is not a predetermined path but a rich landscape of potential outcomes that we can influence through our actions and choices.
Embracing Uncertainty
Embracing the uncertainty inherent in the adjacent possible allows us to be more flexible and adaptive. Recognizing that the future holds many potential pathways allows us to better prepare for and respond to unexpected challenges and opportunities.
Fostering Innovation
Creating environments that encourage exploration and experimentation is essential to fostering innovation. This involves supporting diverse perspectives, encouraging risk-taking, and providing the resources to explore new ideas. By doing so, we can tap into the vast potential of the adjacent possible and drive progress in various fields.
Conclusion
The adjacent possible is a powerful concept that helps us understand the dynamics of change and innovation in complex systems. By exploring the potential futures beyond our current state, we can unlock new opportunities and drive continuous progress. This concept underscores the importance of creativity, adaptability, and open-mindedness in navigating the complexities of the modern world.
Key Quotes
Steven Johnson on the Adjacent Possible:
"The adjacent possible is a kind of shadow future, hovering on the edges of the present state of things, a map of all the ways in which the present can reinvent itself…[it] captures both the limits and the creative potential of change and innovation."
Stuart A. Kauffman on Protein Diversity:
"Life has explored only an infinitesimal fraction of the possible proteins. If such a tiny fraction of the potential diversity of proteins of length 100 have ever felt the sun’s warmth, then there is plenty of room for human explorers to roam."
Kauffman on Biospheres and Complexity:
"It appears, he says, that 'biospheres on average keep expanding into the adjacent possible,' as if by mandate, a hint perhaps of a new general law governing complex information networks: a Fourth Law of Thermodynamics."
Why It Matters
The concept of the adjacent possible is crucial for understanding the dynamics of innovation and evolution within complex systems. It underscores the importance of the present as a launching pad for future possibilities and emphasizes that creativity and change are driven by exploring nearby potentials. This has profound implications for various fields:
Science and Technology: Encourages a mindset of continuous exploration and adaptation, recognizing that there are always new possibilities beyond the current state.
Evolutionary Biology: Provides a framework for understanding how biological diversity and complexity arise from simple beginnings.
Social and Economic Systems: This chapter highlights the unpredictable nature of societal change and the importance of fostering environments that allow for diverse and innovative solutions.
Philosophy of Science: Challenges deterministic views and supports the idea that unpredictability is natural and beneficial for growth and innovation.
By recognizing and embracing the adjacent possible, individuals and organizations can better navigate the complexities of the modern world, fostering innovation and resilience in the face of uncertainty.
This exploration of the adjacent possible invites us to remain open-minded, continuously seek new opportunities, and understand that the future is shaped by the myriad potential pathways available to us at any moment.
Value for Money - by Bob Seawright - The Better Letter (substack.com)
In "Value for Money," Bob Seawright discusses Warren Buffett's early investment strategy known as the "cigar butt" approach, where undervalued stocks are bought for short-term gains despite poor long-term prospects. Over time, this approach became less effective, leading Buffett to shift towards buying high-quality companies at fair prices, influenced by Charlie Munger. The article then transitions to a fascinating exploration of how NFL teams build rosters under a hard salary cap, focusing on the challenges of balancing player compensation, particularly for quarterbacks, with overall team success. The piece concludes with reflecting on D-Day and the heroism of the "greatest generation."
Warren Buffett’s Investment Evolution
Cigar Butt Investing
Definition:
The "cigar butt" approach to investing, inspired by Benjamin Graham, involves buying stocks that are undervalued to such an extent that even a small improvement in their fortunes can yield a decent profit.
Key Characteristics:
Short-term Gains: The focus is on achieving quick profits rather than long-term growth.
Undervalued Stocks: These are often stocks of companies with poor long-term prospects but temporarily low prices.
Risk: There is an inherent risk because the long-term performance of these companies tends to be poor.
Example:
Berkshire Hathaway, originally a textile company, was bought by Buffett as a cigar butt investment.
Shift in Strategy
Influence of Charlie Munger:
Munger influenced Buffett to transition from cigar butt investing to buying high-quality companies at fair prices.
New Philosophy:
Quality Over Price: It’s better to invest in a great company at a fair price than a fair company at a great price.
Sustainable Growth: Focusing on companies with good long-term prospects can yield more sustainable returns.
Key Quotes:
“Time is the friend of the wonderful business, the enemy of the mediocre.”
“Good jockeys will do well on good horses but not on broken-down nags.”
