May 2, 2021 | Leave a Comment

Zubin Al Genubi  writes:

The subject of Losing gets pushed under the rug in this woke world, but is an interesting subject and should be studied and examined.

Accepting loss, and understanding why is an important process.  Was the loss due to a mistake, lack of training, improper technique. Was the other guy just a better human or did he just work harder and longer, and try harder,?    Did you try your hardest? Was there some other mental stuff holding you back.  There are some tough questions, but questions that need to be examined to improve.

Sports competition is good for young people because it teaches how to lose.  A big part of sportsmanship is losing with grace.  

Some people really hate to lose, and it  holds them back.  I hear people verbally arguing, and rather than lose, they will start escalating and go for the jugular, and making personal attacks.  It's counter productive in life, in marriage, in business.  Fear of losing causes people to not try their hardest for fear that it will not be good enough and that they are inferior.  Fear of losing causes people not to take risks to avoid the pain of loss and the accompanying questions. Fear of losing is fear of realizing that you may not be good enough, and that your self delusion about yourself will be shattered.

Millennials grew up in the "everyone is a winner" generation, leading them to a sense of unjustified self entitlement and bewilderment at their lack of success.

A statistical    approach to losing is an excellent way to understand losing.  In a sample of  trials, some will be losers, some winners.  It has to happen. Hopefully you will have more winners over time, and the wins will be larger than the losses.  The distributions of a few big wins, which total more than many small losses are hardest. A common distribution is lots of small wins, and a few big losses which is related to the fear of losing issue.

Was the loss due to bad judging, prejudiced judges, corruption, bad system, unavoidable (shit happens)  type stuff.  In ski mountaineering, you can be cautious, but there is unavoidable objective hazard, such as an earthquake while you are in the mountains.  

There are some good tangents. Mitigation of risk is big.  The subject of luck is a good one.  There are many things you can't control: some are favorable, some not, and they affect you and your life.  Was your so called success due to luck or skill?. Its the black swan thesis. What percent is luck, and what part skill?  Did you overcome your circumstances, and handcaps, or did you squander your talents?

Though I don't about it gambling is a good field to study losing as discussed by Kelly, our friend, Ralph Vince..

James Lackey writes

What evidence do we have to support the statement about Millennials?

We know my kids yours brooks vics Stephan Gordon and I'm sorry how many others here..

Oh sure I knew your not talking about me us but….I've been mentoring just out of college kids or drop outs and I've never experienced the generalized view.

However my son does have cohort frustration.That's not a win loss handle it emotionally issue it's a work goal reality issue

Sorry if I hijacked your thread

Ken Sadofsky writes:

Is the list dissolving; the decency of adieSau. would have been appreciated.

Cheers for alice. 1939 5 top films n more. what would vic say?

James Lackey writes

Did you take my comments as not fit for British Navy dinner table?

I'm certain it is US Army Officers club cool. 

Please explain why. 



Food Item

December 14, 2020 | Leave a Comment

Bill Rafter writes: 

I was recently introduced to RICE GRITS, which are broken rice kernels.  Due to the increased cooking surface, these gems turn smooth and creamy quite easily.  I have had my starter pack three Days and have used them three times; once for breakfast, once as an understory for a sautéed scallop dish and once for rice pudding.  Absolutely delicious.  Their micronutrition content is very close to Irish oatmeal, and they are a nice morning change.

I received my grits from a multi-generation family farm in Mississippi.  Their website has lots of recipes.

Most recipes for rice grits call for frequent stirring of the pot.  Fine if you have the time, but I’m too busy.  My variation is using a crockpot.  Although that means no stirring, you are left with some burn spots at the bottom of the crock.  They come off with soaking in dish detergent letting chemistry do the work for you.

My crockpot version goes like this:  Put a pat of butter in the bottom of the crock, and then add 4-to-1 units of water (preferably spring) to grits.  Set the crockpot on low and return in 4 hours.  Add cream if you want the ultimate luxury.  Note that with a timer you can run the process overnight and have them for breakfast.

Ken Sadofsky  writes:

From the women: oatmeal, eggs n a fruit or sugar. For world athletes, I get carbs n protein from eggs but oatmeal has lil protein. The Scottish have a sayin though about their men, oats n steeds (escapes me)

A Japanese Zojirushi rice cooker has fuzzy logic and requires no stirring for whole grain oats, groat oats, I believe.  Perhaps counter-intuitive,  or obvious, is that this part of the Orient would find the easiest way of soing what they're suppose to be expert at.



