Mar

12

 This professor in my daughter's department at MIT is working on using viruses to build batteries. I found this article about it pretty interesting.

"The DNA of Materials"

Molluscs produce proteins which combine with ions of calcium and carbonate in seawater. This provides the material for them to make two types of crystals, which they assemble into layers to create an immensely strong composite structure.

As [Angela Belcher] looked out of the window one day while wondering about this, her gaze drifted to a periodic table of elements stuck on the wall. If an abalone has within its DNA the ability to code for the proteins needed to gather the materials to construct a shell, would it be possible to tinker with the DNA sequences in other creatures to gather some of the elements on the periodic table? In particular, Dr Belcher asked herself, could creatures build semiconductors like those used in electronic circuits?

Pitt T. Maner III adds: 

The ascidians (sea squirts, tunnicates) ability to concentrate vandium at 100x the level found in current seawater has always been an interesting evolutionary puzzle.

1. Check out the wikipedia article on vanadins

2. Here is some related recent research involving vanadyl compounds used to inhibit gastric cancer cell line.
3) Ascidians provide a fertile ground for studies in the field of natural products. Similar to sponges and bryozoans, many ascidians avoid predation or fouling by producing noxious secondary metabolites [48]–[52]. Because of these properties, numerous species of ascidians may thus be a potential source of new anti-cancer compounds [53], [54]. Trabectedin (earlier known as ecteinascidin-743, commercial name Yondelis®), a marine-derived alkaloid isolated from extracts of Ecteinascidia turbinate, is now being used in treatment of soft-tissue sarcomas [55], [56]. Antimalarial compounds have been isolated from the solitary ascidians Microcosmus helleri, Ascidia sydneiensis and Phallusia nigra [57], and numerous other compounds with anti-cancer, anti-viral and anti-bacterial capabilities are in various clinical trial stages by the pharmaceutical industry. The management and use of these organisms as sources of natural products is dependent, however, on understanding their taxonomy, the integrative basis of biology.

http://www.plosone.org/article/info%3Adoi%2F10.1371%2Fjournal.pone.0020657

Mar

12

 There are several things to be considered here. First, the aircraft. The Boeing 777 is one of the most reliable aircraft ever built. Only three of the aircraft hulls have been lost:

1. British Airways flight 38 crashed short of the runway at Heathrow on Jan 17, 2008 due to ice crystals in the fuel that clogged a heat exchanger and prevented the engines from delivering thrust at a critical point on the landing approach. This situation only occurred in certain Rolls Royce engines [Trent 800] and has since been resolved by a new design of the engine oil fuel flow heat exchangers and restrictions on the amount of time the aircraft is permitted to operate with fuel temperatures below -10 degrees Celsius. This can safely be disregarded as a possible cause in the Malaysia incident.

2. Last years highly visible Asiana 214 accident at San Francisco was due to pilot error and a failure to maintain proper airspeed on the landing approach — there was nothing wrong with the aircraft.

3. On July 29, 2011 an Egypt Air B777-200ER was destroyed in Cairo when a fire erupted in the cockpit while parked at the gate [Final Report, Egyptian Ministry of Civil Aviation 172 page PDF]. This was attributed to a probable electrical fault or short circuit involving the first officers oxygen mask delivery hose, but the cause was not conclusively proven. It resulted in a a Boeing Alert Service Bulletin that in turn prompted an Airworthiness Directive that "requires replacing the low-pressure oxygen hoses with non-conductive low-pressure oxygen hoses in the flight compartment." [2011-NM-279-AD 8 page pdf]

The Cairo incident is interesting in that a cockpit fire can cause catastrophic damage and result in the loss of the aircraft, see Swissair Flight 111. A cockpit fire could reasonably prevent the flight crew from communicating their situation with air traffic control especially if it was fed by oxygen and required prompt attention from both pilots.

There was some speculation about an electrical failure which may have been the cause of the disappearance as well as the cessation of communications. I seriously doubt this however, as the B777 is equipped with a RAM Air Turbine to generate sufficient power to run essential systems in the event of such a failure.

Also, it is possible that the aircraft, like Air France 447, was transmitting system diagnostic data to the airline (not air traffic control) via ACARS  (which could provide clues) but if this information exists, we haven't heard about it yet.

In this article in today's New York Times  Malaysian authorities have stated that radar data may indicate that the flight had "possibly attempted to turn back". As a radar controller, and a witness to the events of 9/11, I can state that if there is radar data available, even if the aircraft's transponder was shut off or disabled, one can make reasonable assumptions by linking any strong primary targets to the last beacon targets if they are consistent with the track or with the turn characteristics of that type aircraft at it's last known altitude and speed. This is exactly what air traffic control did when the transponders aboard American 11 were turned off. There were strong primary radar returns that began where the beacon returns ceased and they were certain that they were looking at American 11 as it turned south down the Hudson river and when it disappeared over Manhattan.

As we don't have access to any radar data that the Malaysians may have, we cannot make any statements about it other than what we hear from them.

If there was a change in course this could imply many things — the crew was distracted by something like a fire or severe problem with the aircraft or possibly a cockpit intrusion. The fact that nothing was communicated to air traffic controllers could also imply that the crew was either too busy and therefore unable to communicate or they were prevented from communicating by intruders.

It is certainly possible that the aircraft was hijacked. A loss of transponder returns would occur if hijackers were savvy enough to turn the transponder off and a change in course would be consistent with a hijacking. This aircraft was fueled for a long flight and if the aircraft was indeed taken by force, there is no telling how far or where they might have taken it.

There is also the possibility of some sort of catastrophic explosion. Possibly a bomb or dangerous or poorly stowed cargo. There are many precedents for cargo fires, Value Jet 592 comes to mind as does Federal Express 1406 [Accident Report, 147 page pdf] (This flight may be of particular interest to DailySpec readers as it was carrying,I am told by persons directly involved, on the order of 100 million dollars in federal reserve notes on their way to Boston to be taken out of circulation and destroyed.)

There has also been speculation of a possible crash/suicide by one of the pilots.

This too is not unprecedented, Silk Air 185, Egypt Air 990, and most recently LAM Mozambique 470 are all suspected to be murder-suicides by members of the flight crew.

Any of these scenarios may prove true. The search area is very, very large and if the aircraft went down in the water, it may take a long time to find debris. There should definitely be some identifiable debris — even if the aircraft exploded. Strangely, it may prove easier to find evidence of a crash in the sea than one on land. Floating debris will probably persist on the surface for some time, whereas a crash site in remote territory may be amazingly difficult to locate, especially if their was no fire or if the aircraft came down in small pieces. If this happened over dense jungle or forest, there is very little chance that it will be detected from the air.

I am just as anxious as the next person to know what truly happened. This will take some time, investigations cannot be rushed.

Pitt T. Maner III writes: 

There is an attempt to crowdsource the satellite imagery in order to remotely sense objects that might be related to the crash zone.

I have not seen this site before. In the oil industry "lineament analysis" of aerial and satellite imagery was used to try to find surface features that might be associated with potential subsurface geological structures.

So it is like looking for a small, anomalous linear feature–"needle in a haystack" as they say. Problem being that there are many linear features caused by breaking ocean waves, seafloor substrate, clouds, shadows and such.

It seems a computer program could also look for aligned pixels or anomalies and at multiple bandwidths.

Mar

11

 I read this article today and wondered if it will have applications in the financial sphere.


"Perjurers and fake reviews train software to spot lies":

LAWYERS and judges use skill and instinct to sense who might be lying in court. Soon they may be able to rely on a computer, too.

An AI system trained on false statements is highly accurate at spotting deceptive language in written or spoken testimony. It can also be used to weed out fake online reviews of books, hotels and restaurants."

Also, I found this new book on poker tells that also may be of interest: Reading Poker Tells

The poker tell is one of the most romanticized ideas in gambling, the notion that there is a code that will tell you everything about your opponent's hand just waiting to be unlocked. In reality, tells are usually more subtle than they are in the movies, but that doesn't mean there aren't some big, honkin' obvious ones. Here are some of the most transparent ones to ever make it onto television, and how to spot (or avoid making) them yourself. 

And here is the author's Twitter feed.

Mar

10

 Las Vegas is a very interesting city to visit and a pleasant surprise, outside of the gambling establishment and Strip areas. There are very reasonable prices for rooms and buffets and surrounded by many natural wonders within a day's reach.

Various cons, of course, are on display 24/7. While leaving the parking area I was approached by a vehicle with two men who wanted to offer me a fantastic deal on a 3-carat diamond that had recently come into their possession. "No thank you", I said and they quickly moved on without comment. A limo driver noted later that he had had an offer from a rich, turbaned man for his car (a red Cadillac) many years ago with payment to be made in 4 gold bricks. The driver checked two of the bricks with the local pawn shop and fortunately determined that they were worthless.

The city has its share of down and out transients but all in all the city vibe is positive and the energy associated with the arrival of NASCAR week and a huge display of construction-related equipment (excavators, trackhoes, platform lifts, various concrete pump trucks, etc. in the convention center–all supersized) was palpable.

A very spectacular, geologic structure, the Keystone thrust fault is located just west of town in the Red Rock Canyon Natural Conservation area. Hiking through this beautiful area with crossbedded ("herring bone") Aztec sandstone and red, Jurassic Kayenta Fm. One sees the many adaptations that plants and animals have evolved to collect and conserve water that comes during infrequent rains– and often in the form of raging, flash floods.

Fossils, despite promising intel from locals, however, are not easily found and only a few, small crinoid plates were noted during a long walk over a fossiliferous ridge south of the main park along horse and burro trails. It's a tricky business when you are walking along the Permio-Triassic extinction boundary!

A good museum on crime (as in "does not pay") is located downtown and aptly called the Mob Museum and graphically shows the typical end result of the "gangsta" lifestyle. Several hours did not do justice to the displays.

I was interested that Estes Kefauver held a session in the early 50s of his crime in America investigating committee (broadcast on national TV) in the same Mob Museum building. My grandfather once worked as a floor manager during one of Kefauver's presidential bids– and also for baseball commissioner, "Happy" Chandler in similar vein on other occasion.

The National Atomic Testing Museum was quite fascinating to visit although I did not pay the extra fee for the Alien Area 51 exhibit and focused instead on the historical displays of atomic and hydrogen bomb development. Trinitite was on sale in the gift shop but high prices for a tiny piece of fused glass held little appeal.

Skiing is available nearby and quite fun even for a cautious, green run specialist like me (the resort gives a free lesson for warmup purposes that helps the novice get reacquainted with skis)  And of course, the Death Valley area, is a mere 1.5 hour drive away and holds such unusual stops as Marta Becket's Amaragosa Opera House   and fantastic variegated colors at Zabriskie point.

Well I had to put $20 on the Florida basketball team (giving away a ridiculous 12 points to LSU) and by sheer luck (with perhaps a touch of insight about season-ending, home court propensity) walked away with $18.50 (after vig deduction) in order to leave Vegas, this time at least, a winner on all accounts.

Stick to the natural wonders, folklore and history and you will always win out West.

Feb

17

 The young middle bridge to Palm Beach is now lit in pink and red lighting at night for the Komen charity and Valentine's. It has an interesting history summarized as:

1) Spend oodles of money to restore the old bridge superstructure only to send divers down and find that the footings and supports were rotting from attack by marine organisms.
2) Build a temporary bridge by pile driving casing into the intracoastal sediments until bedrock was reached. Tremendous noise for months
3) Demolish old bridge.
4) Build new bridge.
5) Remove and demolish temporary bridge

Ah, yes, "lessons learned" and "your tax dollars at work". Attached is an interesting warning sign on the bridge. Those waiting for advice, signals and divinations from the sages, oracles, and other prophets take heed at the message. (it's real purpose is to prevent accidents around pinch points as the bridge is raised and lowered and to prevent interference with bridge tender operations).

Feb

17

 A good article (for Valentine's Day) on how a 900-year old rune inscription was deciphered that read "kiss me".

'Why did Vikings sometimes use codes when they wrote in runes? Were the messages secret, or did they have other reasons for encrypting their runic texts? Researchers still don't know for sure.

But Runologist K. Jonas Nordby thinks he has made progress toward an answer. He has managed to crack a code called jötunvillur, which has baffled linguists and historians for years.

His discovery can help researchers understand the purpose behind the mystery codes. "It's like solving a riddle," says Nordby.

"After a while I started to see a pattern in what appeared to be meaningless combinations of runes," he says. '

Jan

30

 I'm feeling inspired today by the camouflaging ability of the cuttlefish.

The cuttlefish uses an ingenious approach to materials composition and structure, one that we have never employed in our engineered displays," said coauthor Evelyn Hu, Tarr-Coyne Professor of Applied Physics and of Electrical Engineering at SEAS. "It is extremely challenging for us to replicate the mechanisms that the cuttlefish uses. For example, we cannot yet engineer materials that have the elasticity to expand 500 times in surface area. And were we able to do that, the richness of color of the expanded and unexpanded material would be dramatically different. Think of stretching and shrinking a balloon. The cuttlefish may have found a way to compensate for this change in richness of color by being an 'active' light emitter (fluorescent), not simply modulating light through passive reflection.

and

'Parker is an Army reservist who completed two tours of duty in Afghanistan, so using the cuttlefish to find a biologically inspired design for new types of military camouflage carries special meaning for him. Poor camouflage patterns can cost lives on the battlefield.

"Throughout history, people have dreamed of having an 'invisible suit,'" Parker said. "Nature solved that problem, and now it's up to us to replicate this genius, so, like the cuttlefish, we can avoid our predators."

"In Search of Nature's Camouflage"

Chris Tucker writes:

This 5 minute video has astounding footage of cuttlefish, octopi and squid blending into their environments.

The octopus footage at the end is particularly amazing. But I thought the squid was fascinating as it kept its warm cuddly colors on the side of his body that faced the female and the other side of his body colored to warn off other males and it flips as he swims to her other side. It's definitely worth taking the time to watch.

"Ted Talk: David Gallo Shows Underwater Astonishments"

Jan

20

 I wonder if the new technology 4D Geoseis would have applications in other parts of the world and if rights can be obtained that might make it useful as a business idea. For instance, in South Florida I know of a underground utility search company that uses radar, metal detectors, and other devices to look for buried lines before you dig (this is normally a free service from the individual utility companies for the lines leading into your property) on your property that used to charge about $700/day to send a trained technician and equipment to your site.

In the middle of Florida there are several companies that locate sinkholes or potential sinkholes (ie. Karst solution features) under properties and charge significant fees.

So a service that delineates potential fracture zones in high definition before a building or structure is constructed would seem to be very useful or perhaps information that insurance companies would like to know in advance.

As a general analogy to markets one might ask about or think of the potential fault zones that could "reactivate" and cause seismic shifts that have been inactive and buried for many years.

"Hollywood developments straddle earthquake fault, new maps show"

Hollywood building

Jan

2

Here is a Periodic Table of Asset Classes and Yearly Returns. It needs updating for 2013, but it's interesting to see how the Emerging Markets box moves from worst to best during several years (like Lithium, Li, volatile when exposed to air or water) or stays near the bottom (1994-1998) or top (2002-2007) over an extended time period.

Perhaps further detail would be useful to break out individual countries and sub-categories and stocks driving index returns and to make chart more interactive.

1. Callan Periodic Table of Investment Returns

2. Lithium

Jan

2

 My sun loving family has just completed its 13th RV school break drive out to Disney! As always, there was another family coming with us from NYC, but this time was different, thanks to emergence of TravelPony start-up in an unmistakably competitive cyber-travel industry. TravelPony says that billions are spent daily by the industry on advertising, but that they're a rebel who pays their customer direct for cyber referrals, to foster a word-of-mouth pyramid.

I'll share with the list what I did: I bid on a smaller RV this time to transport to FL, thus improving my fuel-economy by a third (10mpg vs 7mpg over the 1100-mile one-way). Additionally, AMEX had a tremendous 20% off gas just to sync your CC via twitter and enroll in BP award offer, which paid back $5 on every $25 fill-up thru 12/31/13. So all I had to do to fill my 55-gallon tank in VA and SC at $3.039 regular pump was to replace the nozzle 4-5 times, registering separate $25.01, $25.02, $25.03, $25.04, $25.05 AMEX charges. Mind you that Blue Cash card stacks 3% cash-back on top, and also enrollment in the regular BP program knocks further 10 cents/gallon: the secret to any TRUE deal is necessarily stackable discounts!

So my fuel bill this time was handily downsized, but now (with a 3-bed RV vs. our usual 4-bed RV) I had to lodge the guest family in Disney proximity — and that's where Travel Pony trotted in. I did this:

1. Have my guest family email their Topcashback.com referral link to my email addresses, so they would earn $15 Paypal cash for EACH of my Topcashback.com email address that spends it's way to an at least a $12 cash back reward.

2. Log into Topcashback.com and click thru to TravelPony for 4-10% cash back on hotel/taxes spend. Once travelpony site opens in separate window, replace it with my referral , where I get $25 travelpony spend credit for the first purchase that every referred email account completes.

3. As every email account Signs Up for a travelpony account through my link, they will each instantly get a $35 spend credit into each email-based account they create. I also provide them discount code VIPONY2013 for 10% off of the already competitive Travelpony hotel rates (which are 10-20% below Expedia, Travelocity, Priceline, Orbitz, hotel.com, booking.com and such to start with).