NFL Salary Cap Challenges
Introduction and Purpose
What is the Salary Cap?:
Introduced in 1994, the salary cap is the maximum amount NFL teams can spend on player salaries. It is designed to:
Ensure Competitive Balance: Prevents wealthier teams from outspending others.
Control Costs: Keeps player salaries within a predictable range to avoid excessive financial risks.
Historical Context:
The cap has grown significantly, from $36.4 million in 1994 to $255.4 million in 2024.
Quarterback Compensation
Importance of QBs:
Quarterbacks are crucial to a team’s success but command the highest salaries, which can be a double-edged sword under the salary cap.
Young Threshold:
Named after Steve Young, it posits that no team with a quarterback taking over 13.1% of the salary cap would win a Super Bowl, a belief somewhat challenged by Patrick Mahomes’s recent success.
Challenges:
High Costs: An expensive quarterback can limit a team’s ability to build a strong overall roster.
Balancing Act: Teams must balance paying star players and maintaining depth and quality in other positions.
Key Quotes:
“Balancing the need for great quarterback play with the realities and limitations of the NFL salary cap is a fascinating problem.”
Rookie Contracts
Advantages:
Players on rookie contracts provide significant value at a lower cost, allowing teams to allocate more resources to other positions.
Examples:
The Chiefs’ Super Bowl roster included many players on rookie contracts, highlighting the importance of inexpensive talent in building a championship team.
Historical and Emotional Reflection
D-Day Anniversary
Context:
The article concludes with a reflection on the anniversary of D-Day, the Normandy landings during World War II, which took place on June 6, 1944.
Significance:
Heroism: It honors the bravery and sacrifice of the soldiers involved.
Legacy: Highlights the impact of the "greatest generation" on contemporary values and freedoms.
Emotional Impact:
This reflection provides a broader perspective on perseverance, sacrifice, and the importance of historical memory, which can inspire various aspects of life.
Key Quote:
“Every man who set foot on the beaches of Normandy on June 6, 1944, was a hero – the men who took the cliffs to fight tyranny and took back a continent for freedom.”
Why It Matters
Investment Insights
Adaptability:
The shift in Buffett’s strategy underscores the need for investors to adapt to changing market conditions and seek sustainable growth.
Sports Management
Strategic Resource Allocation:
The NFL salary cap discussion illustrates the complexities of managing resources effectively to build a competitive team, applicable to various strategic planning scenarios.
Historical Reflection
Inspiration:
Reflecting on historical events like D-Day can inspire individuals to appreciate the sacrifices made for current freedoms and to apply similar perseverance in their endeavors.
Practical Applications
Real-World Relevance:
The principles of getting value for money, whether in investments or sports, are widely applicable. Understanding these concepts can aid in making informed and strategic decisions in various fields.
This detailed exploration of "Value for Money" by Bob Seawright highlights the multifaceted nature of strategic thinking in finance and sports and the enduring lessons from history.
If it's boeing i'm not going, and other ways you mis-price risk (contessacapitaladvisors.com)
The article "If It’s Boeing, I’m Not Going, and Other Ways You Mis-price Risk" explores the concept of risk mispricing by highlighting Boeing's example. It discusses how emotional responses and cognitive biases can lead to poor investment decisions, particularly in high-profile incidents or negative news. The piece emphasizes the importance of rational analysis over emotional reaction when assessing investment risks and opportunities. By examining the Boeing case, the article illustrates how investors can misinterpret the true risks involved and offer insights into better risk assessment practices.
Key Points
Emotional Reactions to High-Profile Incidents:
Boeing Case Study:
After the crashes involving the Boeing 737 Max aircraft, there was a significant emotional reaction from the public and investors.
Many investors sold Boeing stock in panic, driven by fear rather than a rational analysis of the company’s long-term prospects.
Impact on Stock Price:
The immediate reaction led to a sharp decline in Boeing’s stock price, reflecting a common pattern where high-profile negative news triggers a disproportionate market response.
Cognitive Biases:
Availability Heuristic:
This cognitive bias leads individuals to overestimate the likelihood of events based on their recent exposure to them.
The vividness and recency of the Boeing crashes made them more salient in investors' minds, causing an overestimation of the risk associated with Boeing stock.
Anchoring:
Investors often anchor their perceptions and decisions based on the initial piece of information they encounter.
Early reports of the crashes and the subsequent media coverage anchored investors’ perceptions, leading to an overreaction.
Rational Risk Assessment:
Fundamental Analysis:
The article emphasizes the importance of focusing on a company’s fundamentals, such as financial health, market position, and long-term prospects, rather than being swayed by short-term news.