Big Al writes: 

Behavioral Problems of Adhering to a Decision Policy Paul Slovic Oregon Research Institute, Eugene, Oregon  Paper presented at the Institute for Quantitative Research in Finance May 1, 1973, Napa, California

Another example of inconsistency comes from a study of expert horse-race handicappers, which we are currently conducting at the Oregon Research Institute. We're not really interested in horse-race predictions, we're studying the stresses caused by information overload, and horse racing provides an appropriate context in which to  do this. We expect that the results will generalize to any domain in which the skilled integration of large masses of quantitative information is performed by means of human judgment. For horse-race

handicapping is an information game, much as investment analysis is an information game, and although there are many differences between these two domains of risk-taking, there are many similarities as well.  Figure 1 shows a typical past-performance chart, which gives detailed  information about each horse’s recent performances. It doesn't take too much imagination to see the similarities between these kinds of charts and the data sources used in some forms of financial analysis. Our judges in this study were eight individuals, carefully selected for heir expertise as handicappers. Each judge was presented with a list of 88 variables culled from the pastperformance charts. He was asked to indicate which five variables out of the 88 he would wish to use when handicapping a race, if all he could have was five variables.

He was then asked to indicate which 10, which 20, and which 40 he would use if 10, 20, or 40 were available to him.  Before examining inconsistency, though, let's look at how accuracy and  confidence varied with amount of information as shown in Figure 4 of  the handout. We see that accuracy was as good with five variables as  it was with 10, 20, or 40. The flat curve is an average over eight subjects and is somewhat misleading. Three of the eight actually showed a decrease in accuracy with more information, two improved, and  three stayed about the same. All of the handicappers became more confident in their judgments as information increased.

In Table 1, we see a comparison of the amount of inconsistency in our handicappers’ judgments at low and high levels of information.

Consistency was measured in three ways—by the number of times the first-place horse was changed when the race was judged the second  time, by the number of changes in any of the five ranks, and by the  sum of the differences in ranks from one time to the next. Each of  these measures told the same story—there was considerable inconsistency in the rankings, and this inconsistency increased as the amount of available information increased.

These results should give some pause to those of us who believe we're better off by getting as many items of information as possible, prior to making a decision.

Ken Sadofsky  writes: 

US voters largely hold as good mechanics, if it ain't broke don't fix it. For Boris if still here opening lines of AC tell a lot about the topical, unintentionally; something for Lindsey and Schumer and maybe to close it, he ain't no boss. And like science, music takes political sides it seems; I disdain - wish someone would just show me the lists what I'm suppose to believe and what to say. I do get reverence to one's fellow carbon forms btw.

most for skimming:

Big Al got me moving on this, I still have much more, but it's locked in my brain vaguely and still can't get to the speaking or typing part.  As usual, others can translate below or even my vague thoughts, still in labor. And few have already.

If this gentleman, Allan Lichtman has already been shot down, scuse.

More important is the set or transit ors (a cleverism to make binarys as a set against impeders) seismic shifts shake the status quo at the top, making the presentation and focus of false ones more understandable for me about the process. Five or fewer keys false, incumbent wins; (6, in this case 7 keys false) incumbent loses.  –so far, unless SCOTUS wants political upheaval, and they're made to hate politics while endorsing their view on lawful governance.


 begin @1:30

2)"wik:The 13 Keys

"The Keys to the White House is a checklist of thirteen true/false statements that pertain to the circumstances surrounding a US presidential election:

    Midterm gains: After the midterm elections, the incumbent party holds more seats in the U.S. House of Representatives than after the previous midterm elections.

    No primary contest: There is no serious contest for the incumbent party nomination.

    Incumbent seeking re-election: The incumbent party candidate is the sitting president.

    No third party: There is no significant third party or independent campaign.

    Strong short-term economy: The economy is not in recession during the election campaign.

    Strong long-term economy: Real per capita economic growth during the term equals or exceeds mean growth during the previous two terms.

    Major policy change: The incumbent administration effects major changes in national policy.

    No social unrest: There is no sustained social unrest during the term.

    No scandal: The incumbent administration is untainted by major scandal.

    No foreign/military failure: The incumbent administration suffers no major failure in foreign or military affairs.

    Major foreign/military success: The incumbent administration achieves a major success in foreign or military affairs.

    Charismatic incumbent: The incumbent party candidate is charismatic or a national hero.

    Uncharismatic challenger: The challenging party candidate is not charismatic or a national hero.

When five or fewer of the above statements about an upcoming election are false, the incumbent party candidate is predicted to win the election. When six or more are false, the incumbent party candidate is predicted to lose the election.