4. TravelPony listed named (not anonymous) three-star resorts in Disney area at $29-45 double queen room! With a few practiced clicks thru, one email account at a time and one room at a time, I managed to string up effectively an entire week of complimentary stays: just utilizing the initial $35 per travelpony email account credits, my own $25 travelpony referral credits, topcashback percentage, Topcashback $15 per account referral cash and cashback on CC programs. I'm always available for any travel question, and we are looking forward to Feb 15-24 President Week break, followed by Spring Break April 11-22.

Orlando weather was a real treat this Xmas: in every resort, we actually opted for non-heated pool+jacuzzi combination, avoiding the more crowded heated pools. Happy New Year everyone!

Dec

16

 American Scientist has a recent article on The Science of Seaweed. It is behind a paywall but it has an excerpt:

"The macroalgae collectively known as seaweeds are photosynthetic marine organisms that historically have enriched human beings ecologically, industrially, medicinally, nutritionally, gastronomically, and culturally. Excerpts from Ole G. Mouritsen's latest book sample these many benefits, showing the range of Mouritsen's self-confessed obsession with what began for him as a culinary delight. The biology and chemistry of these marine macroalgae is narrated with spotlights on Victorians' beachcombing and pressing specimens in England, the fascinating discovery of the red alga Porphyra's life cycle, Mouritsen's lone sojourn to the algae treasure trove hidden in the Natural History Museum of London, and a world-class chef's irresistible concoction of seaweed-flavored ice cream. "

But I see the entire, very interesting article at the following link that mentions that seaweed contains minerals in an abundance an order of magnitude higher than terrestrial plants.

Here is Dr. Mouritsen's new Seaweed cookbook . In it he proposes a new term: "gastrophysics"!

Dec

16

 There should be a study of whether time outs when a team is winning is better than time outs when a team is losing. Take basketball for example. Many spurts come with non-percentage and lucky threes in the minute by minutes of a game and between games. Often a team will win big with threes in one game and then lose big the next with the same strategy. Take the worst player like Smith. He won a few games at the beginning of last season and then lost dozens more with the same non-percentage play at the end. This compounded of course with his bad character— how do teammates let a player get away with partying late in the night before a play-off? And how does a persons' percentage on risky shots drop near the crucial ends of a game or playoffs when the adversaries pay it much closer and tougher?

Of course, this relates to markets. The time to quit is when you're way ahead not, when you're way behind. Take Jeff as an example. After creating untold profits with his trifecta on the grains last year, he's been quiet. Not only because of the illness in his family. But because he knows about ever changing cycles. And he knows that at Vegas, everyone has a stop loss when they lose too much. But never a stop gain when they make too much.

Steve Ellison adds: 

In last night's hockey game between the Boston Bruins and Vancouver Canucks, Canucks coach John Tortorella called time out early in the second period immediately after the Bruins scored to tie the game, 1-1 (a Canucks defenseman muffed a pass back, and a Bruins player snatched the puck and scored on a breakaway). He was visibly angry and shouting at his players during the time out. Whether by coincidence or not, the Canucks scored within minutes to retake the lead and never looked back as they eventually won, 6-2:

"'There was a lot of emotion. He just wanted the boys to get going,' said Canucks winger David Booth of Tortorella's impassioned words early in the second." 

anonymous writes: 

 For what it's worth, this is a brief exploration of short and mid-term timeout effects on basketball scoring according to situational variable.

Abstract

The aim of this study was to identify the effects of timeouts on Basketball teams' performance differences, as measured by points scored by the team that calls a timeout and points scored by the opponent team according to game location, the quality of the opponent and the game quarter. Sixty games were analysed using the play-by-play game-related statistics from the Asociación de Clubes de Baloncesto (ACB) League in Spain (2009–2010 season).

For each timeout, the points scored in the previous and post 3, 5 and 10 ball possessions were registered for the teams that called the timeout and for the opponents (nC6 and nB7, n22 andn19, n2 and n0 for 3, 5 and 10 ball possessions, respectively).

For the teams that called the timeout, the results reflected positive effects on points scored, with increases of 1.59, 2.10 and 2.29 points during the period within the third, fifth and tenth timeout ball possessions.

For the teams that have not called the timeout, the results identified timeout negative effects in points scored, during the period within the third and fifth ball possessions (decreases in points scored of 1.59 and 1.77, respectively).

Unexpectedly, the situational variables had little or no effects on points scored, which opens up this important topic for further studies and discussion.

Pitt T. Maner III adds: 

Time Outs in pro basketball are thought to favor the defense, allowing time to get set and also introducing the inbound play (and the potential for a steal). But as the writer of the following article notes there are lots of variables to consider (and you may want to call a TO quickly if Smith is dribbling down court on a 1 on 4 break).

Further testing may be needed. A couple of quotes:

"Call Time-Out? Not So Fast, Pro Coaches"

Said Stotts: "One thing I think is very difficult for basketball in comparison to football and baseball is those two sports have static events. There's an at-bat and something happens on that at-bat and you can quantify each at-bat and same thing with football with, even though there's 11 players on the field, you have a down and yardage each time and it's a very static event. Basketball is a free-flowing, with different matchups and different set of circumstances, perhaps every time down the floor."

and

'By utilizing play-by-play data from each game of the 2012-13 NBA season
(as well as computer skills far beyond my capabilities), it is possible
to determine what effect "prior events" have on a team's subsequent
shooting percentage. The excellent site NBAwowy.comhas this data for
each individual team. Aggregating all of this data allows one to draw
some very interesting conclusions league-wide, based on a sample of over
200,000 possessions throughout the season. At first blush, one
conclusion immediately leaped off the spreadsheet before any other:
Coaches should call timeout much less often after a change of
possession.'

Dec

5

 From the hallowed halls…but probably not limited to them these days. Perhaps related to the perceived importance of not upsetting the confidence of gifted students? Grade plunge protection? Grist for the academics:

"A little bird has told me that the most frequently given grade at Harvard College right now is an A-," Mansfield said during the meeting's question period. "If this is true or nearly true, it represents a failure on the part of this faculty and its leadership to maintain our academic standards."

Harris then stood and looked towards FAS Dean Michael D. Smith in hesitation.

"I can answer the question, if you want me to." Harris said. "The median grade in Harvard College is indeed an A-. The most frequently awarded grade in Harvard College is actually a straight A."

source

Richard Owen writes: 

This is an interesting phenomenon. In the UK, the current coalition have started to engineer grade deflation for pre-uni qualification. It seems somewhat unfair to those at the inflexion point. Perhaps instead grades should be given on a continuously rising index number, so just like money, it debases but still acts as a reasonable measure.

I do not know the reality, but given that at universities like Oxford (certainly pre-WW1) it was standard practice to arrange a place for your son or daughter and that a typist could be hired to write your final papers, the idea that standards have always been nosebleedingly high doesn't seem right. Indeed, the intake quality is probably as high as ever, given the internationalisation of educational institutions. 

Stefan Jovanovich writes: 

 As Richard knows, in the 19th century even faculty positions were allocated by social rank. His idea about an index is a marvelous suggestion; perhaps there could be a "mixed" educational economy in which people were allowed to buy grades or at least grade insurance and the underprivileged could get "extra" grades.

What is certain is that the schools will not allow anyone to set standard examinations. It would sabotage compulsory education (which now includes college attendance for anyone wanting a civil service or corporate job) if there were uniform measures of skills for which anyone could take tests and get scores.

James Bower writes: 

In graduate school there was a strict 3.25 curve for all courses. It was skewed (approx 30%, 50%, 15%, 5% other), but still there were only so many A's available. You would think teachers would/should create enough difficulty to create a wider distribution of outcomes.

Victor Niederhoffer writes: 

It is interesting to note that the last thing Artie did, the day before he died was to grade all the exams of his class, and give them all A's. Usually he only gave 85% of his class A's. What's so terrible about giving an A? The kid took the class, or played the piano or great music. It's beautiful. 

Dec

3

 In the September 5th, 2013 issue of nature, they have a nice article reviewing Batesian Mimicry, the kind where harmless and very good to eat butterflies mimic the appearance of poisonous ones to avoid being eaten. I have often pointed out that all the forms of deception that appear in nature have their counterparts in markets, and the study of such deception is one of the most useful things for the market operator to master. The nature article points out that that many microorganisms produce proteins that mimic the "form and function of host proteins to counter immune defenses." Pictures of innocuous bacteria and deadly viruses that appear identical accompany the article. They conclude: "it is exciting to consider how Bates's observations of rainforest butterflies might help to inform our understanding of infectious disease today". It is exciting to consider how the study of microscopic deception in the tick by tick prices might inform our understanding of deception in the larger spheres so endemic to market moves.

The same issue of Nature has such a loathsome article about plate tectonics saying that it shows that government funding is necessary for all scientific achievement, and that women and socialists made the key contribution to the spreading of the ocean floor and the reversals of magnetic polarity that led to plate tectonics, and that this same alliance is necessary for us to appreciate global warming that I wanted to throw my copy of nature out the window, and I did.

Pitt T. Maner III writes: 

Thank you, Vic. Here is an illustration from the issue you noted which displays the mimicry seen at the molecular level. Pretty amazing. And here is a cute one from the website of one of the authors.

Nov

22

 It is so frustrating to watch Smith create losses for the team, with their random one on one play, and only he and Melo shooting in the clutch that I've taken to listening on the radio rather than tv. Amazingly, the announcers on the radio are infinitely better than the tv, with Walt Frazier bringing up the rear on tv, with his ridiculous rhymes, "jiving and diving". Rather than commentary. Anyway, Spero on radio is sagacious. He routinely says things like, "the team that scores the last basket before an overtime, i.e. the catch up basket generally wins the overtime." Also, "when you shoot 3 fouls, there's a tendency to miss them much more than the percentages would show". Things like that should be tested in markets as they express highs and lows in human behavior.

Pitt T. Maner III writes: 

Just happened to watch the Knicks (6 straight losses at home) in the 4th quarter and in OT against Indiana the other night–it wasn't pretty. Shot selection was poor down the stretch and J.R. seems to have a knack for clanging critical shots. No comparison to the old days of Frazier, Bradley, Debusschere, Lucas, Reid, and the ever graceful, with bandaged knees, whirling dervish-like, "Earl the Pearl". Maybe they will do better when injured players return…

"It's possible that what Smith refers to as "panic mode" really just means that he's going to get serious and do his part to ensure that the Knicks don't continue to slide into the lottery. Still, it's interesting to consider what panic mode could mean for a player as enigmatic and frustrating as J.R. Smith. On a nightly basis, Smith baffles with his erratic shot selection, defensive breakdowns, and ability to take over a game playing exactly the same style that submarines his team's chances at a win. Panic Mode J.R. Smith could be even crazier, with a tendency to dribble with his palms and throw elbow passes as a matter of course. I mean, he already got stuck inside a garage on Thursday, so something must have changed."

source

Nov

22

 Cryptonomicon looks like a fun read and perhaps presages some of the issues in the news now. What secrets will be revealed in the next 30 years about things going on today?:

About the book:

"With this extraordinary first volume in what promises to be an epoch-making masterpiece, Neal Stephenson hacks into the secret histories of nations and the private obsessions of men, decrypting with dazzling virtuosity the forces that shaped this century.

In 1942, Lawrence Pritchard Waterhouse—mathematical genius and young Captain in the U.S. Navy—is assigned to detachment 2702. It is an outfit so secret that only a handful of people know it exists, and some of those people have names like Churchill and Roosevelt. The mission of Waterhouse and Detachment 2702—commanded by Marine Raider Bobby Shaftoe-is to keep the Nazis ignorant of the fact that Allied Intelligence has cracked the enemy's fabled Enigma code.

It is a game, a cryptographic chess match between Waterhouse and his German counterpart, translated into action by the gung-ho Shaftoe and his forces. Fast-forward to the present, where Waterhouse's crypto-hacker grandson, Randy, is attempting to create a "data haven" in Southeast Asia—a place where encrypted data can be stored and exchanged free of repression and scrutiny. As governments and multinationals attack the endeavor, Randy joins forces with Shaftoe's tough-as-nails granddaughter, Amy, to secretly salvage a sunken Nazi submarine that holds the key to keeping the dream of a data haven afloat. But soon their scheme brings to light a massive conspiracy with its roots in Detachment 2702 linked to an unbreakable Nazi code called Arethusa. And it will represent the path to unimaginable riches and a future of personal and digital liberty…or to universal totalitarianism reborn.

A breathtaking tour de force, and Neal Stephenson's most accomplished and affecting work to date, Cryptonomicon is profound and prophetic, hypnotic and hyper-driven, as it leaps forward and back between World War II and the World Wide Web, hinting all the while at a dark day-after-tomorrow. It is a work of great art, thought and creative daring; the product of a truly iconoclastic imagination working with white-hot intensity."

Scott Brooks writes: 

I read Cryptonomicon about 10 years ago and found it to be a mostly fascinating and fun read.

I recommend it to anyone looking for an enjoyable way to wile away the afternoon.

That said, Stephenson has a very distinct writing style that is somewhat cryptic (if you'll pardon the pun). There were multiple times in the book when I would have absolutely no idea what he was talking about, who the characters were or what it had to do with the story. He told the story in a disjointed and odd manor.

It was like he was writing in a puzzle format and tried to make things a confusing…like he was trying to be clever. Unfortunately, he only came across irritating. He did tie things back together later in the book, but it became a bit off-putting after a while.

However, that aside, I did enjoy it and recommend it to the group.

Nov

11

 There was a very interesting segment on 60 Minutes last night about GoPro and its young CEO, Nick Woodman. A fellow who failed with an earlier business but who came up with a great and very profitable idea.

One can imagine attaching the GoPro camera to a RC mini-quadcopter along with certain geosensing tools (small magnetometers, maybe gravitometers, GPS etc. –depending on lifting capacity of the copter) in order to aid prospecting for minerals in rough or jungle terranes. Certainly it suggests a way to more quickly do local remote sensing projects.

I would imagine it potentially useful for archaelogical or environmental work too. One can envision a "smart" GoPro that could process remotely sensed information (possibly in extended wavelengths like IR). Inspection of all types of man-made structures becomes easier.

As mentioned in the 60 Minutes program, coral reef surveys have been greatly improved by utilizing the underwater GoPro cameras.

Here is the TV segment with Anderson Cooper.

Here is a company with geosensing possibilities like GoPro uses. 

Nov

11

Many of the estimated 6-7 million expats have headed to Mexico but Medellin, Colombia has been mentioned before as a good city for entrepreneurial souls. Perhaps Rosetta Stone or other language companies will do better as more boomers head south.

1.

"Medellin, the former drug capital of Colombia, has launched a film commission as part of concerted bid to convert it into the film capital of this Andean nation. Spurred by Medellin mayor Anibal Gaviria, a 10-year strategic plan begins with construction next year of what Medellin film commissioner Francisco Pulgarin describes will be the largest audiovisual complex in Latin America with film and TV studios and other amenities. Infrastructure build-up will complement an initiative to train more people — in both English and Spanish — in the audiovisual sector."

2.

Medellín: With a metropolitan area of about 3.8 million people, it's Colombia's second-largest city. Its location in the northern Andes ensures pleasant weather year-round, with temperatures rarely rising above 80F or falling below 60F. Most buildings are constructed of red brick, set off by the greenery of the city's many parks and botanical gardens. Five of Latin America's 35 top-rated hospitals are located in Medellín, Peddicord says.

Downsides: Air travel to the U.S. generally requires changing planes at least once; air pollution can be a problem in the center of the city; and the English-speaking expatriate community is small. "You are going to have to learn some Spanish," she says.'

Nov

7

 Grist for the toxicologists and epidemiologists and experts on the site. I am concerned about sushi. Check out this article.

"Although uncertainties remain regarding the assessment of cancer risk at low doses of ionizing radiation to humans, the dose received from PBFT consumption by subsistence fisherman can be estimated to result in two additional fatal cancer cases per 10,000,000 similarly exposed people."

I wonder if the mercury, PCB, and other contaminants have more impact from a toxicological standpoint or is it an order of magnitude.

This is the Fukushima radioactive "tag" used to track fish migratory patterns.

On another related subject, this is a paper on atmospheric fallout (and congenital hypothyroidism, CH) from Fukushima:

"Understanding why CH rates have risen in developed nations such as the US is a complex task, as multiple factors are likely involved. Exposure to radiation, especially the thyroid-seeking radioiodine isotopes, should be considered as one of these factors. The meltdown at Fukushima Dai-ichi presents an opportunity to analyze this factor, and studies such as this one should continue."

Nov

4

 I have a hypothesis that older people with money to invest put too much value on youth in their investments, i.e, that they think that young people and things that young people buy are better than other things. I wonder if this is because of their desire for immortality or just a rejection of their loss of virility. I looked for articles that were relevant to this hypothesis but not having the scope or sweep of Pitt, or Mr. E, I have not yet struck pay dirt.

Vince Fulco writes: 

Add to the mix of hypotheses, worry about not keeping up or relevant on world developments, IT, or scientific advancements. It is exhausting for some generations given they were raised with sliderules.

Scott Brooks writes: 

Isn't it fair to say that the growth companies of yesterday are the value companies of today?

