i.want.world

banking.economics.sustainability and other shiny stuff

  • beware of STORIES

    • 11 Jan 2012
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    • prediction stories
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  • and on weather forecasts

    • 13 Dec 2011
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    • prediction randomness weather
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    Hope you did by now take this logical shortcut in concluding that weather forecasting is a crapshoot. Case in point: two hurricane forecasters admit that while their models fit beautifully in hindsight, they were incapable of predicting the future.

    Two top U.S. hurricane forecasters, revered like rock stars in Deep South hurricane country, are quitting the practice because it doesn’t work.

    William Gray and Phil Klotzbach say a look back shows their past 20 years of forecasts had no value.

    The two scientists from Colorado State University will still discuss different probabilities as hurricane seasons approach — a much more cautious approach. But the shift signals how far humans are, even with supercomputers, from truly knowing what our weather will do next.

    Gray, recently joined by Klotzbach, has been known for decades for an annual forecast of how many hurricanes can be expected each official hurricane season (which runs from June to November.) Southerners hang on his words, as even a mid-sized hurricane can cause billions in damage.

    Last week, the pair dropped this announcement out of a clear, blue sky:

    “We are discontinuing our early December quantitative hurricane forecast for the next year … Our early December Atlantic basin seasonal hurricane forecasts of the last 20 years have not shown real-time forecast skill even though the hindcast studies on which they were based had considerable skill.”

    I've maintained in fact that any type of forecasting is a waste of energy. They are mere useless publishing of empty suit experts who should be storytellers. I salute Klotzbach and Gray for their integrity.

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  • Just a Freak of Luck

    • 7 Sep 2011
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    • arts luck prediction risk thinking
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    How lucky do you think you are? Damn very lucky if you consider the amount of humans that had to procreate on your behalf for you to currently take up breathing space. However, let us consider the near past. The past that is your lifetime up until now. Do you think you have any special talent that you believed has risen you in the pecking order of life? How is success represented in your profession? To me, it is of utmost ludicrous to think that some sort of unique talent caused a person success in the extreme professions. 'Extreme' in the sense that input in the tasks of said profession does not correlate with the economic gains attained as output. Examples of such professions include writers, musicians, venture capitalists, artists and actors; they are career undertakings that are scalable. They allow you to add additional zeroes to your output and income with little to no effort. Whereas if you are a consultant, a dentist or an accountant, you are paid by the hour and your revenue depends on your continuous effort more than on the quality of your decisions.

    They are also within predictability's reach. If you are a hemorrhoid specialist or a prostitute, you know if you double the amount of clients you see, this effort will also double your revenue. Nevertheless, you are limited. You can only see a maximum number of patients within a given time frame. It is not scalable. My argument is, in the extreme professions or idea professions, neither talent nor skills can be ascertain nor is talent a precursor to success. Inequality rules in idea professions and your success depends solely on randomness.

    Let us carry out a thought experiment. Say you gather 100 people across the world randomly and line them up by height from shortest to tallest. You do an average and some other statistical methods on your sample. After your calculations, I would say that you now have an idea of the height of all humans on the planet. A person being as tall as 50 meters is close to impossible. No one in your sample size will represent more than 1 percent of the total height. You can do the same for weight. Take the heaviest human you know and line up 99 randomly chosen humans. Again, if he may be even considered human, he would be a slight deviation from the total. Increase you sample size to say, one thousand, then his weight becomes less than 1 percent.

    Now lets take again one thousand people randomly and add Waren Buffet to the sample. How much do you think his wealth would represent from the total wealth of all the others? About 99.9 percent. The others in the sample would merely represent a rounding error or the fluctuations of his portfolio during a trading day. In the physical world, when your sample size becomes large enough, no single occurrence can significantly change the aggregate. However, while height and weight are physical matters, wealth and all other social aspects are abstract and they serve only to relay information. They are nothing but numbers and as such they can take any single value without energy expenditure. This fact alone allows us to have the J. K. Rowlings of the world. The winner takes all effect in the idea professions. Where, with the advent of technology, one person or one idea can dominate the field. Where the formation of unexpected giants takes root while surrounded by tiny dwarfs.

