Year: 2012

Michael Lewis on the Role of Luck

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Michael Lewis’s Liar’s Poker and Moneyball are some of my favorite books I’ve read in the last few years. So it was with delight that I read Lewis’s commencement speech to the most recent graduating class at Princeton. The speech is worth reading in entirety, but the core of the message is: people don’t give enough credit to luck in their success. Lewis makes it clear via his life narrative, because shortly after he published Liar’s Poker:

I was 28 years old. I had a career, a little fame, a small fortune and a new life narrative. All of a sudden people were telling me I was born to be a writer. This was absurd. Even I could see there was another, truer narrative, with luck as its theme. What were the odds of being seated at that dinner next to that Salomon Brothers lady? Of landing inside the best Wall Street firm from which to write the story of an age? Of landing in the seat with the best view of the business? Of having parents who didn’t disinherit me but instead sighed and said “do it if you must?” Of having had that sense of must kindled inside me by a professor of art history at Princeton? Of having been let into Princeton in the first place?

This isn’t just false humility. It’s false humility with a point. My case illustrates how success is always rationalized. People really don’t like to hear success explained away as luck — especially successful people. As they age, and succeed, people feel their success was somehow inevitable. They don’t want to acknowledge the role played by accident in their lives. There is a reason for this: the world does not want to acknowledge it either. 

Lewis also talks about Moneyball and exploiting underlying data:

If you use better data, you can find better values; there are always market inefficiencies to exploit, and so on. But it has a broader and less practical message: don’t be deceived by life’s outcomes. Life’s outcomes, while not entirely random, have a huge amount of luck baked into them. Above all, recognize that if you have had success, you have also had luck — and with  luck comes obligation. You owe a debt, and not just to your Gods. You owe a debt to the unlucky.

If you graduated from Princeton (or any college, for that matter), then Lewis’s point should be lucid by now:

[Y]ou must sense its arbitrary aspect: you are the lucky few. Lucky in your parents, lucky in your country, lucky that a place like Princeton exists that can take in lucky people, introduce them to other lucky people, and increase their chances of becoming even luckier.

Excellent.

Très Brooklyn in Paris

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The New York Times profiles a fascinating trend of the food truck invading Paris, France. Whereas the general notion is that American food consists of large portions and greasy food, in Paris:

…American food is suddenly being seen as more than just restauration rapide. Among young Parisians, there is currently no greater praise for cuisine than “très Brooklyn,” a term that signifies a particularly cool combination of informality, creativity and quality.

All three of those traits come together in the American food trucks that have just opened here, including Cantine California, which sells tacos stuffed with organic meat (still a rarity in France), and a hugely popular burger truck called Le Camion Qui Fume (The Smoking Truck), owned by Kristin Frederick, a California native who graduated from culinary school here.

Kristin Frederick, the owner, received pushback before opening:

“I got every kind of push-back… People said: ‘The French will never eat on the street. The French will never eat with their hands. They will never pay good money for food from a truck.’ ” (Her burger with fries costs 10 euros, about $13.)

So how well is the truck doing?

Since the truck’s opening day, Ms. Frederick said, it has sold every last burger on every shift. And it has received the kind of publicity most chefs can only dream about. Its first weeks were covered obsessively on the many English-language blogs — Hip Paris, David Lebovitz, Paris by Mouth and Lost in Cheeseland — that chronicle the food scene here.

Read the entire story here.

Innovations That Will Change Your Tomorrow

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The New York Times has an excellent infographic showcasing 32 inventions that “will change your tomorrow.” The presentation and text behind the inventions is excellent. Here are the ones that stood out in my mind:

#10: Doctor on Board.Your car is already able to call for help when an accident occurs, but within a few years, it’ll tip paramedics off to probable injuries too. E.M.T.’s would know the likelihood of internal bleeding or traumatic head injury, for example, before arriving on the scene, which would help them decide whether to move you to a Level 1 trauma center or a standard emergency room.

This one is a real surprise to me:

#16: Your Body, Your Login. A team of Dutch and Italian researchers has found that the way you move your phone to your ear while answering a call is as distinct as a fingerprint. You take it up at a speed and angle that’s almost impossible for others to replicate. Which makes it a more reliable password than anything you’d come up with yourself. 

Is a world without hangovers a good thing?

#20: A world without hangovers. Researchers at Imperial College London are closing in on a formula for a new kind of booze — synthetic alcohol, it’s called — that would forever eliminate the next morning’s headache (not to mention other problems associated with drinking). The team, led by David Nutt, a psychiatrist and former British drug czar, has identified six compounds similar to benzodiazepines — a broad class of psychoactive drugs — that won’t get you rip-roaring drunk but will definitely provide a buzz.