Long-Term Perspective:
Encourages investors to adopt a long-term view, recognizing that temporary setbacks or incidents do not necessarily indicate a company’s overall viability or future success.
Better Risk Assessment Practices:
Diversification:
Spreading investments across different sectors and asset classes can reduce the impact of any single adverse event.
Diversification helps manage risk by ensuring that an investor’s portfolio is not overly reliant on one company or industry.
Continuous Learning:
Staying informed about market trends, economic indicators, and investment principles is crucial.
Continuous learning helps investors refine their risk assessment skills and prepare for varying market conditions.
Key Quotes
On Emotional Reactions:
“When news of the 737 Max crashes broke, many investors panicked, selling off Boeing stock without considering the long-term impact on the company’s fundamentals.”
On Cognitive Biases:
“The availability heuristic leads us to overestimate the probability of events we can easily recall, such as a plane crash, even if statistically rare.”
On Rational Risk Assessment:
“Investors need to distinguish between short-term noise and long-term signals. A single incident, no matter how tragic, does not necessarily reflect the overall health or future prospects of a company.”
On Better Risk Practices:
“Diversification is not just a buzzword; it’s a critical strategy for managing risk. By spreading investments, one can mitigate the impact of any single adverse event.”
Why It Matters
Investment Decision-Making:
The insights provided help investors recognize and avoid common pitfalls driven by emotional reactions and cognitive biases.
Encouraging a rational, analytical approach to investment decisions can lead to more consistent and informed outcomes.
Risk Management:
Effective risk management is essential for maintaining a balanced and resilient investment portfolio.
Understanding and mitigating cognitive biases can improve risk assessment and help investors navigate market volatility.
Market Dynamics:
The article illuminates how investor behavior, influenced by emotions and biases, can affect stock prices and market trends.
Recognizing these dynamics can provide a competitive edge in predicting and responding to market movements.
Educational Value:
The piece serves as a valuable educational resource, especially for newer investors who may be more prone to emotional reactions.
It reinforces the importance of continuous learning and staying informed about investment principles and market conditions.
Practical Applications
Portfolio Strategy:
Investors can apply the principles discussed by ensuring their portfolios are well-diversified and not overly concentrated in any single stock or sector.
Regularly reviewing and adjusting portfolio allocations based on rational analysis rather than emotional reactions can enhance long-term performance.
Investment Education:
Engaging in continuous learning through reading, attending seminars, and following market analysis can help investors stay updated and improve their decision-making skills.
Understanding cognitive biases and their impact on investment decisions can lead to more disciplined and objective investing.
Risk Assessment Tools:
Utilizing tools and resources for fundamental analysis can provide a clearer picture of a company’s financial health and long-term prospects.
Employing risk management strategies, such as setting stop-loss orders and maintaining an emergency fund, can help mitigate potential losses.
By delving into these aspects, the article "If It’s Boeing I’m Not Going, and Other Ways You Mis-price Risk" provides a comprehensive guide to understanding and improving risk assessment in investment practices. The emphasis on rational decision-making, awareness of cognitive biases, and effective risk management strategies offers valuable lessons for novice and experienced investors.
"How to Read a Paper" by S. Keshav from the University of Waterloo presents a practical approach for efficiently reading research papers. The paper introduces a three-pass method to help researchers manage their time and effort while reading papers. The first pass gives a general overview, the second pass offers a deeper understanding without delving into details, and the third pass provides a comprehensive analysis, enabling a thorough grasp of the paper's content. The method also includes guidance on conducting literature surveys. This structured approach allows researchers to read and evaluate papers more effectively and efficiently.
Key Points
Introduction:
Researchers need to read papers for various reasons, including reviewing for conferences, staying current in their field, or conducting literature surveys.
Efficient paper reading is a critical skill rarely taught, leading to wasted effort and frustration among students.
The Three-Pass Approach:
First Pass: This quick scan takes about 5-10 minutes to get a bird' s-eye view of the paper.
Steps: Read the title, abstract, and introduction; read section and sub-section headings; read the conclusions; glance over references.
Outcome: Answer the five Cs (Category, Context, Correctness, Contributions, Clarity).
Second Pass: A more detailed reading that takes up to an hour.
Steps: Look carefully at figures, diagrams, and illustrations; mark relevant unread references.
Outcome: Grasp the content of the paper and be able to summarize it to someone else.
Third Pass: A thorough reading aimed at understanding the paper in depth.
Steps: Virtually re-implement the paper's work; identify and challenge every assumption; jot down ideas for future work.
