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On Slowing Down

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Some startling statistics about our obsession with technology:

The average American spends at least eight and a half hours a day in front of a screen, Nicholas Carr notes in his eye-opening book “The Shallows,” in part because the number of hours American adults spent online doubled between 2005 and 2009 (and the number of hours spent in front of a TV screen, often simultaneously, is also steadily increasing).

The average American teenager sends or receives 75 text messages a day, though one girl in Sacramento managed to handle an average of 10,000 every 24 hours for a month. Since luxury, as any economist will tell you, is a function of scarcity, the children of tomorrow, I heard myself tell the marketers in Singapore, will crave nothing more than freedom, if only for a short while, from all the blinking machines, streaming videos and scrolling headlines that leave them feeling empty and too full all at once.

That’s from an op-ed “The Joy of Quiet” by Pico Iyer, who also notes that there are hotels that cite lack of access to internet and television as a selling point:

I noticed that those who part with $2,285 a night to stay in a cliff-top room at the Post Ranch Inn in Big Sur pay partly for the privilege of not having a TV in their rooms; the future of travel, I’m reliably told, lies in “black-hole resorts,” which charge high prices precisely because you can’t get online in their rooms.

In barely one generation we’ve moved from exulting in the time-saving devices that have so expanded our lives to trying to get away from them — often in order to make more time. The more ways we have to connect, the more many of us seem desperate to unplug. Like teenagers, we appear to have gone from knowing nothing about the world to knowing too much all but overnight.

In 2011, I’ve had the chance to unwind and go internet-free for a few days (at least several independent occasions). One of my resolutions for the coming year is to have more days where I unwind and slow down.

On the Complexity of Finance

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Steve Randy Waldman of Interfluidity has a very smart post outlining his thoughts to this question: why is finance so complex? He argues that, in fact, finance has always been complex. And not only that, finance has been opaque, and “complexity is a means of rationalizing opacity in societies that pretend to transparency.” Opacity in modern finance is a feature, not a bug. If you fully understood the risks of all your investments, he argues, you might be wary of investing…

Using examples from game theory (see stag hunt), Waldman continues:

Like so many good con-men, bankers make themselves believed by persuading each and every investor individually that, although someone might lose if stuff happens, it will be someone else. You’re in on the con. If something goes wrong, each and every investor is assured, there will be a bagholder, but it won’t be you. Bankers assure us of this in a bunch of different ways. First and foremost, they offer an ironclad, moneyback guarantee. You can have your money back any time you want, on demand. At the first hint of a problem, you’ll be able to get out. They tell that to everyone, without blushing at all. Second, they point to all the other people standing in front of you to take the hit if anything goes wrong. It will be the bank shareholders, or it will be the government, or bondholders, the “bank holding company”, the “stabilization fund”, whatever. There are so many deep pockets guaranteeing our bank! There will always be someone out there to take the loss. We’re not sure exactly who, but it will not be you! They tell this to everyone as well. Without blushing.

If the trail of tears were truly clear, if it were as obvious as it is in textbooks who takes what losses, banking systems would simply fail in their core task of attracting risk-averse investment to deploy in risky projects. Almost everyone who invests in a major bank believes themselves to be investing in a safe enterprise. Even the shareholders who are formally first-in-line for a loss view themselves as considerably protected. The government would never let it happen, right? Banks innovate and interconnect, swap and reinsure, guarantee and hedge, precisely so that it is not clear where losses will fall, so that each and every stakeholder of each and every entity can hold an image in their minds of some guarantor or affiliate or patsy who will take a hit before they do.

Opacity and interconnectedness among major banks is nothing new. Banks and sovereigns have always mixed it up. When there has not been public deposit insurance there have been private deposit insurers as solid and reliable as our own recent “monolines”. “Shadow banks” are nothing new under the sun, just another way of rearranging the entities and guarantees so that almost nobody believes themselves to be on the hook.