Fire extinguishers contain toxic chemicals, so:

#27. A new firefighter.According to the program’s manager, Dr. Matt Goodman, an electric field destabilizes the flame’s underlying structure rather than blanketing the fire to smother it. Eventually, the technology could be used to create escape routes or extinguish fires without damaging sensitive equipment nearby.

See all of the 32 inventions here. Excellent list and food for thought.

The Influence of Texas on Textbooks

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What happens in Texas doesn’t stay in Texas when it comes to textbooks. That’s the premise of this New York Review of Books piece on the Texas School of Education and its politics. It’s a good piece which highlights a broken system:

When it comes to meddling with school textbooks, Texas is both similar to other states and totally different. It’s hardly the only one that likes to fiddle around with the material its kids study in class. The difference is due to size—4.8 million textbook-reading schoolchildren as of 2011—and the peculiarities of its system of government, in which the State Board of Education is selected in elections that are practically devoid of voters, and wealthy donors can chip in unlimited amounts of money to help their favorites win.

And:

The Texas State Board of Education, which approves textbooks, curriculum standards, and supplemental materials for the public schools, has fifteen members from fifteen districts whose boundaries don’t conform to congressional districts, or really anything whatsoever. They run in staggered elections that are frequently held in off years, when always-low Texas turnout is particularly abysmal. The advantage tends to go to candidates with passionate, if narrow, bands of supporters, particularly if those bands have rich backers. All of which—plus a natural supply of political eccentrics—helps explain how Texas once had a board member who believed that public schools are the tool of the devil.

An example of revisionist book writing:

For the most part, however, the board seemed determined just to sprinkle stuff its members liked hither and yon, and eliminate words they found objectionable in favor of more appealing ones. Reading through the deletions and additions, it becomes clear that a majority of board members hated the word “democratic,” for which they consistently substituted “constitutional republic.” They also really disliked “capitalism” (see rather: “free enterprise system”) and “natural law” (“laws of nature and nature’s God”).

The conclusion of the piece:

Texas certainly didn’t single-handedly mess up American textbooks, but its size, its purchasing heft, and the pickiness of the school board’s endless demands—not to mention the board’s overall craziness—certainly made it the trend leader.

America’s Jobs Crisis

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Felix Salmon has a good post digesting the latest jobs report. It’s worth reading in entirety, but I like Felix’s idea for job creation in America:

The solution to this problem is nothing complex — the arbitrage is sitting there in the first chart, plain for all to see. The government can borrow at 1.45%: it should do so, in vast quantities, and invest that money back into the economy itself. Take a few hundred billion dollars and use it to fix our broken infrastructure, to re-hire all those laid-off teachers and firefighters, to provide some kind of safety net for the millions of Americans who have been out of work for more than a year. Even if the real long-term return on any stimulus package was zero, the nominal long-term return would be well over 1.45%, making the investment worthwhile.

To put it another way, not all crises look the same. Back in 2008-9, the fact that we were in a crisis was obvious, and it resulted in unprecedented levels of enormous coordinated actions between Treasury and the Fed. Now, however, when we look at the crisis-level spreads in the first chart, we don’t think “crisis” any more — and the sense of urgency that everybody felt in 2008-9 is long gone. How many more dreadful jobs reports do we need before it returns?

 

The Wi-Fi Blocking Wallpaper

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Worried about your neighbor stealing your Wi-Fi signal? You could go the encryption route, or you could wait for the Wi-Fi blocking wallpaper to come to market:

French researchers have developed wallpaper that’s designed to trap Wi-Fi signals, without interfering with radio or cellphone signals. It uses conductive ink containing silver crystals to to block a Wi-Fi router’s operating frequencies: your router should work as expected, but the signal won’t travel beyond the wallpaper’s boundaries. While currently only a prototype, researchers at the Grenoble Institute of Technology hope to make the wallpaper commercially available early next year.

No word on how much it will cost, but I am guessing it won’t be cheap. The other downside? For full protection, you’d have to cover your ceiling with it as well.

The Six-Year-Old in the National Spelling Bee

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This is a great story about Lori Anne Madison, a six-year old girl. She’s the youngest person ever to compete in the National Spelling Bee:

She is blonde and adorable and talks at 100 mph. In the last few weeks, she has won major awards in both swimming and math, but one accomplishment above all has made her an overnight national celebrity: This week, the precocious girl from Lake Ridge, Va., will be onstage with youngsters more than twice her age and twice her size as one of 278 spellers who have qualified for the Scripps National Spelling Bee.

Sounds like she’s destined to do great things:

She hit all her milestones early, walking and talking well before others in her playgroup. She was reading before she was 2. She swims four times a week, keeping pace with 10-year-old boys, and wants to be in the Olympics. When her mother tried to enroll her in a private school for the gifted, the headmaster said Lori Anne was just way too smart to accommodate and needed to be home-schooled.