    Let us dive deeper into the mater and see how does this relate to talent. In the good old days in Italy, if you wanted to hear Paganini play his Caprice No. 24 in A minor, you would have to travel to wherever he was at the time. Perhaps he had a performance coming up in Vienna or in Paris. It was only possible to hear him while he performed. Likewise, Paganini had to always perform in order to gain that one extra lira just as today a surgeon is (still) needed to be present in order to perform an operation. Paganini was never bothered by some other gifted violinist from far away who threatened his livelihood. Fast forward to current times however, Paganini is dead but Akiko Meyers has access to a new form of technology which allows her to record Paganini's Caprice No. 24 in A minor for others to purchase. Her performance can be heard individually by millions without any additional effort. I can go to a store and buy her DVD for $16.99. Meanwhile, a brilliant prodigy, recent graduate from Julliard also has recorded Paganini's most famous work and sells her performance for a bargain at $5.99.

    In any case, I would still rather listen to Meyers' take on the piece. If you were to ask me why, I would go on to tell you that it's Meyers' 'passion', 'rhythm' and the perfectly blended combination of both 'finesse' and 'bravura'. This is what I will tell my friends when I recommend Meyers to them. I have never heard the prodigy, recent graduate play and I will never hear her play so I will never know. She plays just as well but she did not make it to the stage. This phenomena implies the idea that those who, for some reason, start getting the attention of some minds can quickly garner more minds and dislodge the competition from the stage. The success of artists, movies, actors, ideas, and even your own DNA depends on contagion. People do not fall in love with works of art because of its own sake but rather to feel that they belong to a community. We imitate to get close to others. We imitate to fight solitude.

    When we sit back and observe the successful movies or fashion designers, we would form a sample and gather the evidence we need in order to find the patterns that stick out. We formulate theories and come to conclusions. Yet we always forget about the ones who do not show up in the sample. The silent actors who still wait tables and have yet to receive their breakthrough. The silent musicians who call their guitar cases home but who can easily rock out a stadium. All endeavors that harbor the winner take all effect are plagued with these silent characters, plagued with silent evidences. The cemetery of aspiring writers is immense. Comparative talent thus becomes impossible to gauge. I may say that Meyers has 'passion' and 'rhythm' and this is her attributes; the superior qualitative talents that will make you successful. But what if there are hundreds more with these same qualities? Meyers would thus become a beneficiary of disproportionate luck. I only need one other to exist to say that talent has absolutely nothing to do with success.

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  • You believe the rooster's crowing causes the sun to rise

    • 1 Aug 2011
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    • arts contagion prediction
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    A decade ago, I once found myself staring at an apple for what seemed to be hours. I believed that I was capable of psychokinetically moving the apple across the table or somehow with enough brain energy I could by thought alone make this adorable looking fruit defy gravity. I created what I thought was a séance ambiance with dark curtains, light candles and I got to work very early in the morning.  I had everything ready and planned. I had the backings of Graham Bell and John Baird who were distinguished scientists who believed in spiritualism and were convinced of psychokinesis. With all my brain power and motivation, I was however unable to do anything but silently stare. I came away with the feeling that somehow I was taken as a fool.

    I undertook what to me seemed a perfect reproduction of an experiment, my first of this kind, but without the expected results.  Perhaps I just did not harbor the artful skill for such an experiment and I did not fully grasps the relating intimate minutiae for a first timer. I filed these thoughts away for some time. I became a skeptic of all things and thus my ethos was formed.  In the years that came, I had come to acquire the idea to make a distinction between science and scientists and to question every belief that I had and that was imposed on me.

    We are full of stories that tell us who we are. We have explanations for most of all things that our senses can pick up. We can elaborately define why we pick our profession, why the Mona Lisa is the worlds most 'beautiful' painting, why the Beatles were  so successful and why a new style suddenly virally spreads -  definitions of which make them explainable and thus predictable. When someone is  in a predicament, he would assign with great confidence a reason as to why he is in that situation. We strive to assign every element a category and chart the many aspects of human behavior - all activities that exist in order to remove surprises.  Life is very unusual; yet we are still capable of  flagging a culprit, conjuring up a narrative that clarifies to us why the world is so.