This is the business of banking. Opacity is not something that can be reformed away, because it is essential to banks’ economic function of mobilizing the risk-bearing capacity of people who, if fully informed, wouldn’t bear the risk. Societies that lack opaque, faintly fraudulent, financial systems fail to develop and prosper. Insufficient economic risks are taken to sustain growth and development. You can have opacity and an industrial economy, or you can have transparency and herd goats.

At the height of the financial crisis, so-called collateralized debt obligations (CDOs) were all the rage with investors. There were also CDOs on CDOs, dubbed CDO^2. This quote by Bank of England official Andrew Haldane illustrates the complexity of such a product:

To illustrate, consider an investor conducting due diligence on a set of financial claims: RMBS, ABS CDOs and CDO^2. How many pages of documentation would a diligent investor need to read to understand these products? Table 2 provides the answer. For simpler products, this is just about feasible – for example, around 200 pages, on average, for an RMBS investor. But an investor in a CDO^2 would need to read in excess of 1 billion pages to understand fully the ingredients.

Waldman’s post is worth checking out in entirety if you want to follow along the game theory examples. They’re fascinating.

Why is Movie Revenue Dropping?

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I read an article that sites how movie revenue is dropping in the United States:

US box office takings fell to a 16-year low in 2011 despite the success of blockbusters such as the latest in the Transformers, Twilight and Harry Potter series. Ticket revenue in the world’s largest movie market fell 3.5% to $10.2bn, while the estimated number of tickets sold dropped 4.4% to $1.28 billion, the lowest figure since 1995’s $1.26 billion.

Roger Ebert posits some theories on why he thinks movie revenue is dropping:

Ticket prices are too high. People have always made that complaint, but historically the movies have been cheap compared to concerts, major league sports and restaurants. Not so much any longer. No matter what your opinion is about 3D, the charm of paying a hefty surcharge has worn off for the hypothetical family of four.

The theater experience. Moviegoers above 30 are weary of noisy fanboys and girls. The annoyance of talkers has been joined by the plague of cell-phone users, whose bright screens are a distraction. Worse, some texting addicts get mad when told they can’t use their cell phones. A theater is reportedly opening which will allow and even bless cell phone usage, although that may be an apocryphal story.

Refreshment prices. It’s an open secret that the actual cost of soft drinks and popcorn is very low. To justify their inflated prices, theaters serve portions that are grotesquely oversized, and no longer offer what used to be a “small popcorn.” Today’s bucket of popcorn would feed a thoroughbred.

Competition from other forms of delivery. Movies streaming over the internet are no longer a sci-fi fantasy. TV screens are growing larger and cheaper. Consumers are finding devices that easily play internet movies through TV sets. Netflix alone accounts for 30% of all internet traffic in the evening. That represents millions of moviegoers. They’re simply not in a theater. This could be seen as an argument about why newspapers and their readers need movie critics more than ever; the number of choices can be baffling.

My reason for going to the theater less than I’ve ever gone before? Relatively expensive movie tickets and the ability to watch many of the movies I want via Netflix, albeit if I don’t mind their release to DVD/Blu-ray a few months after their opening in theaters.

Finally, I really like Ebert’s final reason:

Lack of choice. Box-office tracking shows that the bright spot in 2011 was the performance of indie, foreign or documentary films. On many weekends, one or more of those titles captures first-place in per-screen average receipts. Yet most moviegoers outside large urban centers can’t find those titles in their local gigantiplex. Instead, all the shopping center compounds seem to be showing the same few overhyped disappointments. Those films open with big ad campaigns, play a couple of weeks, and disappear.

Have you been going to the movies less this year than in years prior? What’s your primary reason?