Older people probably want, at least, some growth in the portfolio, so they invest some of their money with the younger generation who generally more innovative and/or more attuned to "newest" innovations and idea's that come out.

This makes me think of the thread that we had on the open list last week about music. The older we get, the less we are attuned to modern (innovative?) music. We become entrenched in what we know and what impacted our lives growing up.

My theory is that the growth stage of our lives occurs during our teens, 20's and 30's. In our 40's we begin to transition into entrenched value stages and by our 50's (and one), we are value driven.

I think this applies to music and investing.

However, if we are smart (and I'd like to think we are…..at least some of the time), we inherently understand that "youth innovates and invents" and we want to be a part of that.

And since by the time we are in our 40's (and up) we have the money, we are the ones that the "youthful innovators and inventors" come to for cash to fund their ventures. And if we missed the Angel/VC and even IPO stage, we'll still invest a portion of our portfolio's with them to harness their vision……and recapture some of our own lost youthful vigor and insight.

Kim Zussman adds: 

Perhaps this wasn't the case before Microsoft (Apple, Google, Facebook, etc) showed that young computer mavens could hit it big, and that nerds will rule the world. People who came of age in the PC era.

Weren't the big success stories pre-1980's stodgier companies?

Scott Brooks writes: 

Wouldn't it be fair to say that GM, Ford, IBM, were the growth and innovative companies of the Henry Ford and Bob Hope Generations?

IMHO, every generation has their MSFT or AAPL, or GOOG……it's just that by the time we know about them (we being the next generation), they've become value companies.

The car companies and airline companies of our parents generation were the equivalent to the computer companies of our generation.

Pitt T. Maner III adds: 

 One would think that the influence of youth is increasing due to the higher use of the internet by the over 50 crowd (which includes me).

1. "Baby Boomers Driving Technology Wave":

'What explains the rapid pick-up of tech tools among the older crowd? "The younger investor is usually an influencer towards their parents in terms of technology," says Ryan by email.

The numbers dovetail findings by the Pew Research Center's Internet & American Life Project that more than half of adults 65 and older are online today. They're flocking to YouTube, social networks and shopping sites—while also growing more comfortable using banking and other financial services online. They form a surprisingly active demographic for Facebook, where 57% of those 50 to 64 are on the social network, according to Pew.'

So you might look at who are the main internet influencers with respect to individual stocks and the stock market and older internet users. For instance Cramer appears to have a fair amount of online "clout" with respect to stock selection as might several others on CNBC.

2. There are many companies trying to figure out and somewhat quantify who the influencers are– such as Klout.

3. This is a recent paper on the influence of the collective mood state on Twitter with respect to the market.

Behavioral economics tells us that emotions can profoundly affect individual behavior and decision-making. Does this also apply to societies at large, i.e., can societies experience mood states that affect their collective decision making? By extension is the public mood correlated or even predictive of economic indicators? Here we investigate whether measurements of collective mood states derived from large-scale Twitter feeds are correlated to the value of the Dow Jones Industrial Average (DJIA) over time. We analyze the text content of daily Twitter feeds by two mood tracking tools, namely OpinionFinder that measures positive vs. negative mood and Google-Profile of Mood States (GPOMS) that measures mood in terms of 6 dimensions (Calm, Alert, Sure, Vital, Kind, and Happy). We cross-validate the resulting mood time series by comparing their ability to detect the public's response to the presidential election and Thanksgiving day in 2008. A Granger causality analysis and a Self-Organizing Fuzzy Neural Network are then used to investigate the hypothesis that public mood states, as measured by the OpinionFinder and GPOMS mood time series, are predictive of changes in DJIA closing values. Our results indicate that the accuracy of DJIA predictions can be significantly improved by the inclusion of specific public mood dimensions but not others. We find an accuracy of 87.6% in predicting the daily up and down changes in the closing values of the DJIA and a reduction of the Mean Average Percentage Error by more than 6%.

4. That reminds me of these websites

tickertweets

Marketpsych

avoiding the herd

5. This influence effect on the older investor might have to be considered with respect to the depressing findings asserted by this research:

"Examining the economic costs of aging, we find that older investors earn about 3-5% lower annual return on a risk-adjusted basis. Collectively, our evidence indicates that older investors' portfolio choices reflect greater knowledge about investing but their investment skill deteriorates with age due to the adverse effects of cognitive aging."

David Lillienfeld writes: 

And the problem is that it's unclear that there's any company to take over the place of MSFT, AAPL or GOOG besides AMZN, which can't seem to earn any money (real profit, not just revenues). I had hoped that my now, there would be some suggestion of which companies those may be, but I'm not seeing them.

Scott Brooks writes: 

You could have said almost the same thing about railroads…..then came big steel.

You could have said almost the same thing about big steel….and then came GM.

You could have said almost the same thing about GM…..and then came IBM.

You could have said almost the same thing about IBM…..and then came MSFT.

You could have said almost the same thing about MSFT…..and then came GOOG.

You could have said almost about GOOG…..and then came……?

You have successful well run companies that create cash flow and then use that cash flow and credit to buy up smaller (other) companies….and become dominate.

Isn't that just the way the eternal business cycle works?

Isn't that really just the way of mankind and government?

Nov

4

 There is a beautiful location within view (for now) across the intracoastal from me. Attractive ladies and their cute dogs frequent the area. And a row of investment service companies are right around the block.


Demand for Large Boat Slips at Town Dock Surges
:

"There's become such a demand for bigger boats, and there's not enough space for them," said Dockmaster Mike Horn. "Last week, the phone didn't stop ringing. A lot of people will call, and we just have to say 'no.' The 38 slips for 100-foot-plus yachts are completely booked, with seasonal and annual leases."

Nov

4

 The advice of Art Bisguier comes to mind when considering the Australian's post on turning off the lights. "Schtalll," he always said. "Sit on your hands and write your move down before you move the piece." I always say if you waited a day or two or hour or two on every trade, or definitely to the end of the day on every trade, you'd do much better. We live in a web of deception.

Anatoly Veltman writes: 

With due respect to everyone quoted, I'm not sure. Just like in board games there is time limit, so in any market contract, there is window of opportunity to cease a favorable price. Have recent tests shown that reversals occur between sessions, as opposed to intra-session?

I agree that was the case in yesteryear, because participants who over-leveraged during the day had to liquidate on the close, amplifying the riot. But these days, the pre-set electronic limits prevent such intra-day indiscretion. So it's just as likely to hit major pinnacle or nadir any time in the session.

Craig Mee writes: 

 Wouldn't it make sense to take all the bright lights, and colored up and down arrows, and green and red charts off your screens and replace them with blacks and greys. The flickering of the table creates undue excitement in one's mind and drives one to "play" when they probably should sit. 

Pitt T. Maner III writes: 

Funny, I was just reading something along the same lines but related to gambling. Best not to confuse the exciting red cherries and the appearance of green as being indicative of possible success.

"How Slot Machines Trick Your Brains":

"A reel on a virtual slot machine may seem to be cycling between 22 positions, but the machine powering it could have 64. This means you're seeing those cherries moving by way more than the odds that they will stop. Schull cites a study by Kevin Harrigan, an expert in algorithms, which says that if this type of machine were to pay off according to what people are seeing, players would win 297 percent of the time."

Oct

29

 I saw this clever book on Amazon: "The Essential Scratch and Sniff Guide to Becoming a Wine Expert: Take a Whiff of That" by Richard Betts.

Perhaps a scratch and smell investment guide in a humorous vein would be a fun thing too. One conjectures that if investments had attached smells that many longshots (and decaying ventures) would be avoided and bargains would be more readily identifiable.

My environmental geologist snoozle became very adept at detecting 50 ppm or greater ("impacted") hydrocarbon levels in soils–but that is another story. At any rate, back to articles about the book:

1. "Knock wine off its pedestal. That's the goal of wine expert Richard Betts. And he has come up with a brilliant way to do it: a scratch n' sniff guide to the aromas and flavors of the wine world. With beautiful illustrations from Wendy MacNaughton, the 10-page board book looks like it belongs with your kid's toys instead of next to The Joy of Cooking.But don't let the playfulness fool you. There's some serious wine science in Bett's new book, The Essential Scratch and Sniff Guide to Becoming a Wine Expert."

2. 'Betts points out that all we actually taste is sweet, sour, salty and bitter.

"Everything else we experience comes from our sense of smell. And we can break that down into three specific areas that define all wine: fruit, earth and wood, oak in particular."

Earth is the toughest one to explain, he says, but as soon as he invites people to recall the smell of potting soil or river mud from a camping trip, they get it. For fruit, it's red fruit or black fruit. For oak, if it's American it smells one way, French another way. '

Oct

29

 I wish I hadn't written the chapter on poker in edspec. I hadn't played for 30 years when I wrote it, and all I did was read some books from the gamblers book club, and then write about it as a layman, poseur, armchair geezer. I wasted 5 pages of everyone's time on it. And anyone who knows the game would have seen I was out of my league. I try not to be as ignorant of my ignorance as I once was.

The current issue of Outside is all about the secrets of survival. What it takes to stay alive. I am ignorant on this subject. The only thing I know about it, is from books, that when you're the captain, you're supposed to be the last man out, until you say "every man for himself" as Aubrey did. Also, what I read in L'Amour about always being aggressive at the beginning when threatened with a life saving situation. But people on this site are infinitely more knowledgeable than I on this subject as are all my kids and partner, who all had to spend a few days alone in the Vermont wilderness as part of the Mountain School they went to.

So please, give us your survival things, and comment on what Outside said, so that we can survive better in speculation, a consummation devoutly to be wished, and which the all seeing eye would like to do so many things in this life over again related thereto.

Jim Sogi writes: 

 Many cases of death in the wilderness are as a result of a series of small stupid mistakes that compound and make what is not a deadly situation, into a deadly one. First is lack of preparation. The classic case is the two hour hike without proper basics such as jackets, maps, water, shoes, compass and the weather gets bad. The party hurries, mistake 2. One in the party gets injured: mistake 3. The parties separate to get help: mistake
4. Both parties become disoriented and lost and panic, running about. mistake 5. Their bodies are found days later a few feet off the path. All stupid mistakes, compounding a nice situation and tipping into irretrievable disaster. It is the same as Chair talks about: a good base of operation. Basic needs of the operation in the wild are adequate shoes, protection from weather, warmth and hydration, and basic navigation.

The second main survival issues are the basic needs of human survival: water and warmth. One can go for days, and almost weeks without food, but without water, hours can bring on death. If the body goes just a few degrees below or above its normal temperature, body and mental functions shut down and the person goes into a stupor. It can happen in 70-80 temperatures surprisingly.

Often, the simple cure to avoiding the above is just to stop. People have a real need to be doing something, and often it is not helpful and leads to disaster. How many parallels there are to trading!

I have a simple survival first aid package. Loss of blood is one of main causes of battlefield death. Unless bleeding is stopped, death will quickly follow often in minutes. Cetox granules go in the wound and staunch the bleeding by forming clots. Pressure and bandaging or sealing with stitches or tape will stabilize until further help. Also in the kit are pain killers. Sprains and breaks are common, and pain killer will allow the party to limp or carry to further help. The commercial first aid kits are often a waste. Water treatment is top of the survival bag list to kill giardia and cryptosporidium that will cause runs and dehydration. A small tarp or space blanket and jacket will provide enough shelter to avoid hypothermia by blocking wind and rain. Tape such as dermoplast or even duct tape can be used to staunch bleeding, make splints and stabilize breaks and sprains. A good flint and steel and tinder and water proof matches will help build a fire to keep warm. That's about all in my kit. All the crap in the commercial kits tend to be useless weight. Most survival situations only last 3 days. By then 95 percent are rescued or dead. Just stay warm, drink water, and keep your blood inside you.

Bibliography:


98.6 The Art of Keeping Your Ass Alive
Cody Lundin
Backcountry Skiing Skills Wheeler, Margaret
First Aid: A Pocket Guide Van Tilburg
Glacier Travel and Crevasse Rescue ,
Selters, Andrew

Deep Survival, Gonzales, Lawrence

Phil McDonnell writes: 

About the only thing I can add to Mr. Sogi's excellent summary of survival techniques is to recommend the choice of tinder for the flint and steel technique. I have considerable experience from Boy Scout days with flint and steel. The best tinder by far is steel wool. I believe the reason is that hitting the steel against the flint throws off molten steel sparks which somehow are attracted to the steel wool fibers. In competitions I used to be able to boil a #10 tin can of water in 3-4 minutes.

Pitt T. Maner III writes: 

 I occasionally watch the Les Stroud Survivorman show and he has some good ideas on the subject. Similar to Mr. Sogi.

For urban disaster he emphasizes having a basic kit stored in a plastic container.

In Stroud's view it is ideal to keep:
1) a week's supply of water and 2) a nice first aid kit (probably doesn't hurt for everyone in the family to take the Red Cross First Aid/CPR course or from another qualified provider. He advises having a 3) crank-up radio to keep in touch with outside world and 4) a shake, non-battery flashlight. 5) Water proof matches, 6) Rope, 7) a Multi-Tool.

During the hurricane season a trip to Costco to prepare for a possible storm is important. Easy to pick up canned goods, water and other items needed. A little wine to share with your fellow condo survivors doesn't hurt either when the power and water go off for a week and you are sweltering without the A/C. I like a big lantern-type flashlight with fresh batteries so you can read a bit at night.

At any rate, Stroud emphasizes staying dry to avoid hypothermia in the wilderness. Exposure is a big risk in the wilds.

Ed Stewart writes: 

 James has an excellent summary of important points.  I will add (or expand on) a few.

First, be very cautious when venturing into new territory.  If one is experienced at hiking a certain path or mountain or area, Don't assume "it is all the same" when you go to a new place.   Don't assume, "I know how to find my way".   I grew up in rural New England and spent a great deal of time in the woods (back country type skiing, hiking, fishing, etc) from a young age.   My families home was near a govt owned wilderness area, and over time I got to know the terrain extremely well in terms of having a mental map and orientation, but also things like natural formations that could be useful as shelter, etc. Knowing a wilderness territory is like knowing where the "utilities" are that you can access from any position.

It is very dangerous to generalize such specific knowledge into thinking "I am good at finding my way", a mistake I experienced and learned from.

Wear the right clothes initially, not just in a backup capacity. What is comfortable in ideal conditions (light cotton long sleeve T-shirt, etc) can be a disaster when conditions change. Material that is waterproof and/or maintains insulating ability when wet is always good.

Extreme danger emerges out of "usual" situations and seemingly small challenges. It is hard to see danger without experience. For example a recreational hiker thinks, "that small rock formation would be fun to climb".   The problem is, how it looks at the bottom (easy!) is a distortion relative to what one sees close up (unstable rocks, dirt, etc) from a now dangerous height. "From a distance" assessments are not an accurate judge of things for most people.

Focus on external factors that reveal themselves through the five senses. Take the time to observe. Stop and listen. Look at shadows, type of earth you are on, gradient, sounds, smells. Getting into that observation mode, not talking, not focusing on your own thoughts but on what is "out there." Bringing the senses alive to the slightest changes in the environment is a significant survival skill.

Experience coping with blood and guts, both literally and metaphorically, prepares one for survival. Many people are very deceived about survival situations because most of modern life is very safe, sanitized, and compartmentalized. Meat comes in a plastic package. "Someone else" does the dirty work. "Someone else" fixes an injured person. "Someone else" makes things safe and secure. People are squeamish about crossing boundaries, and when confronted with them can panic or become ill. An easy way to develop a natural survival mentality in any circumstance is to look for ways to cross boundaries before one is forced to do so.

The sound of a heavy metal bell can carry a great distance.  As I said, I grew up in a very rural area and our home was on a large number of acres. When I was out late fishing, etc, my mom had a very heavy metal bell that she would ring– a sound which would carry for miles and alert me to come home — and immediately, automatically set my orientation.   There are plenty of ways that a low cost item like this can be used.

Vince Fulco writes: 

 Besides some of the other great pubs listed here, the US Special Forces Medical Handbook (a bit dated) can be found on amazon and similar for $10. There is plenty of food for thought for the non-medical professional for when the stuff hits the fan in a bigger way.

Vincent Andres writes: 

I remember well one of Reinhold Messner's simple tips.

When in danger, you are yourself the very first level of protection (and also one of the best, since your reaction can be very immediate). So work well on this very first level, and don't count on somebody else doing the job for you.

This is also a very libertarian and Randian tip.

 

Oct

28

 The greatest storm chaser, Tim Samaras devoted his life to unlocking the mysteries of extreme weather (his father placed an ad for used tv sets for him to fix). Then came the tornado of May 31.

The monster storm. 

"His mother had given up making him play little league baseball after she noticed that he would spend game time gazing not at the ball but instead at whatever in the sky interested him"

"And if it happens,  I die chasing the tornado), I'm going to go out collecting my data."

"The Oklahoma city mortuary director refused to be paid or his efforts. He was doing research, trying to save lives". "Winter (his son who didn't know who his father was until 28 years old ), pleaded to be allowed to stand outside to watch the tornado while the other kids clambered into the basement."

Perhaps Nassim will live and I will die chasing a 10% decline.

Note that the reason for unusual and premature deaths like that of Tim Samaras are usually from romance or getting in over the head about money. Tim was in a small Saturn car rather than the land rover because he only had 10,000 to spend on the rest of the year for all his gas and employees. The son died with him. 