But as far as interviewing goes? Lori had this to say: “I want to go back to being a kid and playing with my friends.”

On Apple’s Exponential Growth

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Blogger Horace Dediu was recently asked the following question for MacUser Magazine UK:

The exponential growth of Apple products has to end some time soon doesn’t it? How many high-income buyers for expensive products can there be left for Apple to target?

And this was Horace’s intelligent response:

Trying to calculate the limits to growth is futile. There are limits but they are not calculable and inaccurate estimates don’t offer any useful information.

In 1939 a total of 921 military aircraft were built in the United States. Five years later, in 1944, annual production was 96,318. A question could have been asked by an aviation analyst in 1939 about whether the American aircraft industry could grow. Aircraft, especially multi-engined ones used by the military were _extremely_ expensive. The reason an industry grew exponentially making extraordinarily expensive products was not because of organic demand but because the primary buyers engaged in a cataclysmic global war. In other words, there was a will to buy and hence there came a way to build. Therefore the answer to the question of sustainable growth comes not from an analysis of demand but from an analysis of the consequences of not growing. Not growing would have meant the end of many nation states.

Your question was framed by an implied market categorization: that buyers are either high-income or, presumably, low-income. This is a false dichotomy. Buyers are either needful of a job to be done or not. If the job is important enough, money will be found to hire a product. Sellers of products will also find ways to meet the demand through lower prices and increased capacity. Every product Apple makes used to be out of the reach of all consumers. Whether computers (portable or not), music players and professional grade software, voice recognizing personal assistant cellular phones and tablets are all luxuries or necessities is only a question of timing.

Highly recommend reading the full interview here.

The End of Moore’s Law

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Theoretical physicist Michio Kaku argues that the end of Moore’s Law is coming sooner than later:

Years ago, we physicists predicted the end of Moore’s Law that says a computer power doubles every 18 months.  But we also, on the other hand, proposed a positive program.  Perhaps molecular computers, quantum computers can takeover when silicon power is exhausted.  But then the question is, what’s the timeframe?  What is a realistic scenario for the next coming years?  

Well, first of all, in about ten years or so, we will see the collapse of Moore’s Law.  In fact, already, already we see a slowing down of Moore’s Law.  Computer power simply cannot maintain its rapid exponential rise using standard silicon technology.  Intel Corporation has admitted this.  In fact, Intel Corporation is now going to three-dimensional chips, chips that compute not just flatly in two dimensions but in the third dimension.  But there are problems with that.  The two basic problems are heat and leakage.  That’s the reason why the age of silicon will eventually come to a close.  No one knows when, but as I mentioned we already now can see the slowing down of Moore’s Law, and in ten years it could flatten out completely.  So what is the problem?  The problem is that a Pentium chip today has a layer almost down to 20 atoms across, 20 atoms across.  When that layer gets down to about 5 atoms across, it’s all over.  You have two effects.  Heat–the heat generated will be so intense that the chip will melt.  You can literally fry an egg on top of the chip, and the chip itself begins to disintegrate  And second of all, leakage–you don’t know where the electron is anymore.  The quantum theory takes over.  The Heisenberg Uncertainty Principle says you don’t know where that electron is anymore, meaning it could be outside the wire, outside the Pentium chip, or inside the Pentium chip.  So there is an ultimate limit set by the laws of thermal dynamics and set by the laws of quantum mechanics as to how much computing power you can do with silicon.  

You can watch the video here.

Soccer: World’s Most Corrupt Game

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A very good ESPN Magazine piece on the world’s most corrupt game, football (or soccer):

Here’s a mere sampling of events since the beginning of last year: Operation Last Bet rocked the Italian Football Federation, with 22 clubs and 52 players awaiting trial for fixing matches; the Zimbabwe Football Association banned 80 players from its national-team selection due to similar accusations; Lu Jun, the first Chinese referee of a World Cup match, was sentenced to five and a half years in prison for taking more than $128,000 in bribes to fix outcomes in the Chinese Super League; prosecutors charged 57 people with match fixing in the South Korean K-League, four of whom later died in suspected suicides; the team director of second-division Hungarian club REAC Budapest jumped off a building after six of his players were arrested for fixing games; and in an under-21 friendly, Turkmenistan reportedly beat Maldives 3-2 in a “ghost match” — neither country knew about the contest because it never actually happened, yet bookmakers still took action and fixers still profited.

Soccer match fixing has become a massive worldwide crime, on par with drug trafficking, prostitution and the trade in illegal weapons. As in those criminal enterprises, the match-fixing industry has been driven by opportunistic greed. According to Interpol figures, sports betting has ballooned into a $1 trillion industry, 70 percent of which is gambled on soccer. 

A lot more facts and figures here.