The Fat Trap

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From the latest issue of New York Times Magazine, a discouraging statement for those of us trying to lose weight:

While researchers have known for decades that the body undergoes various metabolic and hormonal changes while it’s losing weight, the Australian team detected something new. A full year after significant weight loss, these men and women remained in what could be described as a biologically altered state. Their still-plump bodies were acting as if they were starving and were working overtime to regain the pounds they lost. For instance, a gastric hormone called ghrelin, often dubbed the “hunger hormone,” was about 20 percent higher than at the start of the study. Another hormone associated with suppressing hunger, peptide YY, was also abnormally low. Levels of leptin, a hormone that suppresses hunger and increases metabolism, also remained lower than expected. A cocktail of other hormones associated with hunger and metabolism all remained significantly changed compared to pre-dieting levels. It was almost as if weight loss had put their bodies into a unique metabolic state, a sort of post-dieting syndrome that set them apart from people who hadn’t tried to lose weight in the first place.

“What we see here is a coordinated defense mechanism with multiple components all directed toward making us put on weight,” Proietto says. “This, I think, explains the high failure rate in obesity treatment.”

While the findings from Proietto and colleagues, published this fall in The New England Journal of Medicine, are not conclusive — the study was small and the findings need to be replicated — the research has nonetheless caused a stir in the weight-loss community, adding to a growing body of evidence that challenges conventional thinking about obesity, weight loss and willpower. For years, the advice to the overweight and obese has been that we simply need to eat less and exercise more. While there is truth to this guidance, it fails to take into account that the human body continues to fight against weight loss long after dieting has stopped. This translates into a sobering reality: once we become fat, most of us, despite our best efforts, will probably stay fat.

As with many preliminary studies, the evidence is inconclusive. Yet, if it pans out, dieting and exercise books will have to be re-written.

The Superpower of Being Alone

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I stumbled upon “My Superpower is Being Alone Forever” in the Awl after perusing the best #longreads chosen by Edith Zimmerman, a writer and co-editor of The Hairpin. Joe Berkowitz writes about online dating, its repercussions, and why some of us are still single:

Putting together a dating profile means performing a self-autopsy and reassembling the pieces into Sexy Robocop. You save what’s worth salvaging and shield the damaged parts with reinforced metal. You strive to find the middle ground between showing you have nothing to hide, and just showing off. You carefully curate your interests as if they were co-op displays in a Barnes & Noble, reveling in the understated complexity of liking both Nicki Minaj and My Bloody Valentine. Your picture gallery broadcasts a series of defensive messages: “See? Other females aren’t afraid of me.” “See? I go to museums sometimes and mimic sculpture-poses because Culture.” “See? I’ve been to a Halloween party so obviously I don’t spend much time alone, crying to The Cure’s Disintegration LP and drinking wine from a can.” Dating profiles reveal more about how you see yourself than how you really are, and more about how you want to be seen than how you will be.

With infinite choice comes infinite opportunities to judge. The more options that exist, the pickier you become. Scrolling through profile after profile, I am transformed into an imperial king, surveying his goodly townsfolk from a balcony on high. Those with minor perceived flaws are summarily dismissed (“Next!”) because surely someone closer to the Hellenic ideal is just around the corner. Anyone cute might be cast aside for the smallest breach of taste: a penchant for saying things like “I love life and I love to laugh” or self-identifying as “witty.” Yet even when I genuinely find myself attracted to someone, I’ll still react with skepticism. What’s the catch? What dark and terrible secret causes her to resort to this thing I am also doing? After scanning closely for red flags and finally deigning her regally worthy, I dispatch a message. But then the truth reveals itself: the king is not her type and also he is not really a king.

No piece on online dating would be complete without a mention of OKCupid:

Everyone has a friend who is so charismatic, brilliant or good-looking that the idea of him or her trolling OKCupid is mind-boggling. I am haunted by those friends. What is it that separates us? Is it gluten? I’m at peace with the fact that Drake sings about how jaded he is from being constantly propositioned by beautiful women—because Drake is crazy-famous. My friends who’d never be mistaken as online daters are not famous, but they also possess some ineffable quality that makes them forever F-able. As far as our social sphere is concerned, they might as well be Drake (or nearest female equivalent): They’re stars, and finding them on a dating site would create cognitive dissonance of Orwellian proportions. Personally, I’ve never felt as spectacularly anonymous as I have as an online dater, united with everyone else on the site in that we all have a reason to be there. I can rationalize about Internet dating for days. I can think up reasons for why the way my grandparents met is outmoded. But I don’t want any woman to think she was my last resort, and I don’t want to imagine that I was hers. When we say, “I’m so glad we found each other,” I don’t want it to refer to the way we had to find each other like hidden files in a hard-drive search.