By "incumbent party", Lichtman means the party to which the incumbent President belongs. In the 2016 election, the Democratic Party was the incumbent party as then-President Barack Obama was a Democrat. Obama was in his second term and thus was ineligble for re-election, so Hillary Clinton ran as the candidate for the Democratic Party, i.e. she was the incumbent party candidate. Donald Trump was the candidate for the Republican Party, i.e. he was the challenging party candidate.

Some of these keys can be judged using objective metrics, such as economic growth, and some of these keys are of rather subjective nature, such as candidate charisma. In the latter case, a forecaster must evaluate the circumstances of all past elections together so that his judgments are at least consistent if not objective, and then observe how his judgments retroactively predict historical election outcomes so that he can refine his subjective standards into something reliably predictive for future elections.[1]"

3)other - one scientific answer may be better suited to another science:

"While predictions of earthquakes eluded his methods and algorithms, they seem to have succeeded in another, completely unrelated field. In 1981 the Russian Keilis-Borok teamed up with an American 26 years his junior. His partner was Allan Lichtman, a political historian at the American University in Washington, D.C. Together they applied the algorithms which would ultimately fail in predicting earthquakes to the US election system. In November 1981 the duo published its results in an article with the very long, unwieldy title "Pattern recognition applied to presidential elections in the United States, 1860-1980: Role of integral social, economic, and political traits" in the Proceedings of the National Academy of Sciences in Washington (Vol. 78, pg. 7230).

And what happened? Using this method, Allan Lichtman has correctly predicted the outcomes of the past eight presidential elections in the United States. And now - in contrast to all other pollsters and talking heads - he was the only one to consistently tell all of us who wanted to listen, that the 45th president of the United States was going to be Donald J. Trump. With his statements Allan Lichtman was the lone voice in the desert and has posthumously vindicated the work of Keilis-Borok, who passed away three years ago in his home in Culver City in the Los Angeles Area."



"Low Volatility and Investor Complacency - the NY Fed Offers An Interesting Analysis":

As discussed in Robert Shiller's Nobel Prize lecture, the original puzzle in financial economics was why stock prices are so volatile relative to dividends. According to the Gordon growth formula, stock prices and dividends should have the same volatility. In the data, however, stock prices are significantly more volatile than dividends. Since the 1950s, stock prices have exhibited 16 percent annualized volatility. That is almost 10 percentage points higher than the "fundamental" volatility of dividends, which has been closer to 7 percent (for example, see Shiller's annual data).

Shiller interpreted these results as evidence that stock prices were inefficient, with investors potentially succumbing to animal spirits, or "waves of optimism and pessimism," to explain the large variation in stock prices (see John Cochrane's discussion of this view in a Grumpy Economist blog post) . Importantly, however, Shiller's analysis assumed a constant discount rate for computing net present values. Subsequent work provided evidence against this assumption. Time-varying discount rates are now a standard feature of asset pricing models that can explain the excess volatility of stock prices relative to dividends (see Discount Rates by Cochrane or Monika Piazzesi's summary of related asset pricing research).

As shown in the previous chart, today's realized volatility is about 6-7 percent. This level is what one would have originally predicted using the Gordon growth formula, suggesting that the low volatility puzzle is perhaps less puzzling than originally thought. Alternatively, if one subscribes to the more recent asset pricing theories, it appears that current volatility is either abnormally low or that discount rate variation has somehow been dampened, leading us back to concerns about investor complacency.

Larry Williams writes: 

The disparity is because investors are more influenced by price than dividends. Dividends are not a driver of emotions, prices are. The waves of optimism or animal spirits are in response to price changes which may feed upon itself.

Theo Dosis writes: 

Also worth mentioning that Schiller's data is garbage.

Ken Sadofsky writes: 

How so?

You needn't encumber your own studies, but perhaps a reference to anything, somethings - studies, that falsify.

I understand mu((c) or (s))h is too vague and convoluted to falsify; but then why false a void?

I ask, because you speak with authority.


a wannabe learner. 



Most sports games are fought to win early and decisively, given a choice. This painfully obvious comment alludes to the fact that the middle game and end game can thereby be played with less risk for the winning side. However, this must be measured against the opening winners desire to play all out throughout, just with less overextension, not merely maintaining the advantage. Don't let up on your capacity or talent. Some games and teams will require a full force stance, depending on the point lead and in order to play well. What I suggest is not to rest on a gain. I only suggest to reconfigure the risk/reward ratio. Otherwise, playing a completely defensive strategy will destroy the advantage. Further, risk/reward can allow a highly aggressive stance and be defensive by inducing your opponent to expend more than usual amounts of energy and exasperation trying to defend offputting attacks. Inducing is aggressive. These attacks will accompany random, not constant defensive moves on the aggressor's part, allowing just enough of a hedge and freeing up energy from an overly or hardened defensive posture to a game of overall nimbleness, less probabilistic and freeing up energy to explode at will. Thus, the risk/reward ratio is not all about chasing points, but allows for a game whereby opposing points can be thwarted. This alleviates the need and obvious static (stasis?) energy of a defense only strategy, thereby giving the opponent one's game plan.