Pitt T. Maner comments: 

 A couple of more quotes from an excellent article by Brantley Hargrove in Dallas Observer News:

'Their deaths have forced the insular storm-chasing community to search its soul. None from their ranks had ever died in a tornado. And this wasn't some amateur yahoo with an iPhone. Samaras was the godfather of this pursuit. Now he and the compacted hull of his white Chevy Cobalt had become the glaring evidence of their own fallibility. If so great a man could not save himself, how could any?'

and 

"There's always been chasers who pushed the limits, got too close, and I've certainly done that a few times myself," Robinson says. "You'd think maybe it should have been somebody who did something reckless or careless. It shakes you up when you realize that someone with his experience can end up in that situation."

One of things Samaras loved about the study of tornadoes was that it remains a wide-open frontier. So many fundamental questions continue to go unanswered. How much can the pressure fall inside of a tornado? Why do some mesocyclones produce tornadoes while others do not?'

Oct

28

 Vladimir Keilis-Borok remembered:

"Scientist Who Sought to Predict Quakes Dies at 92"

"Earthquake prediction today remains elusive. Most scientists are generally pessimistic about ever having that ability and have instead focused on emergency preparedness and advocating for an early warning system designed to give people a few seconds of notice after a quake occurs but before damaging waves spread widely."

and perhaps V K-B's methods may be useful for political election outcomes?

'Keilis-Borok and his team identified patterns of seismic activity using mathematical algorithms. Their predictions were based on finding a "seismic chain," or series of smaller quakes, that could be a precursor to a major jolt. He called this methodology "tail wagging the dog."'

Oct

8

 It's only a flesh wound…as Monty Python would say.

I thought this was a great article about chemical codes and signaling amongst plants.

"Learning to Speak Shrub":

'Entomologist Richard Karban knows how to get sagebrush talking. To start the conversation, he poses as a grasshopper or a chewing beetle—he uses scissors to cut leaves on one of the shrubs. Lopping off the leaves entirely won't fool the plants. So he makes many snips around the edges and tips of the leaves—"a lot of little bites."

A few months later, Karban, a professor at the University of California, Davis who studies plant defense communication, returns to the sagebrush and examines its leaves, many of which now have damage from real grasshoppers or beetles. However, within about two feet of the branches he clipped, leaves have been spared the worst ravages of the hungry insects. That's because Karban's cuttings convinced those damaged leaves they were under insect attack, so they sent chemical alarms into the air. Neighboring leaves intercepted and deciphered the code messages, and began prepping their own defenses against the bugs.

It makes me wonder what pheromones the markets release?

Oct

7

A site claims to have an algorithm for determining "optimal puts" for your portfolio:

"So far, judging by the costs of hedging the iShares Barclays 20+ Year Treasury Bond ETF (TLT), options market participants don't appear to find the prospect of a default likely. But if one were to happen, it's difficult to predict how hard Treasury securities (and ETFs comprised of them) would get hit. For investors who would like to insure against an unlikely but potentially disastrous scenario, here are two ways of doing so."

Sep

24

The Prisoner's Dilemma is very well analyzed in the highly recommended very technical book, Evolutionary Dynamics by Martin Nowak.

The two by two payoff matrix:

                         Remain Silent       Confess

Remain Silent          -1                      -10

Confess                     0                       -7

shows payoffs to you if you and your colleague have committed a crime. The D. A says that if you confess and your colleague doesn't, you go free. But if you don't confess and he confesses you get 10 years in jail. But if you both confess you both get 7 years in jail. But if you both are silent, you both get just 1 year in jail because they can't prove anything.

 The problem is that you do better by being disloyal to your partner. And so does he.

Rapaport has a very good solution to this problem if you play the game repeatedly. It has many applications to trading. If you are a flexion and you have inside information, perhaps from being one of the hundred people receiving economic releases in advance on a need to know basis, and your conspirator is a trend follower, or someone you are revealing the news to, as so often happens, you do better if you act but your colleague doesn't. Same for him. But if you both act, you'll move the market and the opportunity will be lost.

What other situations in markets can be modeled by the prisoners dilemma, and how do the solutions that Nowak and Wiki discuss illumine our trading, and enlighten us as to the disadvantages we face.

Tyler McClellan adds: 

Freeman Dyson published a short paper in the last year or so that supposedly showed a very unintuitive and until then unknown solution to this game.

"Iterated Prisoner's Dilemma Contains Strategies the Dominate and Evolutionary Opponent"

Stefan Jovanovich writes: 

The speculations about the Prisoner's dilemma too often omit the fact that the criminals both belong to the same tribe. The criminals' choices of rat/don't rat are bounded not only by the lesser/greater punishments by the prosecutors but also by the rewards/punishments offered by the gang/group. When the group's incentives are included in the calculations, the conspirators will, as wise guys, follow the logic of silence. That is why successful Federal prosecutions of organized crime that depend on informers have to offer the additional incentive of bribery. An offer of lesser punishment is not enough.

Pitt T. Maner III comments: 

And the game rules and risk/reward payouts in open systems would seem even more variable and subject to interpretation/enforcement depending on the players involved.

This article
has two viewpoints on some recent data: "it's suggestive" vs. "overwhelming"

"Does a burst of ETF trading in the same millisecond of the Federal Reserve's policy statement raise an eyebrow? Sure. Is it indicative of a leak or insider trading? Not necessarily. For that, you'd need something besides numbers on a chart."

And this is one of the latest papers on the subject which might be of interest:

"Penn Biologists Show that Generosity Leads to Evolutionary Success"

"Last year William Press and I proposed the 'extortion strategy' in the game of Prisoner's Dilemma, enabling one player to maintain a dominant position over the other," said Dyson, who is retired as a professor of physics at the Institute for Advanced Studies in Princeton, N.J. "One year later, Stewart and Plotkin turned our strategy upside down and showed that it enables one player to coax the other gently toward collaboration. They understood our strategy better than we did. They reached by rigorous mathematics the happy conclusion that, in a game between ruthless antagonists, generosity wins." '

Richard Owen writes:

It always seems to be that the merits of a mathematical discovery aren't enough by themselves. The closed system needs to be extrapolated to the wide world. Thus a specific proof about a mathematical game is assumed to show that "it pays to be generous in life." As if, without the mathematical imprimatur, this might be held in some doubt. That particular habit of taking results proved in a closed system and extrapolating them to the wide world is probably particularly relevant to the investment field.

Jim Sogi adds: 

I definitely like this author's approach to game theory using a spreadsheet to tally levels of factors similar to a plus minus decision list. The approach can definitely be used to quantify market information and decisions. It breaks down multi factored complex decisions into manageable quantifiable choices which are tallied to arrive at the big decision.

Sep

24

 "Effects of Ancient Meteor Impact Still Visible On Earth"

This is fairly recent in a geologic sense.  I listened to a great
lecture by Dr. Ed Petuch at FAU the other night and he mentioned that
part of the debris field from this event are found in Argentina.  Entire
sections of sediments were scoured from the sea floor in the blast area
and are missing in the geologic record.  The following portion of the article
describes what happened:

'More than 35 million years ago, a 15-story wall of water triggered by an asteroid strike washed over Virginia from its coast, then located at Richmond, to the foot of the inland Blue Ridge Mountains — an impact that would affect millions of people should it occur today. Yet despite its age, the effects of this ancient asteroid strike, as well as other epic space rock impact scars, can still be felt today, scientists say. 

The Virginia impact site, called the Chesapeake Bay Crater, is the largest known impact site in the United States and the sixth largest in the world, said Gerald Johnson, professor emeritus of geology at the College of William and Mary in Virginia. Despite its size, clues about the crater weren't found until 1983, when a layer of fused glass beads indicating an impact were recovered as part of a core sample. The site itself wasn't found until nearly a decade later. [When Space Attacks: The 6 Craziest Impacts]
 
The comet or asteroid that caused the impact, and likely measured 5 to 8 miles (8 to 13 kilometers) in diameter, hurtled through the air toward the area that is now Washington, D.C., when it fell. The impact crated a massive wave 1,500 feet (457 meters) high, researchers said.
 
Though the impactor left a crater about 52 miles across and 1.2 miles deep (84 km across and 1.9 km deep), the object itself vaporized, Johnson explained.'
 
"I'm just sad we can't have a piece of it," Johnson said in a statement.

Sep

12

 Vic,

Just ran across the new book by Mr. Spitznagel tonight  (The Dao of Capital: Austrian Investing in a Distorted World) and saw your recommendation on Amazon. Spitznagel uses some of the forest fire ecosystem ideas that the Dailyspec has discussed.

Patience and discipline appear to be points emphasized by the author.

I thought this was a good quote of the day: 

Yet, in both poker games and financial markets distorted by the manipulation of antes and interest rates, respectively, this makes sense. Current valuations indicate that Mr. Bernanke's continuing monetary policy is fooling investors into taking enormous risk for no expected return, or close to it.

Perhaps investors should heed the poker player in similar circumstances, who would instead choose a guaranteed zero return, saving his chips for another day, for another chance to play the holy game — but with fairer rules where the value of the hand truly justifies the risk and reward."

Sep

9

 One has been watching youtube videos on tennis footwork with a view to improving Aubrey's squash game. Many videos talk about moving in to the ball rather than waiting. Apparently this is the secret of Federer's footwork with his walking step which just means, as far as I can see, hitting every shot as if it were an approach shot. Paul Gold has a series of 4 steps that he recommends. Using the eyes to watch the ball, and getting into an athletic position, taking a split step on every shot to take a proper first step, and getting to the ball with big steps pushing off the opposite foot to where the ball is going.

I wonder if these steps have a value for market people. Get prepared before the day with the proper equipment and study deciding whether you wish to buy or sell and which ones adjusting your trade level and size with the proper current volatilities and market movements and announcement. Trading and then preparing for the next shot…

Alston Mabry writes: 

The trading analogy for me is that I find myself in two basic modes: (1) reactive, waiting to see what's going to happen next, or (2) predictive, identifying what I think are the highest-probability paths over the next X time period, defining what I will do in each case and preparing for that action.

On the morale side, it's easy for lack or preparation or a losing trade to push me into mode (1); whereas getting back into mode (2) takes preparation, focus and discipline.

Anonymous writes: 

Related to the preparation stage of the game, it is interesting to pontificate about how many moves ahead board game players and sportspeople think and how the speculative game can be improved by adding this type of thinking.

I played basketball up to a fairly high level ( I played center for my state) and in that sport one only tried to anticipate one move ahead (to try and steal the ball or make the rebound).

My limited experience in tennis and squash leads me to think that the best in these games have time to think perhaps two moves ahead (Chair may have a view on that given that he has been known to hit the occasional hard squash ball just above the tin).

I read that chess and checkers players may think many moves ahead — perhaps all the way to a game's conclusion given an opponents error (or good move). Distinguished personages on this list might add meat to this point?

So, how many reactions ahead in the markets…? My various quantitative approaches likely have a substantially shorter holding period than most on the list so the following needs to be filtered by this fact:

* In terms of prediction, I have not been able to produce consistent alpha from any method that looks more than two steps ahead or behind (Market A's move effects Market A's future as well as Market B's future and Market A&B's move effects the future of Markets A,B & C)

* I guess one can also look at this in terms of degrees of freedom- more than 3 or 4 is probably too many. (Or to quote Arnold Zellner "…KISS….Keep it Sophisticatedly Simple)

* It might be a reasonable generality that the more steps ahead (or back) you look the longer needs to be your time frame.

Back more directly to Tennis & basketball. As a center in basketball I had two things to do in preparation. These were to be fully stretched out to jump high and to be completely focused on getting the ball to my pre- chosen team mate. When rebounding you have to commit before the shooter fully raises his arms. In tennis, the unbeatable ground strokes are often those hit on the rise — as it were. In both cases you have to anticipate to hit the perfect stroke or 'deny' the shooter.

The same in markets I think.

This comes back to being ready — obviously.

Pitt T. Maner III writes: 

I would wonder if there are specific training or virtual simulators (software) for traders that would be useful to identify and improve weak areas in preparation, execution, timing, psychological tendencies, etc.

For athletes and racquet players the analogy might be some type of virtual practice such as Virtual Tennis Academy where there would be actual analysis of footwork and stroke production in slow motion using attached sensors. With eventually perhaps some type of instant feedback (ie. sound, vibration) to cue the practicing player on what he or she is doing right.

Film analysis is becoming important in tennis as well.

A recent article, for instance, suggests that improvement in cognitive abilities in older persons is possible through the use of computer games:

"Commercial companies have claimed for years that computer games can make the user smarter, but have been criticized for failing to show that improved skills in the game translate into better performance in daily life1. Now a study published this week in Nature2 — the one in which Linsey participated — convincingly shows that if a game is tailored to a precise cognitive deficit, in this case multitasking in older people, it can indeed be effective."

The world of quantified self programs appears to be ever expanding. Why not financial and sports feedback too?

Charles Pennington writes: 

I tentatively have a theory that players stand way too far back to receive serve. One of the most awkward serve receives is a high backhand. But if you stand up close to the service line, perhaps halfway between the service line and the baseline, then you know that the ball is going to be bouncing nearby, and you can try to catch it low before it gets above your shoulders. If things go as planned, you'll punch the ball back and make the server have to scramble for the ball with little time to spare. However, I haven't really had a chance to try this out against a big server.

Anton Johnson writes: 

It is a joy to watch the masterful footwork of an accomplished base thief.

The speedster, with orders received, his eyes fixed on the pitcher, quickly side-steps, while never crossing his feet, feeling his way to tease the 12' danger zone. When sensing the pitcher suddenly whirl, with his weight biased to the left, he must cross right foot over left, to initiate the saving dive, and avert the embarrassment of a catastrophic pick-off.

However, when the enemy is committed, and with armed help at the plate, with explosive power he crosses left foot over right to continue the fight, knees powering forward, to slide just under the tag, to win the battle to own second base. 

Sep

2

 We mentioned rice on the site a few weeks back. I just ran across a few items of possible interest.

Evidently one white rice (Oryza) index shown below is hitting a 2-year low.

Behind China, India and Indonesia appear to be the 2 biggest producers and 2 biggest consumers.

Here is an article and video on the Thai Rice Mortgage "Scheme" :

"In the latest in our series on Thailand's populist, big-spending programmes - known as Thaksinomics - we look at the price guarantee for the country's rice farmers. It was a promise made by the governing Pheua Thai party during the election campaign two years ago. The policy involved buying the entire rice crop at a fixed price - and as a result the government has accumulated a vast stockpile of the food, which if sold at today's prices would incur a loss. The BBC's South East Asia correspondent Jonathan Head reports on one of Thaksinomics' most controversial policies."

Aug

30

 One repeats that Tom Wiswell wrote 30 books and he considered the book he was writing of quotations of advice for board players and others the best book he ever wrote although it has not been published. All of his aphorisms are very very good for kids and there are about 500 of them in Edspec.  One I believe that is most important for business is "never get in over your head". Whenever Tom got into a complicated position he'd shake his head and say "I think I'm in over my head. I have to simplify" He never lost for 25 years or so. I've heard that from others in business also. I would be a wealthy man if I followed that advice.

Pitt T. Maner III writes: 

Here is a link to some of Wiswell's proverbs on an older page on Daily Speculations, and here is an interesting site for the chess players with Mr. Davies advice on learning from the strong part way down.

Aug

14

 My Dad and I went hunting for diamonds in Arkansas almost exactly 40 years ago in the Crater of Diamonds State Park after a long drive from Alabama. We started out in the park about 9 AM and in about 30 minutes it felt like 100 degrees F and 100% humidity and that was about all the digging we were up for. My recollection was filling up a jar with the crater dirt which had a greenish cast characteristic of weathered kimberlite from a deep mantle source. We were staying in a nearby hotel in Delight, Ark., the home of Glen Campbell, and must have spent the rest of the day in front of the A/C drinking lemonade watching dust and flies move about in the heat outside. Seems like we made it back to Vicksburg for a quick visit of the battlefield after that.

It's a fun place for kids though and an unusual one of  a kind park to visit— but go when it's cooler if possible.  A good rain seems to help with the diamond hunting too.

Here is the latest story from the park:

A 12-year-old North Carolina boy picked up a five-carat diamond shortly after entering a one-of-a-kind Arkansas state park last month. "We were probably there about 10 minutes and I was looking around on the ground and found it on top," Michael Dettlaff told ABCNews.com. "It was very glassy. Very smooth."

Aug

13

 Have any of you heard about Cart Life? This is a fascinating article about the creator.

"'Cart Life': How Richard Hofmeier game became a success story":

Cart Life is a special game. The management simulator, depicting the lives of three street vendors, is one of those rare titles that touches you on a personal level as you try to balance both your work and personal lives in an unforgiving world.

It's truly remarkable that it was developed by one man - Richard Hofmeier - and his recent scoop of Independent Games Festival awards was no less than he deserved after everything he has put into the project.