    The world is what we can't ever dream of it being. Imaging that the universe had a single formula that determines how everything is.   If someone were to hand to you the single determining formula of the working universe, you would know everything at present. You wouldn't need to make any future forecasts or claim that Facebook will change the way we interact with one another. It would have been already known and you would have had reacted to it accordingly.  This is the law in probability theory called the law of total expectation.  It defeats the idea of universal forecasts in all domains. It tells us that striving to attain a universal knowledge of all things will create a futureless world where all that can be known is known and where destiny plagues us all. Thankfully though, we do not live in a world of such.  The fact of the matter is: to be able to understand the future to the point of being able to predict it, you need to take into account elements from that future itself. My argument is that we are blinded by false narratives and seek out causations to explain facts when in fact we are merely inventing compact stories over raw random reality.

    To begin with, the story in the the first paragraph was a product of my imagination. I had no sudden realization and I didn't complete any ritual séance. I don't know how my ethos was formed. It is simply a narrative to portray an idea. I became me by being me. It is just simple as that. No explanations and no clarifications are neither wanted nor necessary. I am amazed at how people come up with stories to explain a certain event or even their mental state and circumstances. They say 'I am very emotional because I am Italian and we all Italians tend to be very emotional' or 'I became successful because I worked hard and I was the best in the company.' We are drowning in excrements of post hoc rationalization and we can not see it.

    Post hoc ergo propter hoc. You believe the rooster's crowing causes the sun to rise. A does not necessarily cause B even if B followed A. Fallacies of this type are mainly within the domain of psychologists. They conducted an experiment once with women where they asked each woman to select from amongst twelve pair of nylon stockings the ones they favored. The interviewers then asked the women their reasons for their choice. They explained that it was the texture, the 'feel', the shades of color differences, when in fact all the stockings were identical.

    Do you really know why the Beatles were so successful? How can someone have no clue yet able to muster up plausible viewpoints that match the observation and which can withstand all the rigor of the rules of logic? How about if you consider the fact that two different persons can hold very different beliefs when observing the exact same set of data. Does that mean that there are a multitude of ways and families of explanations which hold true? No, definitely not. You can have a million ways of explaining an event but at the end there's only one truth. That truth may not be reachable to us even if our explanation has the absence of nonsense. In the media, one certainly has heard of fact checkers; those journalists who pour over the facts with empirical rigor to get the right information to you. Yet they always put a spin on these facts with their narratives and give you the impression of causality - (knowledge). Where in the world are the intellect-checkers?

    When you are building a house, the more work you do, the more of the desired results you will see. If you put more money in the bank, you will earn more interest. Steady input in A leads to a steady output in B. That seems about fine in a primitive environment. Our co-evolution of our habitat and our brains, it seems, has lost pace. But were they ever in pace? Today, we live in a complex system of chaos (not to be confused with chaos theory). The world is nonlinear yet our intuition is not quite cut out for nonlinearities. Our modern reality does not deal in steady outputs. You are a scientist and everyday, for decades, you head to your laboratory with nothing to show for - no results. One day though, you find the cure for cancer.  You play the guitar everyday for years with no observable improvements then one day you find out you can shred. Try explaining this to your social friends who kept asking you how the guitar lessons were going over the years.

    So back to my question. Why were the Beatles so successful? I don't know. And I think I will certainly avoid people who think they know.

     

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  • prediction ludicrosity

    • 6 Jul 2011
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    • gaussian prediction quetelet random
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    In retrospect to my last post, we in the past have many times intuitively attempted to apply the science of physics to the social sciences. The predictability of physics harbors the fact that once a particular phenomenon was understood, it made an enticing promise to the physicians who would turn their attention to social science. Their goals were to elucidate the statistical laws of underlying social phenomena to characterize the individual in a societal structure - as Quetelet did with the Gaussian distribution.

    The question then arose, with enough mathematical ideas, one could susceptibly chart the many aspects of human behavior given rise to the notion of whether or not that freedom of choice for an individual was illusory. Even today, the application of physic theories to study social science is still based on the ridiculous erroneous impression that the approach would imply exact predictability of an individual's behavior. The notion of predictability in any human endeavor is ludicrous. In fact I would go so far to argue that theories of mathematical ideas that are derived even from physics have no universal truth.

    Our actions are irrational and we live in a random world. Our minds are not capable of dealing with the non-linearity of the real world. Yet we seek to find causality in all observations and adorn the people in blue suites who claim to know the GDP of a certain country for the next five years. These are my logical observations in an apparent false narrative filled world which I plan on to elaborate upon in a few essays.

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