I highly recommending clicking over to the original article to see Joanna Neborsky’s wonderful illustrations accompanying the piece.

Social Media During the Reformation, or How Luther Went Viral

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It’s hard to put the words “social media” and “Reformation” together, yet this brilliant piece in The Economist explains how Martin Luther’s 95 Theses went viral.

Although they were written in Latin, the “95 Theses” caused an immediate stir, first within academic circles in Wittenberg and then farther afield. In December 1517 printed editions of the theses, in the form of pamphlets and broadsheets, appeared simultaneously in Leipzig, Nuremberg and Basel, paid for by Luther’s friends to whom he had sent copies. German translations, which could be read by a wider public than Latin-speaking academics and clergy, soon followed and quickly spread throughout the German-speaking lands. Luther’s friend Friedrich Myconius later wrote that “hardly 14 days had passed when these propositions were known throughout Germany and within four weeks almost all of Christendom was familiar with them.”

The unintentional but rapid spread of the “95 Theses” alerted Luther to the way in which media passed from one person to another could quickly reach a wide audience. “They are printed and circulated far beyond my expectation,” he wrote in March 1518 to a publisher in Nuremberg who had published a German translation of the theses. But writing in scholarly Latin and then translating it into German was not the best way to address the wider public. Luther wrote that he “should have spoken far differently and more distinctly had I known what was going to happen.” For the publication later that month of his “Sermon on Indulgences and Grace”, he switched to German, avoiding regional vocabulary to ensure that his words were intelligible from the Rhineland to Saxony. The pamphlet, an instant hit, is regarded by many as the true starting point of the Reformation.

You probably learned in your world history class that the 95 Theses were a precursor to the Reformation. So why did Luther’s message spread?

Unlike larger books, which took weeks or months to produce, a pamphlet could be printed in a day or two. Copies of the initial edition, which cost about the same as a chicken, would first spread throughout the town where it was printed. Luther’s sympathisers recommended it to their friends. Booksellers promoted it and itinerant colporteurs hawked it. Travelling merchants, traders and preachers would then carry copies to other towns, and if they sparked sufficient interest, local printers would quickly produce their own editions, in batches of 1,000 or so, in the hope of cashing in on the buzz. A popular pamphlet would thus spread quickly without its author’s involvement.

As with “Likes” and retweets today, the number of reprints serves as an indicator of a given item’s popularity. Luther’s pamphlets were the most sought after; a contemporary remarked that they “were not so much sold as seized”. His first pamphlet written in German, the “Sermon on Indulgences and Grace”, was reprinted 14 times in 1518 alone, in print runs of at least 1,000 copies each time. Of the 6,000 different pamphlets that were published in German-speaking lands between 1520 and 1526, some 1,700 were editions of a few dozen works by Luther. In all, some 6m-7m pamphlets were printed in the first decade of the Reformation, more than a quarter of them Luther’s.

Another interesting point is that the spread of Luther’s message wasn’t limited to printed media:

It was not just words that travelled along the social networks of the Reformation era, but music and images too. The news ballad, like the pamphlet, was a relatively new form of media. It set a poetic and often exaggerated description of contemporary events to a familiar tune so that it could be easily learned, sung and taught to others. News ballads were often “contrafacta” that deliberately mashed up a pious melody with secular or even profane lyrics. They were distributed in the form of printed lyric sheets, with a note to indicate which tune they should be sung to. Once learned they could spread even among the illiterate through the practice of communal singing.

The piece is interesting throughout, and has a very good conclusion: Today’s social-media systems do not just connect us to each other: they also link us to the past.

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Question for the reader: what other events/messages in history, do you think, spread virally in a similar fashion? I can think of a few.