"The Making of Cart Life":

For Hofmeier, there's a certain beauty in the monotony of this sort of work, or at least in the way that humans approach and cope with monotony, and it's this appreciation that provided the theme for Cart Life. "Watch Chinese factory workers sort decks of cards and pack them – it's mind-blowing how beautiful this act can be. Listen to Ghanan postal workers cancel stamps; they're working the stamps on the envelopes like drums, and they're whistling – it's the sweetest music. Games are especially effective in cultivating very isolated realms of prehensile expertise. What's funny is how this prehensile expertise has infected so many game makers themselves, and many of them only want to make new games that utilise their own mastery of old systems. I wish I'd [owned] a copy of Cart Life when I was 11 or 12 years old, so I'd have black belts in areas like punctuality, detailed memorisation of disposable information, typing speed, and consumer math."

Aug

13

 This article shows results of experiment on the E-Coli bacteria detailing the survival or death of the bacteria in response to the way it handles introduced exogenous stimuli. The upshot is that small changes in exogenous conditions can lead to large substantial differences in outcomes. Surely a rich field for market related phenomena looking at how small changes in one input (say rates) may lead to large movement in other markets (say currencies) when the dependent variable is already under some stress.

Pitt T. Maner III writes: 

This is a really interesting field.

It looks like bacteria have been "hedging their bets" for quite some time. And they have a type of "memory" that influences their response to current environmental conditions. On a larger scale it is interesting to note what happens to the ecology of a system when a "keystone species" is removed. The field of "synthetic ecology/biology" looks to have important findings for a wide range of fields and the bacterial algorithms already developed are being used for engineering problems.

1. "Bet-hedging in stochastically switching environments":

"We investigate the evolution of bet-hedging in a population that experiences a stochastically switching environment by means of adaptive dynamics. The aim is to extend known results to the situation at hand, and to deepen the understanding of the range of validity of these results. We find three different types of evolutionarily stable strategies (ESSs) depending on the frequency at which the environment changes: for a rapid change, a monomorphic phenotype adapted to the mean environment; for an intermediate range, a bimorphic bet-hedging phenotype; for slowly changing environments, a monomorphic phenotype adapted to the current environment. While the last result is only obtained by means of heuristic arguments and simulations, the first two results are based on the analysis of Lyapunov exponents for stochastically switching systems."

2. "Memory in Microbes: Quantifying History-Dependent Behavior in a Bacterium":

"Your average bacterium is unlikely to recite π to 15 places or compose a symphony. Yet evidence is mounting that these 'simple' cells contain complex control circuitry capable of generating multi-stable behaviors and other complex dynamics that have been conceptually linked to memory in other systems. And though few would call this phenomenon memory in the 'human' sense, it has long been known that bacterial cells that have experienced different environmental histories may respond differently to current conditions [1]–[3]. Though some of these history-dependent behavioral differences may be physically necessary consequences of the prior history, and thus some might argue insignificant, other behavioral differences may be controllable and therefore selectable and even fitness enhancing manifestations of memory."

3. The work of Professor Robert T. Paine and the concept of the "keystone species" where an organism has a big effect relative to its abundance:

"It was a ritual that began in 1963, on an 8-metre stretch of shore in Makah Bay, Washington. The bay's rocky intertidal zone normally hosts a thriving community of mussels, barnacles, limpets, anemones and algae. But it changed completely after Paine banished the starfish. The barnacles that the sea star (Pisaster ochraceus) usually ate advanced through the predator-free zone, and were later replaced by mussels. These invaders crowded out the algae and limpets, which fled for less competitive pastures. Within a year, the total number of species had halved: a diverse tidal wonderland became a black monoculture of mussels1."

anonymous adds: 

 OK, what about Slime Molds (particularly, Dictyostelium discoideum). It has the absolutely stunning biological characteristic that it spends much of its life as thousands of individual cells and other times as a single entity.

When times are good for Dictyostelium doscoideum its 'cells' wander off and enjoy themselves. However, in less hospitable environments the 'swarm' of cells coalesce and form a single entity.

Apparently the cells emit acrasion (or AMP) that contains information useful for other cells

When things are starting to look tough the cells pump out increasing amounts of AMP and the cells begin to cluster….Other cells follow these trails and increase to mass towards it completed whole.

Now, I wonder about the stock market. During the regular upward movements most of the components are doing their own thing, following their oscillations generally higher…. When 'it' hits the fan, the correlations between the stocks increase rapidly to 1.0 and they form a single bearish, growling entity.

Now without pushing the analogy too far, I wonder if stocks 'transmit' statistical information (AMP to follow the analogy) to each other (in this context they would not transmit as much as 'exhibit' some form of common statistical behaviour) that forced the behaviour of component stocks into a more correlated state.

Testing possibilities are legion.

Gary Rogan writes: 

My general objections to giving some purpose to the market have to do with incentives, or more precisely lack thereof to do anything in particular.

I read a whole chapter of a book on a slime mold presented as an altruism study. The reason it was presented like that is that when the individual slime mold cells cooperate, only the lucky few that join the growing "mushroom" at the right time get to propagate because they get to form spores only at a particular state of development of the hastily arranged colony. Nevertheless, when presented with a choice of dying for sure or maybe propagating (and the cells only cooperate when they are close to death) they chose to cooperate and propagate. There is also some amount of deception involved when the cells jokey for position, but not a lot, since any particular placement is hard to achieve.

What is the equivalent reason for stocks to cooperate?

Bill Rafter writes: 

Should what you say about stocks transmitting statistical information occur, it would mean a relative decline of idiosyncratic volatility. That is something we have studied, and found that when the going gets tough, the idiosyncratic vol grows faster than the market's vol.There are some other measures of "group think" that are good indicators of both the broad markets and individual assets.

I would posit that stocks do not transmit info, but their owners do. Consider the case of futures in which one market takes such a hit as to require significant margin calls. Human nature being what it is, the public sells its winners to finance its losers, and non-related markets dive along with the primary.

Aug

12

 Pitt has inspired as usual some cross field thoughts. I recently read "You Know Me Al" a compilation of all Ring Larnder's baseball stories. And it struck me that nothing has changed in baseball in the last 100 years. All the plays were the same. And the travel and romance was the same. Alibi Ike for example went into a tailspin and lost his team the pennant when he alibied about the engagement ring he bought for his girl and she overheard it. The owner of the Pittsburg team in those days was a woman who liked scholarly guys from Yale. There were guys on every team that knew everything and antagonized their teammates so much that they couldn't stay on the team. And the sabermetrics that the coaches used was very similar also.

I was thinking. What plays are there in baseball that are similar to what the market does. The streaks that each team has at home and away. The records after this pitcher or that pitcher is against rigties or lefties. The records after home and away games. The double plays, the triple steals, the inducement to get into a fight to get a player kicked out of the game, the crooked umpires, the thrown games, the emphasis on the world series money for the coaches, the travel expenses. All the same and related to markets. The problem is that I don't know anything about baseball. And many here, most here know much more about our national pastime than I do.

Could you suggest some areas from baseball that the market might copy, and that might lead to interesting hypotheses about markets that would be useful predictives to test. I have to admit that with my limited knowledge of baseball, when Larry Ritter challenged me to come up with 100 of such, before he would tell me that his thesis student, the fake Dr. received a fake doctorate, it was hard for me to come up with them, even with the Collab's able inspiration.

Pitt T. Maner III writes: 

One of the things I have wondered about is why sports techniques that appear to offer statistically better results like Rick Barry's two-handed "granny" basketball free throw or maybe knuckleball pitching in baseball are so infrequently used.  Is there is a fear of using unorthodox means of winning, a fear of looking stupid/uncool, or just not wanting to stand out from the way it has always been done?
 
Here is a film about knuckleball pitchers that some of the baseball fans might enjoy:

"Knuckleball! is the story of a few good men, a handful of pitchers in the entire history of baseball forced to resort to the lowest rung on the credibility ladder in their sport: throwing a ball so slow and unpredictable that no one wants anything to do with it.
 
The film follows the Major League’s only knuckleballers in 2011, Tim Wakefield and R.A. Dickey, as they pursue a mercurial art form in a world that values speed, accuracy, and numerical accountability."

David Lilienfeld writes:

For Os and Bosox fans, there was actually an interesting piece in today's NYTimes about both teams giving some thought to the knuckleball. It sounds like the Os want to build their pitching staff around the pitch–or at least many of the pitchers. I'm hopeful that they succeed, not simply because I remember Hoyt Wilhelm in an Orioles uniform (ah, those not-so-golden days of Jim Gentile, Brooks, and Dick Hall), but it also raises the prospects of longer-throwing pitchers. I don't just mean longer careers, though there is that. I'm also thinking of more innings pitched, 4 starter rosters and the like. Having come of age during the Orioles pitching trifecta of 1969-71, I find the idea of a 4 man starting rotation appealing. The notion of "one-hundred and one, and then you're done" isn't a mantra I'm partial to. Some have suggested that Sandy Koufax's retirement after winning only 165 games (I think he has the fewest of anyone in the HOF who wasn't a reliever–and I also can think of few who would argue that he doesn't belong there) is testimony to the need to rigorously monitor pitch count. Perhaps, except that Koufax's well-known arthritis (he used to ice down his elbow for up to 2 hours after each outing) resulted from an injury running the bases, not from pitching. Pitchers weren't coddled the way they are today. It's been suggested that better swing guidance has resulted in better hitting players requiring pitchers throwing with greater finesse or power. Perhaps. I'm pretty sure that's not true for the knuckleball pitcher, though. Having watched Jim Palmer pitch, I doubt the idea applied to him, either. His slider broke down and his fastball would rise. I don't care how good your swing might be, you still have to figure out how to contact the ball, and that's something batters had a devil of a time doing. The same was true of Bob Gibson. Now Denny McLain and Steve Stone are great examples of a pitcher destroying their arms in the name of pitching performance. But I don't think that was as common as some would suggest, and if their arms weren't coddled, they would be fine dealing with today's batters. After all, there haven't been a surge in HR production, or even extra bases (esp triples), which I might expect if the effects of the improved swings were that probative. I don't think there have been two seasons where there was improved hitting performance (absent PEDs) requiring changes in pitching staffs along the lines that we've seen. It's like writing–with PCs and MS Office, writing has become easier, far easier, than in time past. Has writing become any better? Has the average speed of a fastball increased during the past 20-30 years? What about the degree of breaking balls? In almost 50 years, no one has come close to the Koufax curve. That wasn't a matter of an "improved arm" and it would have broken just as much (well, maybe less well with reduced amounts of pitching) today as it did then.

In short, I look forward to the rise of the knucklers and the return of the 4 man rotation and pitching staff sanity. 

Aug

6

 This is an interesting article for the statisticians on this site:

"How Aaron Clauset Discovered a Pattern Behind Terrorist Attacks…and What it Told Him":

"Another concern remained: The data was too clear, the pattern too obvious. "Surely, someone has thought of this before," Clauset recalls thinking. But the only example they could find of similar research was the work of Lewis Fry Richardson, an English mathematician and Quaker pacifist who drove an ambulance in World War I. Along with doing major work in the fields of weather forecasting and fractals, Richardson would go on to analyze all the wars from 1815 to 1945 and conclude that they followed a power-law distribution; he found the same pattern in gang killings in Chicago and Shanghai"

and

"At the prestigious Joint Statistical Meetings this August, however, Clauset and Woodard will return to the prediction issue: They will present new research concluding that if the level of terrorism violence remains stable — as it has, more or less, for decades — there's roughly a 30 percent chance of an attack similar to 9/11 in the next decade. To hedge their bets, they'll also note that if terrorism violence begins to ebb, that chance drops to just 7 or 8 percent. But if terrorism gets worse, the chances of another 9/11 increase significantly — to 80 percent."

Stefan Jovanovich writes:

Richardson's fundamental observation is one that anyone of sense has to agree with - "world" wars are disastrous beyond measure. The 2 World Wars– the only magnitude 7s in Richardson's classifications — were responsible for 3 out of every 5 wartime deaths in the period between the end of the Napoleonic War and VJ-Day. But those of us who cannot hack the math find one aspect of Richardson's study to be just plain bad history. By using logarithms he manages to fit a number of wars of fundamentally different importance into the same "magnitude" — a Richardson 6 war can have anywhere from 316,228 to 3,162,278 deaths.

One other random observation: those of us who love the 18th century above all others (Mozart, Washington, Watt, and Lavoisier) have this fact in our favor — the 1700s were the one period in modern (i.e. post 1400) history that had a complete absence of mass killing in war.

Statistics from Peter Brecke, Georgia Tech.

Aug

2

 After putting up a chart of the Dimson, Marsh and Staunton very thorough enumeration of buying every stock in the US, from 1899 to date showing that $1 grew rather steadily to 25507  (the 1929 and 2008 declines look like blips), my college roommate Jim Wynne, in the audience, who recently won the equivalent of the Nobel prize in engineering for inventing laser surgery asked, "how could you say buy and hold" which was sung beautifully by Tamra Paselk (to the tune of "Night and Day"), is great when stocks like Kodak and Xerox have fallen on such hard times or gone bust and so few of the Dow stocks of 1899 are here today.

the chart

the table

 I explained that the complete enumeration of the triumphal trio covers all bad and all good (they even take account of the total zero of Russian stocks in 1914 and China in 1944), and there are many bad and many good that make up the totality. But on the spot, I couldn't think of a physical example to show that taking one instance of an experiment, an anecdotal approach, the flash of one outlying proton in a collider, did not determine the average results, and that diversification of 12 stocks would give a correlation of 95% or so with the results of the trio.

What physical analogy should I have used to educate my erudite former roommate who is now working on a cure for skin cancer with the same lasers he used to create laser surgery.

Shane James writes: 

What about the growth a Sequoia Tree. More generally the Allometry involved. The tree grows out & up even though some branches fall by the wayside and die.

Pitt T. Maner adds: 

I would imagine that there are some biological curves under certain restrained conditions that could be overlain for effect and be quite memorable.

Bacterial growth curve

Or groundwater testing where pumps are turned on and off over intervals and cause drawdowns that quickly rebound once the pumps are turned off.

Victor Niederhoffer adds: 

As to the reason that it goes up 30,000 a century, I attribute it to the power of compounding along with the required rate of return on investments, and the amount that the entrepreneurs must pay the investor to obtain risk capital, with the spillover effect to publicly traded issues. Amazing a 9 % compounding leads to 200 times as much as a 5% compounding (from memory) after 100 years. That's why Asian stocks are so much better values than ours. 

Steve Ellison adds: 

An event that is vivid, such as the failure of a once-giant company, may not be at all representative. Consider airplane crashes, for example, which cause many to fear flying. At one moment in 2011, for example, over 5000 airplanes were airborne over the US. How many of them crashed? Probably none.

Similarly, 20 times as many people are killed by falling coconuts as by sharks. I'm still waiting for the movie Return of the Killer Coconuts.

Gary Rogan writes: 

The simplest, albeit imperfect, analogy seems to be the number of species on earth. It is estimated that over 98% of all known species are extinct and it's likely that well over 99% of all species that ever existed are extinct.

In addition to the constant relatively steady elimination of species there are mass extinctions:

"In the past 540 million years there have been five major events when over 50% of animal species died."

And yet, will all of that biodiversity has increased over time:

"Based on analyses of fossils, scientists estimate that marine biodiversity today is about twice the average level that existed over the past 600 million years, and that biodiversity among terrestrial organisms is about twice the average since life adapted to land about 440 million years ago. Fossil records also indicate that on average species exist for about 5 to 10 million years, which corresponds to an extinction rate of 0.1 to 1 species per million."

Jul

29

 A few weeks ago I had the opportunity to see a mother nightjar bird protecting her baby chick at Jonathan Dickinson State Park here in South Florida.

Upon approach of her nest, the nightjar began to hop and roll across the ground like she had a broken wing. The poignant act completely fooled me but an experienced biologist in my company said," look over here" and there on the ground was a perfectly camouflaged baby chick.

The nightjar mother can continue such deception to lure predators long distances away from her nest.

Jul

26

 The full moon was discussed many years ago on this site by Mr. McDonnell with respect to markets with results "consistent with randomness". It would seem though that the day(s) after a full moon and particularly near the end of a difficult week might cause some sleep deficit effects to show in sensitive individuals–but perhaps extra coffee is used to counter such things.

"Blame Bad night's Sleep on the Moon":

Malcom von Schantz, a sleep and circadian researcher at the University of Surrey in the U.K., called the new findings "fascinating" because they run counter to the results of several other studies that failed to find a link between the moon and human behavior.

"Essentially, every report published to date has failed to show significant associations between the phase of the moon and any number of behavioral and physiological parameters," von Schantz, who was not involved in the study, said in an email."This is the very first report that suggests an association with one behavior, sleep, and of course it's a behavior that in our species normally occurs at night."

"Evidence That the Lunar Cycle Influences Human Sleep":

We found that around full moon, electroencephalogram (EEG) delta activity during NREM sleep, an indicator of deep sleep, decreased by 30%, time to fall asleep increased by 5 min, and EEG-assessed total sleep duration was reduced by 20 min. These changes were associated with a decrease in subjective sleep quality and diminished endogenous melatonin levels. This is the first reliable evidence that a lunar rhythm can modulate sleep structure in humans when measured under the highly controlled conditions of a circadian laboratory study protocol without time cues.

Jul

22

 Scientists have defined a new category of storm upon reviewing 30 years of data, most often found in Australia, China and the US:

"Brown Ocean Can Fuel Inland Tropical Cyclones"

Before making landfall, tropical storms gather power from the warm waters of the ocean. Storms in the newly defined category derive their energy instead from the evaporation of abundant soil moisture – a phenomenon that Andersen and Shepherd call the "brown ocean." 