Outcome: Reconstruct the entire structure of the paper from memory and identify its strengths and weaknesses.
Doing a Literature Survey:
Use academic search engines like Google Scholar or CiteSeer to find recent papers and read their related work sections.
Identify key papers and researchers by looking for shared citations and repeated author names.
Scan the proceedings of top conferences to find recent high-quality work.
Make two passes through these papers and iterate as necessary.
Experience:
The author has used this approach for over 15 years to read conference proceedings, write reviews, and conduct background research.
The method helps estimate the time required to review papers and adjust the depth of evaluation based on needs and available time.
Related Work:
Recommends reading Timothy Roscoe’s paper on writing reviews for systems conferences and Henning Schulzrinne’s and George Whitesides’s guidelines on writing technical papers.
A Request:
The author invites readers to provide comments and suggestions for improving the document.
Acknowledgments:
The author's students initially drafted the document and improved with colleague feedback.
Supported by grants from various organizations.
Key Quotes
On the necessity of learning efficient paper reading:
"Learning to efficiently read a paper is a critical but rarely taught skill."
On the first pass:
"At the end of the first pass, you should be able to answer the five Cs: Category, Context, Correctness, Contributions, Clarity."
On the second pass:
"After this pass, you should be able to grasp the content of the paper. You should be able to summarize the main thrust of the paper, with supporting evidence, to someone else."
On the third pass:
"This pass requires great attention to detail. You should identify and challenge every assumption in every statement."
What I’ve Learned: Stephen King (esquire.com)
Fame is a pain in the ass. The older you get, the more of a pain in the ass it is. But you have to realize that it comes with the territory. It’s just part of what you do.
There’s this old Spanish saying: “God says, ‘Take what you want and pay for it.’ ” That’s the case with being famous.
I knew a lot when I was seventeen. But since then, it’s been a constant process of attrition.
You can’t think of writing as an adult pursuit or anything that’s important. That’s a good way to turn into a gasbag and start to think that you’re really fucking important. You’re not. You just do your work.
I have to work every day because I have to keep it fresh. If you take a few days off, it all starts to look kind of tacky—like an old campaign poster that’s running in the rain.
It doesn’t always work. I’ve got stories that just ram up against a brick wall. They’re in my right desk drawer. I don’t look in there.
If it’s a good review, it can be dismissed. If it’s a bad review, well, then that’s something you obsess over a little bit.
The important thing about failing is that it should always be a learning experience.
When I have a good idea, I just know. It’s like if you have a bunch of cut-glass goblets set up and you’re hitting them with a spoon. Clunk, clunk, clunk. And then one goes ding.
In every marriage, after the shine is off, then you get down to the serious work of building a relationship.
You can’t let the sun go down on your anger. These all sound like fucking platitudes. They become platitudes for a reason.
Be there for your kids. Say yes. Say yes as much as you can.
What would I tell my twenty-year-old self? Stay away from dope and stay away from booze. Because you have a tendency to go too far.
I’ve been in recovery a day at a time for a long time now. All I know is what works for me: staying out of the wine aisle in Publix.
They say that you don’t go to a whorehouse to listen to the piano player, and if you hang around the barbershop, sooner or later you’re going to get your hair cut. So I try to stay away from temptation.
I like to use my imagination. I like to go for walks. I dig the world in general.
Ten percent of my tweets are political because every now and then, I just get so irritated about something. It doesn’t change anybody’s mind, but it’s good to be able to say it. In the meetings that I go to, we say, “You have to claim your chair.” Sometimes I feel like, yeah, I have to claim my chair.
There’s this saying that if you’re not a liberal in your teens, you don’t have a heart, and if you’re still a liberal in your twenties and thirties, you don’t have a brain.
I think that, actually, if you’re a liberal in your teens, you probably don’t have a brain. And if you’re not a liberal by the time you’re in your thirties and forties, you don’t have a heart.
If you ask what I learned from my accident, it would be: Number one, stay on the sidewalk. I was walking in the country, and the guy came over the hill and hit me.
Other than that, you learn about pain. But it doesn’t do any good, because you forget. The body has a way of forgetting the trauma. I suffered a lot, and the writing helped me because it took me away. That’s probably a healthy thing. You don’t want to live your life in a defensive crouch.
I can cook fish a thousand different ways, but I’m also one hell of a breakfast cook. I make a great cheese omelet.
I’d like to be known as somebody who died merry—who did his work as best as he could and was decent to other people.
I think what people will say is “This is the scary guy—the guy who wrote the horror novels.” But I’d like to be known as somebody who was just a decent human being.