The Top Five Longreads of 2011

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One year ago today, I published my post on the best longreads of 2010. Today, I bring you my list of the best longreads of 2011. It’s been another amazing year for long-form journalism, and it’s hard to whittle down the list to just five entries. Nevertheless, these five pieces stood out in my mind:

(1) “The Man Who Played Rockefeller” [Wall Street Journal] – first highlighted in this post, I wrote: “riveting, at times unbelievable, account of how a German-born Christian Karl Gerhartsreiter came to the United States at the tender age of 17 and proceeded to climb up the ranks of society. But he did it through conniving tactics, playing cool, and always acting the impostor.” It is already on my short list for best long read of the year.

When he entered the magnificent Gothic church in early 1992, the former Christopher Crowe had a new name and a meticulously researched persona to go with it. “Hello,” he greeted his fellow worshippers in his perfectly enunciated East Coast prep-school accent, wearing a blue blazer and private-club necktie, which he would usually accent with khaki pants embroidered with tiny ducks, hounds or bumblebees, worn always with Top-Sider boat shoes, without socks. “Clark,” he said, “Clark Rockefeller.”

(2) “The Assassin in the Vineyard” [Vanity Fair] – I am a huge fan of reads that involve mystery, espionage, and crime. This piece by Maximillian Potter, which I first highlighted here, is far and away one of the most thrilling short reads I’ve read in 2011. In that post I wrote:

The gist of the story: La Romanée-Conti is a small, centuries-old vineyard that produces what most agree is Burgundy’s finest, rarest, and most expensive wine. But when Aubert de Villaine received an anonymous and sophisticated note, in January 2010, threatening the destruction of his heritage, unless he paid a 1 million euro ransom, he did not treat it seriously at first. Who was the mastermind behind this crime? And did the criminal get caught? All is revealed in the article…

Thoroughly engaging and entertaining read.

(3) “The Epidemic of Mental Illness” (Part I) and “The Illusions of Psychiatry”(Part 2) [New York Review of Books] — this two part series, written by Marcia Angell changed my perspective on depression, the medicine used to treat it, and the field of psychiatry in general. I point out both reads because they are meant to be read in order (Part I then Part II).

Reviewed in Part I are books by  Irving Kirsch, Robert Whitaker, and Daniel Carlat. A notable paragraph of skepticism from Part I:

Do the drugs work? After all, regardless of the theory, that is the practical question. In his spare, remarkably engrossing book, The Emperor’s New Drugs, Kirsch describes his fifteen-year scientific quest to answer that question about antidepressants. When he began his work in 1995, his main interest was in the effects of placebos. To study them, he and a colleague reviewed thirty-eight published clinical trials that compared various treatments for depression with placebos, or compared psychotherapy with no treatment. Most such trials last for six to eight weeks, and during that time, patients tend to improve somewhat even without any treatment. But Kirsch found that placebos were three times as effective as no treatment. That didn’t particularly surprise him. What did surprise him was the fact that antidepressants were only marginally better than placebos.

I thought I’ve read a fair amount of skepticism in Part I. And then I read “The Illusions of Psychiatry,” which totally transplanted my thoughts on psychiatry from one mindset to another.

While Carlat believes that psychoactive drugs are sometimes effective, his evidence is anecdotal. What he objects to is their overuse and what he calls the “frenzy of psychiatric diagnoses.” As he puts it, “if you ask any psychiatrist in clinical practice, including me, whether antidepressants work for their patients, you will hear an unambiguous ‘yes.’ We see people getting better all the time.” But then he goes on to speculate, like Irving Kirsch in The Emperor’s New Drugs, that what they are really responding to could be an activated placebo effect. If psychoactive drugs are not all they’re cracked up to be—and the evidence is that they’re not—what about the diagnoses themselves?