Jul

18

 The Perfect Swarm by Len Fisher is a model of a what a good quasi scientific book simplifying recent findings in the theory of complexity, chaos, crowd behavior, decision making, swarm intelligence, group think and social behavior in humans and insects should be. The author is a physical scientist and inventor with uncommon insight into many subjects that are relevant to our everyday and market life. Typical is his perfect one sentence summary of the Madoff fraud: "Investors collectively deluded themselves into thinking that he must be cheating on their behalf rather than his own." Exactly. There was always the hope that he would front run the limit orders of the over the counter market making operation he ran on their behalf and this led many to gloss over the complexities and fuzzy explanations of how he purportedly made profits for the investors, marks, and stooges. What's surprising is that someone not close to the markets could see this so clearly. It's typical of the Fisher insights and laser ray reporting of many of the studies and anecdotes in the complexity field.

The book opens with a discussion of how locusts and bees manage to go about their lives and find food. They follow three simple rules with wide application. Avoidance, alignment and attraction (move toward the average). These rules when quantified explain a myriad of patterns in human, fish, bird, and insect behavior. How would they apply to markets? Certainly the alignment would relate to following the trend. Attraction would be a form of moving to the limit orders and stop orders. And avoidance—reduce vig. "Computer simulations have shown that synchrony emerges because each locust acts as a self propelled particle whose velocity is determined by those of its neighbors according to a simple rule". Robots can be trained to find the right place to move to with similar rules and humans in crowds follow these rules whenever the density reaches more than 1 person a foot. We don't flap our wings but keep our arms close to our sides. Instead of diving we shorten our steps. The bees and ants get to their food sources by following in the paths of a knowledgeable leader. The investors tendency to follow Buffett, Gross, Soros, and the leaders of the Fed springs to mind.

There is a nice discussion of how averaging can lead to better estimates of things like weights, marbles, or answers to tests. Galton is treated respectfully here although Fisher is quite clear that he is a fellow traveler and agrarian who believes strongly in the idea that has the world in its grip, and is in the anti Bush, climate change is the source of all evils camp. I didn't like the discussion that follows showing how Page's diversity theorem can lead to reducing error as a function of diversity. It seems to me to be an identity similar to the corrections made for between group and person means in standard experimental designs.

The discussion of group think was particularly valuable to me. He shows how it led to the Columbia and Challenger disasters. He reveals the little known fact that Feynman's demurrals to the group think that administrative failure was the cause but that physical problems with the O Rings resilience to cold was the cause were suppressed. The leader of the report, Rogers, a flexion of the Rubin, Paulson persuasion considered Feynman a trouble maker and tried to keep Feynman's conclusions from the public and his own group members. Apparently similar suppression of divergent and unpopular views figured in various assassination reports that have come down the pike. A strong leader can cause many errors and damage by not being open to divergent views, as we know from the Lehman bankruptcy, and the mortgage crisis. I know of many who traded derivatives with big losses who also would have benefited had they encouraged a Feynman in the wings and paid more attention to such a independent thinker. Perhaps it would be advisable for the bearded chair to encourage diverse views about the wisdom of the bailout and quantitative easings, and whether there is more harm to the common man in such than the benefits to the banks whose bad assets are being purchased.

The most insightful chapter of the book, and the one with the least tarnish from hauling in the grab bag of pseudo scientific psychological studies that make up the unfalsifiable, contrived, irrational behavior paradigms that come down the pike from Kahneman and his followers in New Mexico is the chapter on decision making under uncertainty. He lists five ways of making decisions: Recognition, fluency, tallying, taking the best, and satisficing. All of them are highly relevant for market participants. The chapter is footnoted with good summaries of the literature in each field. A typical finding is that just making a list of the good and bad reasons for doing something and putting them on a balance scale without weighting leads to better predictions than regressions. There is also a nice summary of satisficing citing Mosteller's work that a good rule is to take the first third of the applicants, see which is best, and then choose the next one from the remainder that exceeds the best. This rules leads to amazingly good chances of finding the best 5 or 10% in a sample. I have always felt that applying this rule to the first 10 extremes in a day or week might lead to similar beneficent results. An interesting aside as to how the great social media companies Yahoo, Amazon, Google modify these rules for their fast moving markets to hire, fire, set boundaries, and exit ensues. Regrettably many of the star companies mentioned like Nortel, Orticon, and Enron have fallen on hard times using these heuristics. 

There are too many good anecdotes in this book to pass over. For example, James Thurber reports in his bio that everyone in Columbus, Ohio, started running madly thinking that a dam had broken instigated by just one random sighting of a person running with "practically everyone in the city following him madly in the first half hour". In talking about the dangers of group think he points out that if we had not believed in basic research we would never have had x-rays, antibiotics, radio, television, or cars with inflatable tires. It is refreshing to know that in many panic situations, in crowds trying to escape fires and crushes, "the overwhelming reactions of people to the crowd pressure was to attempt to help those nearby who seemed to be in trouble".

The book is well footnoted with 72 pages of footnotes with discussions and very well indexed. If it weren't for the defects in many of the quasi scientific studies he cites, it would be useful to a wide range of investors without digging deeper into the subject. However, on the mathematical and statistical aspects of the studies he cites, the author often fall prey to the promiscuous hypothesis bias wherein whatever results come out from the study, he attributes to a real behavioral regularity rather than a random permutation of the data or a reasonable attempt at rationality when putting the contrived laboratory situations into a real life framework. One highly recommends this book for learning, stimulation, and profit. 

Pitt T. Maner III comments:

Great review. I find it interesting these processes are at work with some of the simplest organisms as well:

"In the mid-1990s, Ben-Jacob discovered two strains of bacteria that form some of the most spectacular patterns of collective behavior known. When grown on thin, hard surfaces with limited nutrients, a colony of the soil-dwelling facultative anaerobe Paenibacillus vortex secretes a lubricating fluid that allows the cells to swim and form large colonies with intricate fractal-like branching patterns. At the end of each branch, a swirling vortex of bacteria expands its edges.

Within the swarm, which typically contains a greater number of cells than the number of humans on Earth, lanes and highways much more complex than those formed by shiners or wildebeests transfer information and even cargo throughout the colony."

from "Crowd Control"

I also found this  presentation on "Learning from Bacteria about Social Networks" fascinating. The same guy has also compared the stock market to an epileptic patient.

Also great is the Microbes Mind Forum and Dr. Ben-Jacob's bacteria as art.

Jul

18

 There must be a way of measuring the hills and valleys and their durations. Possibly with survival statistics. And then computing similarities of the present to the most egregious bad or remarkably good ones in the past. Once this similarity is measured, presumably with a squared distance, the similarity would be correlated with subsequent action. I would imagine geologists and modern statisticians have many rules of thumb for computing such distances of current to past.

Rocky Humbert writes: 

I think we both know that the vast corpus of academic research demonstrates no systematic predictability from simply looking at price charts.

The issue is, when one is otherwise bullishly or bearishly inclined, can the chart's characteristics help an investor improve his/her results?

For Bruce Kovner et al, the answer is yes. "Fundamentalists who say they are not going to pay any attention to the charts are like a doctor who says he's not going to take a patient's temperature."

Pitt T. Maner III writes:

It does look at times as though certain "faulted" structures get reactivated and blocks rise again in the basin and range of the market (with reference to HPQ, GMCR, NFLX, SODA, CMG, et al.) Are they more susceptible to future reversals based on past history?

"Ultimately, the broader scientific challenge in the Basin and Range Province is to compare geologically determined rates and styles of deformation to contemporary strain fields determined by GPS to see if regions of accelerated extension are relicts of geologically recent activity or precursors of future activity. Hopefully, the new compilation of faults in the Basin and Range will provide an ever-growing archive of paleoseismic information that will encourage such comparisons."

from "Summary Of the Late Quaternary Tectonics of the Basin and Range Province in Nevada, Eastern California, and Utah
"

Gary Rogan writes: 

Assuming random news flow, something that has really negative sentiment will react with a larger upward move to a positive piece of news than something that has really positive sentiment. Clearly something that has been going down for a long time is likely to have negative sentiment, therefore it is more susceptible to a reversal than something that has been going up for a long time (which is actually incapable of a reversal on positive news unless it's "sell the news", and the effect of similar positive news is also likely to be smaller). On the other hand if there are no positive news or a state of illiquidity is achieved than negative sentiment doesn't help. So the trick is to look for things that have SOME chance of positive news and are not near bankruptcy.

Jul

3

 One must always remember the purpose of markets. To take from the weak and give to the strong. To pay for the enormous infrastructure of the top feeders. To transfer money from the common man to the flexions. To maintain hope for the public at the lower levels so that they can provide the food for the higher levels.

When we see an announcement, a report, we must ask ourselves as Elton did, here comes the badger. How does he live. And how does he get his food and how does he reproduce. Who are his prey besides ourselves. How can he maximize our dissipation of energy so he can eat us with the least possible effort. A framework like this and related ones that you my colleagues on the site can augment I believe is helpful.

Please let me add:

To induce you to be stopped out at the worst possible levels like the round yesterday, but when you don't use the stops, as the Senator and Mr. Humbert like to say, it's certain ruination also. In Old Man and the Sea they have a Spanish expression for something very bad like the Spurs loss to Miami in the sixth game. It's something like "phttthhhhhf". But it means "bad, very bad". Yes, but it's the only market we have. And how can all the evil levels of the troposphere induce you not to buy and hold which would overcome all this.

Pitt T. Maner writes:

Was that term asqueroso?

synonyms: repugnante, repulsivo, repelente, inmundo, puerco, cochino, guarro, marrano, cerdo, sucio, mugriento, cochambroso, nauseabundo, vomitivo, corrompido, infecto, vicioso, deshonesto

Also Hemingway uses the term "salao" for jinxed and unlucky. It is related to "salty" in Spanish but has the unlucky meaning in the Carribean region:

He was an old man who fished alone in a skiff in the Gulf Stream and he had gone eighty-four days now without taking a fish. In the first forty days a boy had been with him. But after forty days without a fish the boy's parents had told him that the old man was now definitely and finally salao, which is the worst form of unlucky, and the boy had gone at their orders in another boat which caught three good fish the first week. It made the boy sad to see the old man come in each day with his skiff empty and he always went down to help him carry either the coiled lines or the gaff and harpoon and the sail that was furled around the mast. The sail was patched with flour sacks and, furled, it looked like the flag of permanent defeat.

Jun

26

 Online publication Nautilus Magazine has an edition devoted to uncertainty.

Here are a couple of quotes from different essays:

Nautilus' second issue is all about the uncertainty that is baked into our modern world. We explore how everything from quantum particles to humans themselves turns out to be undetermined in ways that upset expectations. Even mathematics itself—the language of logic—includes statements that can be proven to be neither true nor false. In this issue's first chapter, "Uncertainty in Nature," we tell you stories about the boundaries of the knowable.

from "Uncertainty" by Michael Segal

Put another way, our cognition, so limitless in the development of the natural sciences, seems the most fallible when, in walking down the street, we meet a stranger coming from the other direction, and, symmetrically polite, both move left and right in a frustrated attempt to make way.

from "The Coin Toss and the Love Triangle" by Simon Dedeo

Jun

16

 "Infinite Potential: The Life and Times of David Bohm": 

Faced with explaining gyroscopic motion, most physics students learn the various formulae, involving conservation of angular momentum, and produce an explanation in a relatively mechanical and formulaic fashion; but Bohm needed a direct perception of the inner nature of this motion. Once he was walking in the country, he imagined himself as a gyroscope, and through some form of muscular interiorization, he was able to understand the nature of its motion. In this way he worked out, within his own body, the behaviour of gyroscopes. The formulae and the mathematics would come later, as a formal way of explaining his insight.

From very early on in his scientific career, Bohm trusted this interior, intuitive display as a more reliable way of arriving at solutions. Later, when he met Einstein, he learned that he too experienced subtle, internal muscular sensations that appeared to lie much deeper than ordinary rational and discursive thought.

Without explictly knowing it at the time, Bohm had returned to that ancient maxim "as above, so below", the medieval teaching that each individual is the microcosm of the macrocosm. Bohm himself strongly believed himself part of the universe and that, by giving attention to his own feelings and sensations, he should be able to arrive at a deeper understanding of the nature of the universe

This particular skill remained with Bohm throughout his professional life. His colleague at Birckbeck College, Basil Hiley, once remarked, "Dave always arrives at the right conclusions, but his mathematics is terrible. I take it home and find all sorts of errors and then have to spend the night trying to develop the correct proof. But in the end, the result is always exactly the same as the one Dave saw directly".

Pitt T. Maner III adds: 

I found this excellent interview with the gentleman in which he presents his views on perception and the necessity of incorporating many viewpoints in order to gain greater understanding.  

Jun

11

 A quote from an interesting article follows below that refutes the conventional images of drowning. Closest I have come to drowning as a kid was at the Y when a smaller child, playing around, jumped on my back and put me in a choke hold while I was swimming underwater. It was quite a tussle to get him off and make it back to the surface–the nearby lifeguard didn't see it.

The Instinctive Drowning Response – so named by Francesco A. Pia, Ph.D., is what people do to avoid actual or perceived suffocation in the water. And it does not look like most people expect. There is very little splashing, no waving, and no yelling or calls for help of any kind. To get an idea of just how quiet and undramatic from the surface drowning can be, consider this: It is the number two cause of accidental death in children, age 15 and under (just behind vehicle accidents) – of the approximately 750 children who will drown next year, about 375 of them will do so within 25 yards of a parent or other adult. In ten percent of those drownings, the adult will actually watch them do it, having no idea it is happening (source: CDC). Drowning does not look like drowning…

Full article here, "Drowning Doesn't Look Like Drowning"

Jeff Watson adds:

As a surfer, I have saved more than a few people from drowning. Every instance was with them getting caught in the rip and trying to get out by swimming against the current and becoming exhausted. I would paddle over to them and insist that I tow them in to shore. Often, people would refuse my assistance, not realizing their danger. I sat on my board nearby, waiting for them until they changed their mind, or started to swallow water or go under. My Senior Lifesaving teacher once told me that one needs to get control of the victim before you can make the rescue. My own technique is jabbing my thumb as hard as I can into the side of their rib cage (between the ribs) which makes them submit. And you're right, drowning does not look like drowning. Fellow dailyspec-er, George Parkanyi should recount his heroic life saving experience. 

Jun

7

 Short, short stories are a specialty of Lydia Davis, this year's Man Booker International Prize Winner. Perhaps it is a sign of the times given the stresses of modern life and lessening attention spans. Davis also has translated Proust for more patient readers.

"Lydia Davis Wins " :

Literary critic and scholar Sir Christopher Ricks, chair of the judges, said: "Lydia Davis' writings fling their lithe arms wide to embrace many a kind. Just how to categorise them? Should we simply concur with the official title and dub them stories? Or perhaps miniatures? Anecdotes? Essays? Jokes? Parables? Fables? Texts? Aphorisms, or even apophthegms? Prayers, or perhaps wisdom literature? Or might we settle for observations? "There is vigilance to her stories, and great imaginative attention. Vigilance as how to realize things down to the very word or syllable; vigilance as to everybody's impure motives and illusions of feeling."

Here is a sample from The Collected Stories of Lydia Davis:

The Fish Tank

I stare at four fish in a tank in a supermarket. They are swimming in parallel formation against a small current created by a jet of water, and they are opening and closing their mouths and staring off into the distance with the one eye, each, that I can see. As I watch them through the glass, thinking how fresh they would be to eat, still alive now, and calculating whether I might buy one to cook for dinner, I also see, as though behind or through them, a larger, shadowy form darkening their tank, what there is of me on the glass, their predator.

Jun

4

 I recently came across this interesting article:

"Hurricane Drones: Tiny airplanes and subs from University of Florida laboratory could be next hurricane hunters"

I would think that similar devices could be used for tornadoes and many types of remote sensing (with obvious military applications given "swarm intelligence" features).

'Kamran Mohseni envisions a day when the unmanned vehicles in his laboratory at the University of Florida will swarm over, under and through hurricanes to help predict the strength and path of the storms.

The tiny, autonomous craft — some fly, others dart under the waves — can spy on hurricanes at close range without getting blown willy-nilly, while sensors onboard collect and send in real time the data scientists need to predict the intensity and trajectory of storms: pressure, temperature, humidity, location and time.

Mohseni said people always ask him how the miniature flying machines — just 6 inches long and about the weight of an iPod Nano — can take on one of the monster storms.

"Our vehicles don't fight the hurricane; we use the hurricane to take us places," said Mohseni, the W.P. Bushnell Endowed Professor in the department of mechanical and aerospace engineering and the department of electrical and computer engineering.'

May

28

 An article in the Guardian raises a few hackles and starts a debate about how and where science is best done. Meanwhile the theory draws interest.