(4) “Gilad Shalit and the Rising Price of an Israeli Life” [New York Times] – of all the longreads I’ve read this year, I think this one most likely escaped a lot of people’s radar. The story is about Gilad Shalit, an Israeli soldier who was captured by Hamas in June 2006 and didn’t gain his release from captivity until October of this year. The author of the piece, Ronen Bergman, offers why he is an authority on writing about this controversial subject:

I have covered Israeli hostage and M.I.A. cases for more than 15 years, including the covert ways in which Israel’s powerful espionage agencies operate to bring soldiers home alive or dead. Over that time, the issue has come to dominate public discourse to a degree that no one could have predicted. Israeli society’s inability to tolerate even a single soldier held in captivity results in popular movements that have tremendous impact on strategic decisions made by the government. The issue has become a generator of history rather than an outcome of it.

Perhaps more than any other issue in the last five years, the politics behind negotiating the release of Gilad Shalit embroiled the country of Israel. This is a must-read piece that offers an eye-opening perspective.

(5) “The Man Who Sailed His House” [GQ] – Michael Paterniti writes a remarkable story of a Japanese man named Hiromitsu who survived the March 11 earthquake and subsequent tsunami. Not only is the story incredible, but so is the narration (you here are this man, experiencing the catastrophe in the present):

At two forty-six, something rumbles from deep in the earth, a sickening sort of grinding, and then everything lurches wildly, whips back, lurches more wildly still. The cut boards stacked along the wall clatter down, and your first move is to flee the shed, to dive twenty feet free onto open ground and clutch it, as if riding the back of a whale. Time elongates. Three minutes becomes a lifetime.

When the jolting ends, stupefaction is followed by dismay—and then a bleary accounting. Already phones are useless. The boss, Mr. Mori, urges you to rush home to check on your wife and parents, but fearing a tsunami, fearing a drive down into the lowlands by the sea, and trusting the strength of your concrete house to protect your wife and parents, you at first refuse. There are ancient stone markers on this coast, etched warnings from the ancestors, aggrieved survivors of past tsunamis—1896, 1933—beseeching those who live by the water to build on the inland side of their hubris or suffer the consequences.

Originally featured in this post.

I think 2011 was another excellent year for long-form journalism. I highly recommend checking out the Longreads Tumblr for more “Best of 2011 in Longreads” posts. Finally, check out my #longreads tag on this blog for more reading.

Your Credit Score and Social Media

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Well, this is slightly unnerving. In a BetaBeat post titled “As Banks Start Nosing Around Facebook and Twitter, the Wrong Friends Might Just Sink Your Credit,” we learn about a new wave of start-ups that is…

working on algorithms gathering data for banks from the web of associations on the internet known as “the social graph,” in which people are “nodes” connected to each other by “edges.” Banks are already using social media to befriend their customers, and increasingly, their customers’ friends. The specifics are still shaking out, but the gist is that eventually, social media will account for at least the tippy-top of the mountain of data banks keep on their customers.

“There is this concept of ‘birds of a feather flock together,’” said Ken Lin, CEO of the San Francisco-based credit scoring startup Credit Karma. “If you are a profitable customer for a bank, it suggests that a lot of your friends are going to be the same credit profile. So they’ll look through the social network and see if they can identify your friends online and then maybe they send more marketing to them. That definitely exists today.”

And in the last year or so, financial institutions have started exploring ways to use data from Facebook, Twitter and other networks to round out an individual borrower’s risk profile—although most entrepreneurs working on the problem say the technology is three to five years away from mainstream adoption.

Here’s what I am thinking. If you have a solid credit rating, then exposing your social media outlets could potentially hurt you. On the other hand, these algorithms may be devised such that you take a bigger hit if you don’t divulge your information. If you have a poor credit rating but a strong network of friends, then divulging your social media crumbs could help you in your overall credit score. One thing is for certain, however: if there is any way that a bank could find out more information about you to better predict your ability to repay a loan, the more aggressively it will try to implement the schema into its arsenal of judging your credit score.

We live in a brave new world.

Jon Corzine and the Romance with Risk

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By now, I’ve read dozens of articles about Jon Corzine and the fall of MF Global. But I think this piece in Dealbook is a best all-around explainer about Jon Corzine and his appetite for risk:

[Jon Corzine] pushed through a $6.3 billion bet on European debt — a wager big enough to wipe out the firm five times over if it went bad — despite concerns from other executives and board members. And it is now clear that he personally lobbied regulators and auditors about the strategy.

His obsession with trading was apparent to MF Global insiders over his 19-month tenure. Mr. Corzine compulsively traded for the firm on his BlackBerry during meetings, sometimes dashing out to check on the markets. And unusually for a chief executive, he became a core member of the group that traded using the firm’s money. His profits and losses appeared on a separate line in documents with his initials: JSC.

This seems like a surprise, however:

He was a popular manager, former employees say. An avuncular presence with a beard and sweater vest, he had a knack for remembering names. Even in the firm’s final hours, they recall that Mr. Corzine never lost his temper. His work ethic also impressed colleagues. He often started his day with a five-mile run, landing in the office by 6 a.m. and was regularly the last person to leave the office.

But the most mind-boggling revelation is that MF Global, through Jon Corzine’s insistence, shied away from implementing a rigorous risk management system at the firm:

Yet soon after joining MF Global, Mr. Corzine torpedoed an effort to build a new risk system, a much-needed overhaul, according to former employees. (A person familiar with Mr. Corzine’s thinking said that he saw the need to upgrade, but that the system being proposed was “unduly expensive” and was focused in part on things the firm didn’t trade.)

Risk management is perhaps the most important function for a bank/financial firm. There is no too steep a price to pay for having a system of checks and balances that would have caught MF Global’s downward spiral and perhaps have done something about it. I need not even mention the lost customer deposits that is now at the core of the investigation following MF Global’s bankruptcy.

On Investments and Time

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Paul Graham, in this essay from 2010, makes a great point on investments (both in terms of money and our use of time):

In most people’s minds, spending money on luxuries sets off alarms that making investments doesn’t. Luxuries seem self-indulgent. And unless you got the money by inheriting it or winning a lottery, you’ve already been thoroughly trained that self-indulgence leads to trouble. Investing bypasses those alarms. You’re not spending the money; you’re just moving it from one asset to another. Which is why people trying to sell you expensive things say “it’s an investment.”

The solution is to develop new alarms. This can be a tricky business, because while the alarms that prevent you from overspending are so basic that they may even be in our DNA, the ones that prevent you from making bad investments have to be learned, and are sometimes fairly counterintuitive.

A few days ago I realized something surprising: the situation with time is much the same as with money. The most dangerous way to lose time is not to spend it having fun, but to spend it doing fake work. When you spend time having fun, you know you’re being self-indulgent. Alarms start to go off fairly quickly. If I woke up one morning and sat down on the sofa and watched TV all day, I’d feel like something was terribly wrong. Just thinking about it makes me wince. I’d start to feel uncomfortable after sitting on a sofa watching TV for 2 hours, let alone a whole day.

And yet I’ve definitely had days when I might as well have sat in front of a TV all day—days at the end of which, if I asked myself what I got done that day, the answer would have been: basically, nothing. I feel bad after these days too, but nothing like as bad as I’d feel if I spent the whole day on the sofa watching TV. If I spent a whole day watching TV I’d feel like I was descending into perdition. But the same alarms don’t go off on the days when I get nothing done, because I’m doing stuff that seems, superficially, like real work. Dealing with email, for example. You do it sitting at a desk. It’s not fun. So it must be work.

With time, as with money, avoiding pleasure is no longer enough to protect you. It probably was enough to protect hunter-gatherers, and perhaps all pre-industrial societies. So nature and nurture combine to make us avoid self-indulgence. But the world has gotten more complicated: the most dangerous traps now are new behaviors that bypass our alarms about self-indulgence by mimicking more virtuous types. And the worst thing is, they’re not even fun.

Do you have days like the ones Paul describes? The day breezes by, and you seem like you’ve accomplished nothing?