1)

…'In Weinstein's theory, called Geometric Unity, he proposes a 14-dimensional "observerse" that has our familiar four-dimensional space-time continuum embedded within it. The interaction between the two is something like the relationship between the people in the stands and those on the pitch at a football stadium - the spectators (limited to their four-dimensional space) can see and are affected by the action on the pitch (representing all 14 dimensions) but are somewhat removed from it and cannot detect every detail.'

and

'Whatever happens, says Frenkel, Weinstein is an example of how science might change in future. "I find it remarkable that Eric was able to come up with such beautiful and original ideas even though he has been out of academia for so long (doing wonderful things in other areas, such as economics and finance). In the past week we have learned about an outstanding result about prime numbers proved by a mathematician who had been virtually unknown, and now comes Eric's lecture at Oxford.'

2) and from de Sautoy's Op-Ed:

'Weinstein begins the paper in which he explains his proposal with a quote from Einstein: "What really interests me is whether God had any choice in the creation of the world." Weinstein's theory answers this in spades. Very little in the universe is arbitrary. The mathematics explains why it should work the way it does. If this isn't a description of how our universe works then frankly I'd prefer to move to the universe where it does!'

3) Jennifer Ouellette at Scientific American in defense of academic science:

…"This is what truly free and open scientific discussion of brave/bold new ideas looks like. The tradition is alive and well in that stuffy old academic establishment. I'll let Pontzen have the last word: At what point during this long and difficult process does it become legitimate to proclaim a breakthrough? It's a line in shifting sands, but that line has certainly been crossed. Du Sautoy – the University of Oxford's professor of the public understanding of science, no less – has short-circuited science's basic checks and balances. Yesterday's shenanigans were anything but scientific. Preach it."

May

24

 Modern cockroaches have been around since the early Cretaceous period (about 150 million years ago) so they obviously have something going for them. I know at the University of Florida entomology school students were known in the 80s to take Madagascar Hissing Cockroaches home to study and appreciate –  But more recently we have the following:


1.

"For decades, people have been getting rid of cockroaches by setting out bait mixed with poison. But in the late 1980s, in an apartment test kitchen in Florida, something went very wrong.

A killer product stopped working. Cockroach populations there kept rising. Mystified researchers tested and discarded theory after theory until they finally hit on the explanation: In a remarkably rapid display of evolution at work, many of the cockroaches had lost their sweet tooth, rejecting the corn syrup meant to attract them."

2.

Dylan Grice, an analyst formerly with Societe Generale, has written about cockroaches and discussed a simple portfolio strategy (which may be similar to others) named after them. But even he may have underestimated the evolutionary aspects of the roach "algorithm" (and its ability to avoid deadly baits).

'But what I like best about cockroaches isn't just their physical hardiness, it's the simple algorithm they use to survive. According to Richard Bookstaber, that algorithm is "singularly simple and seemingly suboptimal: it moves in the opposite direction of gusts of wind that might signal an approaching predator." And that's it. Simple, suboptimal, but spectacularly robust…'

Craig Mee writes:

Very good point, Pitt. Defense. Defense above all else keeps you in the game. Floundering in volatility and leaving yourself exposed with no control is always a bad move. As in trading so in life.

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May

9

 Cicadas leave the depths below to mate on prime numbers every 13 or 17 years so as not to be eaten by predators with normal life cycles of 1 or 2 or 3 years. One wonders whether other living things in nature have such prime cycles. The market has prime cycles. It likes to do overnight what a person that has to sleep can not take advantage of. If it's down big one night, and you cant sell a position, then it knows you can't stay up the next day or two, so it will go up to let others but not you get out of the position the next day. The idea can be generalized one thinks. 

Scott Brooks writes: 

Another thing to consider is the confluence of cycles leading great highs or great lows.

The year was 1998 (give or take a year or two) in MO. We saw the normal group of Cicadas make their appearance as always in the summer. But that year, we saw something that we only see once or twice a century. We saw all the groups of Cicadas make their appearance at once.

I remember the normal soothing sound that I fell asleep to at night as a child become a constant irritating and often uncomfortable non-stop drone of Cicadas looking for love.

My backyard was often a fog of Cicadas flying through the air. The carcasses littered the ground and the trees. It became almost impossible to even walk a short distance outside with several Cicadas landing on you. Of course, they were harmless, but that didn't matter. It was a little freaky to know that you were surrounded by millions upon millions of Cicadas many of whom just wanted a place and decided to make you that place.

Although I didn't try it, I'm sure that if I were to have stood perfectly still out in the yard for any length of time, I would have had dozens, if not hundreds of Cicadas covering my body.

I had never seen anything like it in my life before. It was as though the world had become a horror movie with Cicadas starring as the monster that ate the Midwest.

I have lived through Cicadas' highs and lows. I believe I prefer the normal years, when their population is steady and stable and they lull you to sleep at night with melodic song.

Pitt T. Maner III adds:

You have to wonder what the collateral, human irritation effects will be this time with the billions emerging from Brood II. More crime? More accidents? People who are even more sleep deprived than normal? An increase in the sale of ear plugs? Might be interesting to look back for things possibly associated/correlated with the 17-year cicada cycle (1996, 1979, 1962, … etc.)

"US Braces for Billions of Cicadas" :

"The insects, though harmless, are considered a nuisance both for their size and sheer numbers, not to mention the noise pollution that has been measured at up to 94 decibels, loud enough to drown out the sound of overhead planes according to the Associated Press."

(but they do have a couple of positive effects):

"Additional effects linked to the cicada mating swarms include higher yield for fruit trees, beneficial tree pruning, as well as an increase in bird populations."

 Oh, and by the way:

From the Dept. of Stork/Baby statistics.

Who knew there is a "cicada market theory"? If only some of the critters could make it into the city!:

1) "The Wall Street Cicada Index"

"The large insects — which emerge every 17 years — turn out to be great news for the market. During years when the critters appeared — going back to 1928 — stocks posted an average annual gain of nearly 21%, roughly double their historical average. That's a far better track record than most active mutual fund managers enjoy, the majority of whom tend to lag the market average over time." and 'Standard & Poor's market-data guru Howard Silverblatt agrees. When MarketWatch called to sound him out this morning, it turned out he'd already thought to check out the cicada market theory and had been pleasantly surprised by the results. Of course, that doesn't mean he's rushing to buy. Just like when we gaze at the stars or tea leaves, it's easy to read too much into stock market returns, he warns. "You can prove anything you want," he says. "Start with your answer, and I have the data to prove it."'

2) But the "flash crash" of May 1962 would have occurred during a cicada emergence too.

May

6

 The talented, entertaining and volatile Knicks put on quite a display the other night in winning their first playoff series in 13 years by taking Game 6 against the aging Boston Celtics. With less than 10 minutes to go in the final quarter and leading by 26 points the Knicks however managed to throw the outcome in question by rapidly giving up 20 consecutive points. Even the rants, raves and exhortations of the garishly orange-clad, sideline, Knickerbocker cheerleader, Spike Lee, seemed to no avail as shot after shot was missed and turnovers came in quick succession. I just happened to tune into the 3rd and 4th quarters and have never seen an NBA game ending quite like it.

The NBA record for the largest 4th quarter comeback is mentioned here:

"It's harder still to overcome a 29-point deficit with just 8:43 remaining in the game, as the Milwaukee Bucks did on Nov. 25, 1977 against the Atlanta Hawks."

One would think coaches, if they're not already doing so, would resort to instant statistical displays (such as those by Synergy Sports on large hand-held tablets in order to show players during timeouts where things are going wrong, but maybe this would be too much information for the already stressed athletes.

As the Chair mentioned earlier, too many isolations by Carmelo Anthony from 3-pt range is not always the best way to run an offense. I enjoyed this article about it: "One Reason Carmelo Anthony's Knicks Are Shooting Worse–Isolations".

Apr

30

 More Phys.org stuff, but this is pretty interesting. They are reconsidering the elastic rebound model of earthquakes. They call it "Plastic" deformation:

"Their work has not only defined the size of the area's average rupture, but also has shown that widely used earthquake modeling may not account for when the crust sometimes deforms permanently, rather than snapping back to its original position."

and

"The Cornell researchers have concluded that up to 10 percent of the surface of South America that overlies the subduction zone, which is responsible for the great earthquakes and runs along the western coast of the continent through much of Chile, has actually deformed permanently due to earthquakes. If that's the case in other places too, elastic rebound theory-based earthquake modeling might be too simple, Allmendinger said."

Here is the abstract for the paper with accompanying figures.

And here is a good picture.

Apr

26

 The Chair asked how can one trade the news.

"Big Data Gets Bigger: Now Google Trends Can Predict The Market":

Yesterday three economists, (Tobias Preis of Warwick Business School in the U.K., Helen Susannah Moat of University College London, and H. Eugene Stanley of Boston University) published an eye-opening paper that said Google Trends data was useful in predicting daily price moves in the Dow Jones industrial average, which consists of 30 stocks. Their research result:

An uptick in Google searches on finance terms reliably predicted a fall in stock prices.


"Debt" was the most reliable term for predicting market ups and downs, the researchers found. By going long when "debt" searches dropped and shorting the market when "debt" searches rose, the researchers were able to increase their hypothetical portfolio by 326 percent. (In comparison, a constant buy-and-hold strategy yielded just a 16 percent return.)

This was a 180-degree turnaround from earlier research, by Prof. Preiss published back in 2010.


Back in 2010, he used Google Trends data and found the opposite conclusion:


"The Google data *could not predict the weekly fluctuations in stock prices*. However, the team found a strong correlation between Internet searches for a company's name and its trade volume, the total number of times the stock changed hands over a given week. So, for example, if lots of people were searching for computer manufacturer IBM one week, there would be a lot of trading of IBM stock the following week. But the Google data couldn't predict its price, which is determined by the ratio of shares that are bought and sold."


What happened? Are people revealing more of their investment intentions in their searches?

The clue may be in looking at changes in the nature of what's reported on Google Trends. In a nutshell, the data is getting bigger, by getting finer, and faster.

Also, this is an interesting graph with current downtick in search and uptick in stocks.

Pitt T. Maner III writes: 

More research via Nature which references possibly useful search term analysis:

1) "Quantifying Trading Behavior in Financial Markets Using Google Trends":

'Crises in financial markets affect humans worldwide. Detailed market data on trading decisions reflect some of the complex human behavior that has led to these crises. We suggest that massive new data sources resulting from human interaction with the Internet may offer a new perspective on the behavior of market participants in periods of large market movements. By analyzing changes in Google query volumes for search terms related to finance, we find patterns that may be interpreted as "early warning signs" of stock market moves. Our results illustrate the potential that combining extensive behavioral data sets offers for a better understanding of collective human behavior.'

And a graph using a "Google Trends" Strategy claims to show this:

'Profit and loss for an investment strategy based on the volume of the search term debt, the best performing keyword in our analysis, with Δt = 3 weeks, plotted as a function of time (blue line). This is compared to the "buy and hold" strategy (red line) and the standard deviation of 10,000 simulations using a purely random investment strategy (dashed lines). The Google Trends strategy using the search volume of the term debt would have yielded a profit of 326%.'

2) A reference to Goodhart's Law:

'Furthermore, economists acknowledge that any transparently profitable strategy for playing the markets will quickly lead to a change in trader behaviour that cancels it out — a principle called Goodhart's law, after the British economist Charles Goodhart. "Social systems have the complication that the system may directly react to predictions being made about its behaviour," agrees Susannah Moat, a computational social scientist at University College London and a co-author on the study.'

Apr

10

 In reading Scorecasting, well reviewed and recommended by the chair, I came across a point that hits home when looking for statistical causal relationships. When x variable appears to be related to y variable, it is very possible that an undiscovered variable z has a much larger effect, perhaps on both variables. There are examples of this in the book, mostly thoroughly explained in the home field advantage. This is empirically shown to be true across, time, cultures and sports, running at an advantage of 55% to 70% in favor of the home team. Controlling for other things, crowd size does correlate very highly with the home team advantage. But changes is crowd size are shown to have no effect on players performance. Rather crowd size influences officials, but it is secondary affect. The primary affect is officials themselves who have a in bias (most likely unknown to themselves prior to this book) to favor home teams regardless of the fans. Crowd size amplifies or dims this already existing bias. Had the authors not researched deeper this point would have been lost.

Pitt T. Maner III writes: 

It is interesting that there are sites that keep statistics on the refs now too.

The held ball call near the end of the Louisville-Wichita St. Final 4 game by Karl Hess appeared particularly bad but you wonder what the factors and influences are that might have led to it. The game finish would have been much more enjoyable if the Shockers had had at least one last attempt at a 3-pointer to tie the game.

Was it the nearby presence of the Louisville coach Rick Pitino? An ego issue where the ref felt the need to decide the contest? Crowd influence? TV audience thoughts? Subconscious need to end the game and prevent possibility of overtime (desire to get off the court,)? Something a player said (need to payback for perceived questioning of previous call)? A whistle blown by mistake in a hurry with no means to take back (I never make a bad call in an important contest). Lots of possibilities.

Russ Sears writes: 

When watching a game, I have often thought that the bias in the ref could be spotted by whether or not they avenge a bad or close call on one side by giving the next close call to the opposing team. After a moment of reflection, the ref probably realizes he blew the whistle too soon or did not blow the whistle when he should have. However, it appears to me that the avenged even handed blown calls are often one sided. Yet when watching a game, my own biases would prevent me from "counting" this fair.

Perhaps the broadcasters in a national game could be counted on, but it appears to me they have a vested interest to give the losing team something to complain about. If I recall correctly, the tie-up was initially called a great defensive play by Louisville, but then changed to blown call.

Apr

8

 "Noisy Cicadas Come Back to Life After Years Underground":

(CBS News) If you live on the East Coast, fair warning, you're about to be invaded, but it's not the zombie apocalypse. It's actually an invasion by billions of creatures coming back to life after being buried since the 1990s.

In one of nature's great mysteries, the Brood II cicadas are expected to appear en masse along the East Coast this spring, which is a ritual nearly two decades in the making. The bugs will make their presence known with a buzzing racket that's been compared to the sound of a New York subway train.

"Brood II is a periodic cicada that hatches out every 17 years," said Craig Gibbs, an entomologist at the Wildlife Conservation Society's Queens Zoo. "The specific thing about these 17-year cicadas is they are going to be a very dark colored body. They have really bright red eyes, and they also have bright red wing veins."

For the New Yorkers interested in Cicada Tracking there is an event tonight at
Brooklyn Brewery (it seems to be sold out but other events are shown and Staten Island Museum has several events
planned
.

Also, music inspired by Cicadas.

Chris Tucker writes: 

One wonders if there will be a coincidental increase in the population of Cicada Killers– a frighteningly large (although non agressive) wasp that burrows into the ground, captures Cicadas and lays its eggs in them.

Mar

22

 I found a couple of (modern and historical) examples of adaptations made by the wealthy in response to increased taxes, rules and regulations. In a confiscatory environment keeping a low or unknowable profile and building below the "water table" appears de rigueur.

1) The Window Tax was introduced under William III in 1696. At the time, windows were a luxury, and it was likely the number of windows in a property would be in proportion to the size of the property and thus to the wealth of the owner. It was this seen as a progressive tax and a prototype to income tax, introduced 146 years later by William Pitt the Younger. Nevertheless, the tax was unpopular, and avoidable if windows were bricked up, as many were (and one can still see many examples of windows that were bricked up for this reason in London today). Indeed, the term 'Daylight Robbery' is thought to have its provenance in this era. The Window Tax lasted 156 years until 1851.

2)

That's just what the plutocrats are doing: digging down. Maggie Smith, of the London Basement company, which carries out basement renovations, dates the craze to the early to mid-1990s, when she noticed increasing numbers of people wanting to renovate their musty old basements. "It started quite small, with people doing 30 to 40 square meters, generally under the front of a standard Victorian London house," she says. "Then they began digging out under parts of gardens, then entire gardens, installing light wells and glass bridges to bring in natural light." Soon they built underground recreation centers, golf-simulation rooms, squash courts, bowling alleys, hair salons, ballrooms, and car elevators to the underground garages for their vintage Bentleys. The more adventurous installed climbing walls and indoor waterfalls.

source

3) The Wiki for "plutocracy" makes a comparison between the City of London and Lake Buena Vista, FL. 

Rocky Humbert adds: 

Here's another example of real estate tax arbitrage: Central Amsterdam ages back to over 700 years, but most of the buildings seen today were built in Amsterdam's "Golden age", about 250-500 years ago. The "Golden age" was the period when most of what is now known as central Amsterdam was built. Some people think it is Amsterdam's best architectural achievement. Probably the most prominent building built within this time period is the canal house. These line all the canals in the centre of Amsterdam. Every canal house was built to be unique from any other, though built with the same shape, each one was personalized with an ornamental piece, such as the gables and plaques. Another method was to put very decorative carvings on the "neck" of a house. This is called "necking".

During the time period in which these houses were built, your house taxes depended on the frontage. Meaning your taxes were determined by the width of your house. Therefore the sneaky Dutch built their houses deep and narrow to avoid severe taxing. For this same reason the staircases are very narrow and low, making it impossible to take furniture up and down them. To solve this problem hooks were put at the top of every house to winch goods up and pass them through the windows on the needed floor.

Mar

20

I noticed that Mr. Faber is an avid surfer and that just today he is launching his pay for premium research service.

Surfers seem to be well represented amongst the successful businessmen here in Florida.

Might an increase though in customer demand for financial advice and the frequency of email promoting such have market implications?

Mar

18

For the Floridians or visitors to Florida. I highly recommend The Florida Museum of Natural History (FMNH) in Gainesville, located on the west side of the University of Florida campus (UF not FSU!). It is very educational for kids and adults alike. It's somewhat centrally located for those living in Florida.

They are now featuring the giant snake Titanoboa from 60 million year old coal deposits in Colombia. A nice thing about the museum is that there is an art museum next door too.  And to top it off a large theatre is a stone's throw away also. There is usually adequate parking and the location is easy to access coming off I-95.

Full disclosure!: Many years ago as a geology student I helped the FMNH with the task putting numbers on and cataloging some of the Norman Weisbord collection of fossils from Cabo Blanco and Playa Blanca, Venezuela–a very unusual assemblage of large marine shells and other marine fauna (representative of how big species can get under the right conditions). Dr. Weisbord was an important paleontologist and petroleum geologist who helped with oil exploration efforts in Venezuela. Weisbord was quite a collector.

The FMNH director was my paleontology professor at UF.

Mar

12

 This book, The Six Sources of Collapse by Charles Hadlock, looks like a very interesting book that is related to recent discussions by specs.

Beginning with one of the most remarkable ecological collapses of recent time, that of the passenger pigeon, Hadlock goes on to survey collapse processes across the entire spectrum of the natural and man-made world. He takes us through extreme weather events, technological disasters, evolutionary processes, crashing markets and companies, the chaotic nature of Earth's orbit, revolutionary political change, the spread and elimination of disease, and many other fascinating cases.

His key thesis is that one or more of six fundamental dynamics consistently show up across this wide range. These "six sources of collapse" can all be best described and investigated using fundamental mathematical concepts. They include low probability events, group dynamics, evolutionary games, instability, nonlinearity, and network effects, all of which are explained in readily understandable terms.

Almost the entirety of the book can be understood by readers with a minimal mathematical background, but even professional mathematicians are likely to get rich insights from the range of examples. The author tells his story with a warmly personal tone and weaves in many of his own experiences, whether from his consulting career of racing around the world trying to head off industrial disasters to his story of watching collapse after collapse in the evolution of an ecosystem on his New Hampshire farm."

You can find several pages from Dr. Hadlock's book on googlebooks here.

Mar

4

 1. A sad story. 

'Officials at the Seffner home where a sinkhole swallowed a man late Thursday call it a "chasm" and say it will continue to grow.
At a news conference this evening, Hillsborough County sheriff's Deputy Douglas Duvall, the first emergency responder on the scene, said he didn't know what to expect when he entered the house. Inside, he found the entire bedroom floor had collapsed, and Jeremy Bush was in a hole 10 feet deep, trying to climb out. Duvall managed to pull Bush out.

Jeremy Bush jumped into the hole trying to rescue his brother Jeffrey Bush, who was in bed when the sinkhole opened up beneath him.

Engineer Larry Madrid called the situation "unprecedented" and that the edges of the hole are very steep and very unstable, which means it is likely to continue to expand.'

2. The Florida Geological Survey website on sinkholes.

3. The Winter Park Sinkhole swallowed a Porsche dealership in 1981.

4. "You can almost predict sinkholes will occur when it's dry and lots of pumping occurs or when water levels are low and we get a big rain, or when there's a need to pump large quantities of groundwater over a short period of time," Ann Tihansky, a scientist with the U.S. Geological Survey, told The Times. "They are definitely tied to specific conditions or events."

5. Tihansky's paper on sinkholes in west-central Florida  (good overview of the problem).

Mar

3

 "Hugo Chavez's Legacy"

Chávez's sustained electoral success is remarkable because he managed to achieve it despite a dismal economic and social performance. Since 1999, the year he took over the presidency, Venezuela has had the lowest average GDP per capita growth rate and the highest inflation of any Latin American country except Haiti. It has also seen a fivefold increase in assassinations to arguably the highest murder rate in the world. In spite of having the largest oil reserves in the planet, he managed to reduce Venezuela's share of OPEC oil output from 4.8% to around 3%. He also managed to stimulate the largest out-migration of Venezuelans in memory.

David Lillienfeld writes: 

Your operating assumption is that the election was an honest one. I don't think one can assume that.

Pitt T. Maner III comments: 

I think the writer of the article, Ricardo Hausmann, an economics professor at Harvard (Director of the Center for International Development there and also a former Venezuelan Minister of Planning) makes it fairly clear that Chavez held on to power dishonestly using a mixture of 4 techniques. The techniques have a certain familiar sound and have been used by others in the region. A touch of Machiavelli. With cronyism on a massive scale using enormous petroleum revenues and additional borrowing.

One wonders how successful the post-Chavez transition will be and what impacts it will have on oil and regional affairs.

At any rate, Hausmann writes in the article of Chavez's methods:

"First, undermine checks and balances. You can use it to eliminate any separation between party and state, so as to make government social programs a privilege of the loyal, not a right of all deserving citizens. Create a very large civilian army of political activists that are handsomely compensated by the state for their party work. Limit individual rights, expand controls on everything, including prices and access to foreign currency, and give yourself the power to nationalize any business you choose. That way, people will not want to get on your bad side. "Judicialize" politics by using the courts to put your enemies in jail or threaten them with prosecution. Make it really costly for people to oppose you. Let your collaborators steal generously, and make sure that they know you know about it. That way, they will never dare to betray you.

Second, dominate the airwaves. Limit the airing of critical views with carrots, such as government spending on ads, or by threats of fines, jail or expropriation. Act on these threats with some regularity to refresh people's memory. Leave some room to your adversaries but make sure you achieve a 30-to-1 balance of airtime. That way you can create your own narrative and prevent them from creating theirs.

Third, in choosing your narrative, be creative. Don't be limited by truth, reality or common sense. If your country does not have an external enemy, invent one. Whenever you fail, blame a conspiracy. Given your control of the airwaves, by the time people find out there is no truth to your old lies, you will have created 20 new ones.

Fourth, dehumanize your adversaries. Don't debate them or grant them any form of moral recognition. Never extend the phrase "my fellow citizens" to include those that don't vote for you. Borrow a page from the 1930s and adopt a worldview in which institutional formalities only lead to gridlock, to the benefit of the enemy. Ask for complete delegation of power from the "people" to their "dear leader" so that he can crush the enemy. Dispense with other complicated formalities. "

 

Mar

1

 Irving Kahn is the oldest trader on Wall Street.

Here is a picture of Irving Kahn included in special free section of Nature on aging.

Mr. Kahn is now 107.

Correction:

World's oldest Value Investor. Duly noted (hat tip to Mr. Melvin) that Irving Kahn is a former Ben Graham assistant and likes to buy and hold for long time– and not really a "trader" per se.

From the WSJ:


Discipline has been a key for Mr. Kahn. He still works five days a week, slacking off only on the occasional Friday. He reads voraciously, including at least two newspapers every day and numerous magazines and books, especially about science. His abiding goal, he told me, is "to know much more about the stock I'm buying than the man who's selling does." What has enabled him to live so long? "No secret," he said. "Just nature's way." He added, speaking of unwholesome lifestyles: "Millions of people die every year of something they could cure themselves: lack of wisdom and lack of ability to control their impulses."

Here is a link to his current portfolio (he includes a land-based driller). 

Leo Jia adds: 

Wondering if the strategy of buy-and-hold can make one live longer than the strategies of short-term trading. It may seem to have some merit in the sense that a buy-and-hold'er has a very long-term prospect, and the long-term mind in-turn affect his body in ways of body-mind interaction.

Feb

22

 This is a nice piece of writing revisited, from an Alabama grad by way of NJ. A touch of the butterfly effect with the deleterious effects of reduced patronage suggested here. My Way or the highway–gangster-style resonations:

Sinatra with a cold is Picasso without paint, Ferrari without fuel — only worse. For the common cold robs Sinatra of that uninsurable jewel, his voice, cutting into the core of his confidence, and it affects not only his own psyche but also seems to cause a kind of psychosomatic nasal drip within dozens of people who work for him, drink with him, love him, depend on him for their own welfare and stability. A Sinatra with a cold can, in a small way, send vibrations through the entertainment industry and beyond as surely as a President of the United States, suddenly sick, can shake the national economy.

Read more: Frank Sinatra Has a Cold - Gay Talese - Best Profile of Sinatra - Esquire

Feb

21

It's time for another article roundup from me. This time around I found a couple of interesting articles related to universality.

1. "Spacing out: Plotting the distance between individuals"

"That internal calculation of impending impact kicks in and helps carve a comfortable space every time a starling swoops in to negotiate a spot on a wire and every time you pull up behind another car at a stop light."

2. "In Mysterious Pattern, Math and Nature Converge"

'In 1999, while sitting at a bus stop in Cuernavaca, Mexico, a Czech physicist named Petr Šeba noticed young men handing slips of paper to the bus drivers in exchange for cash. It wasn't organized crime, he learned, but another shadow trade: Each driver paid a "spy" to record when the bus ahead of his had departed the stop. If it had left recently, he would slow down, letting passengers accumulate at the next stop. If it had departed long ago, he sped up to keep other buses from passing him. This system maximized profits for the drivers. And it gave Šeba an idea.

"We felt here some kind of similarity with quantum chaotic systems," explained Šeba's co-author, Milan Krbálek, in an email.

Feb

18

 As a geologist whose first job was returning library books to shelves and who later had stints as a bag boy in an uncle's grocery store, I would be the last to underappreciate the efforts of the stacking professions. The following quote, however, is quite amusing on many levels:

"The next time somebody goes in - those smart people who say there's something wrong with this - they go into their supermarket, ask themselves this simple question, when they can't find the food they want on the shelves, who is more important - them, the geologist, or the person who stacked the shelves?"

But egads, what would the "snobbish"and "useless" job seeker do without the beneficence of the government secretary? After all making men small and needy is hard work.

Can one say the odds are stacked against you in finding suitable employment in the UK?

Heaven knows, the unimaginable waste of geological talent out in the North Sea that could be put to productive stacking is absolutely appalling!

Feb

18

"Russians Wade Into the Snow to Seek Treasure From the Sky"

"Villagers here have plastic bags, matchboxes and jars filled with dozens of stones. One even tore a hole in the coat one woman was wearing outside Friday morning.

But this is Russia, so the excitement became tinged with anxiety on Monday as unknown cars appeared, cruising the streets and bearing men who refused to answer questions but offered stacks of rubles worth hundreds, then thousands, of dollars for the fragments. Strangely, no authorities were anywhere in sight. "

Feb

15

Today was a rather interesting day for astronomers… with a bit of Russian deja vu and dinosaur demise added in for good measure. Here is my round up of multiple links for you all. Click on the numbers for the links.

1.

The Near Miss "Asteroid 2012 DA14 is about 150 feet (45 meters) in diameter. It is expected to fly about 17,200 miles (27,000 kilometers) above Earth's surface at the time of closest approach, which is about 11:25 a.m. PST (2:25 p.m. EST) on Feb. 15. This distance is well away from Earth and the swarm of low Earth-orbiting satellites, including the International Space Station, but it is inside the belt of satellites in geostationary orbit (about 22,200 miles, or 35,800 kilometers, above Earth's surface.) The flyby of 2012 DA14 is the closest-ever predicted approach to Earth for an object this large."

2.

"A meteorite shot across the sky in central Russia early on Friday and sent fireballs crashing to Earth, smashing windows, setting off car alarms and injuring 150 people.

Residents heard what sounded like an explosion, saw a bright light and then felt a shockwave as they went to work in Chelyabinsk, according to a Reuters correspondent in the industrial city 1,500 km (950 miles) east of Moscow."

3.

"Some of the numerous videos that quickly emerged of the incident highlighted a distinctly Russian phenomenon: the dashboard cam. As Business Insider recently pointed out, they are commonplace in Russia partly because of the dangerous driving conditions that lead to so many accidents, and with an unreliable police force such cameras can provide valuable evidence following a crash."

4.

Tunguska 1908

"The year is 1908, and it's just after seven in the morning. A man is sitting on the front porch of a trading post at Vanavara in Siberia. Little does he know, in a few moments, he will be hurled from his chair and the heat will be so intense he will feel as though his shirt is on fire.


That's how the Tunguska event felt 40 miles from ground zero."

More on Tunguska


5.

Past extinction event

A) "UC Berkeley researchers have discovered new evidence linking an asteroid impact to the extinction of the dinosaurs.

UC Berkeley Professor Paul Renne and a team of researchers, using isotope analysis, have found that both an asteroid impact and the extinction of the dinosaurs took place nearly synchronously 66 million years ago."

B) Abstract for Renne's work

"Mass extinctions manifest in Earth's geologic record were turning points in biotic evolution. We present 40Ar/39Ar data that establish synchrony between the Cretaceous-Paleogene boundary and associated mass extinctions with the Chicxulub bolid

Feb

11

 Street Smarts is a new book out by the South Alabama bowtie man. There is an interesting video discussion here on being humbled by the market.

1. "Jim Rogers on When He Lost Everything"

2. A bit about his new book follows: Street Smarts by Jim Rogers

and an excerpt:

'Today, I wish I knew how to instill this characteristic in my children. I wish I could call my father or mother and say, "What pill did you give us?" Call it discipline, call it diligence, call it work ethic—­we all have it, my brothers and I. I do not know where it comes from. I wish I could find the gene. I am certainly not alone in recognizing the value of persistence—we all know smart people who are not successful; we all know talented people who are not successful. Persistence is what makes the difference.'

Feb

5

 Have any of you been following this bone of contention for the anthropologists.

'In a lengthy and angry rebuttal on Saturday, Diamond confirmed his finding that "tribal warfare tends to be chronic, because there are not strong central governments that can enforce peace". He accused Survival of falling into the thinking that views tribal people either as "primitive brutish barbarians" or as "noble savages, peaceful paragons of virtue living in harmony with their environment, and admirable compared to us, who are the real brutes".

He added: "An occupational hazard facing authors like me, who try to steer a middle course between these two extremes, is the likelihood of being criticised from either direction."'

(Link from Marginalrevolution.com)

Stefan Jovanovich replies:

Only Professor Diamond could see himself as "steering a middle course". When a snarky questioner at one of his UCLA appearances suggested that tribal warfare was chronic precisely because no individual member of the tribe had any property that was truly private, his first reaction was bewilderment. His second was less than polite academic rage when the questioner noted that Jean Jaures' sad comment that the poor had been so patriotic at the beginning of World War I because "their country was the only thing they owned". Central governments only exist because of war; that unfortunate fact is why the founders of this country were so adamant about having ours be strongly limited in scope and scale.

Feb

5

 I read an interesting article recently about Darwin and his pigeons:

Pigeon breeding, Darwin argued, was an analogy for what happened in the wild. Nature played the part of the fancier, selecting which individuals would be able to reproduce. Natural selection might work more slowly than human breeders, but it had far more time to produce the diversity of life around us.

Here is a whole website devoted to Darwin's pigeons.

Mockingbirds interested Darwin too and look to have caught his attention before finches.

They were particularly popular in my Alabama Great-grandmother's generation for other reasons.

Feb

4

 There's a new book out (free for review by academics/professors) by a Marine Corps Captain that may be of interest (combining aspects of Thorp and Buffett). The book is called Quantitative Value: A Practitioner's Guide to Automating Intelligent Investment and Eliminating Behavioral Errors.

The author, Dr. Wesley Gray, Ph.D. (Univ. of Chicago), also has been discussing topics related to those recently mentioned on the Dailyspec.

1) We propose a model that is designed to identify bull-market and bear-market regimes. We examine correlation between stocks and bonds as a signal. Our hypothesis is that negative correlation between long bonds and stocks represents a bear-market regime, and a positive, or non-existent correlation, reflects a bull market regime.

2) We study whether the presence of short-term investors is related to a speculative component in stock prices using a new measure of holding duration. First, we characterize institutional investors' holding durations since 1985 and find that holding durations have been stable and, if anything, slightly lengthened over time. Second, we document that the presence of short-term investors is strongly related to temporary price distortions, consistent with a speculative stock component in stock prices as modeled in Bolton, Scheinkman, and Xiong (2006). As short-term investors move into (out of) stocks, their prices tend to go up (down) relative to fundamentals. As the presence of short-term investors is strongly mean-reverting, this creates a predictable pattern in stock returns. We document such predictability using both valuation proxies and asset pricing tests.

3)  This is Gray's take on the similarities between investing/portfolio management and kite surfing!:

A laundry list of similarities for your review:

* Learning how to kite surf, first requires that you learn how to fly a kite (duh).

* Investment realm: you need to know accounting, basic finance, and how to use a calculator before investing.

* After learning how to fly the kite, you need to drown a few times.

* Investment realm: start investing with small amounts and take your lumps early. I'd rather invest with someone who's suffered a 50% drawdown than someone who has always made money.

* Never go full throttle on your kite–and NEVER panic when you crash and burn–or otherwise you'll really be fu$í.

* Investment realm: stay away from leverage and "hanging at the margin's edge"; when the market is blowing up, don't panic…just release the throttle, swallow your pride, and drift to a soft landing.

* Flying downwind is easy, fun, and builds confidence, but you also need to learn how to fly upwind, which is hard and frustrating, but it may save your life.

* Investment realm: Going with the flow of a bull market is easy and not really skill, but may give an investor the mirage of skill. The real skill comes in learning how.

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