Entice your opponent to play your game: To play drunken martial arts, which requires enticing your opponent to engage on your terms, running out the clock, angering your opponent, retreating or advancing to entice your opponent to your strengths, or limiting your opponent's moves, , while maintaining full force and adaptability in maintaining a defensive posture also come to mind. (Ali trained to take many a pounding to train for an otherwise superior Foreman in '74 or whatever). One's tactics are freed from having to score. Let the opponent, out of sorts and off their game score for you, in which you make easier points, thus conserving one's energy. The corollary, making one's opponent pay big to even get a point or taking a hit is very offensive. But these are only for the very proficient. These tactics under an overall strategy require or expect the deemed defense having to move, not always true in stocks. (Though Buffet said one can swing when one wants; 4 balls will not get you to first in the stockmarket). An exceptional opponent will not take the bait, but circumstances can force their hand. These thoughts touch on defense as offense. We all know the opposite axiom. As one aside, I'd like to see the drunken martial opponent, and this takes on many variations, in boxing, fencing, racing and war, in which the opponent is enticed to overexthend themselves to the winner's advantage, not move in such a fashion into the opponent's traps. Others may have specific games in mind. I am having the problem of analogizing a specific game; a discrete event compared to the market moves over a term. However, the market moves comprise many a game.

Some of what I consider the more continuous sports are soccer, lacrosse, basketball, hockey, fencing, boxing and tennis, in which one can morph from an aggressive stance, to a defensive one on the fly. Of course, this applies to all sports on a limited degree, like baseball and football where a meeting is called prior to a play. I like the former because the action is more often in play than other games, and therefore the strategy and tactics can be applied with more facilty in real time, of course given prior strategizing. Maybe it's like a free form jazz requiring excellent individual talent that understands the other players, compared to an orchestra with a conductor playing 30 second songs cumulatively. Both comprise professionals. We know the market does both as well.

This writing has suggested employing defensive offense, for example keeping the accent on making high percentage shots that tire your opponent mentally and physically. Do not take undue risks in shooting (offense)and upgrade one's focus on preventing the rival from scoring (defense), rather than setting up your next shot. An advantage within or from a game is anticipating further moves or a later game. This allows for other strategies/tactics to surprise, accumulate to disorient, and induce the opponent to weaken lines in order to defend against all possible attacks. Continuing the earlier discrete game, the early winner can devote more resources to defending the perceived advantage with the above considerations in mind. In fact, the simplistic notion of games is not to take undue risks (this assumes a lifetime of understanding) once victory is achieved, while of course playing all out under revised risk/reward calculations. To confuse things, a good winner will continue to play all out, as that is their best game for cadence and alertness. As a warning, many have lost sitting on a win, confusing defense with merely running out the clock. Resting can beckon atrophy, thereby inviting ineptness.

Another is offensive defense. A penny saved is a penny earned. I would submit that a penny saved costs less than a penny earned oftentimes. Drive to the utmost, but how many feet or seconds does another pit stop cost? Can it be skipped with good preparation and execution being the same car, or is it better to plan for a stop in order to have your best car on the track? A lot of movement in life, like mechanics, etc., has exponential costs, like a rocket liftoff compared to cruising, and the same for other bursts requiring torque, like moving onto the beltway. Make your opponent use torque that require more energy and force pit stops that cost time.

Unlike the stock market, in discrete games, a 2 point win is equivalent to a 50 point win. Can we say that if the 2 point wins accumulate, they will become 50 points and be, just a little little bit easier, to come by?

Defensive offense and offensive defense: do they exits, does it matter, is it semantics? It was just a way to make a point and hint that things occur simultaneously.

In sum, winning big early, frees up an added dimension of facileness, controlling time and moves of your opponent, while increasing one's own efforts to thrive and grow toward an increasing advantage. Maybe all games should be played this way throughout, but an early advantage seems to change the risk/reward analysis. The predators are able to employ this. A good follow up would be to depict what the purported prey would do to become the eventual winner. —Maybe the same? but they seem to have less reward in creating a win from behind by just maintaining the stasis. Advisors often suggest that increased risk is not the answer, until Hail Mary time - at least in a discrete game.

Allan Millhone looks at it from the Checkers perspective:

I am packing and getting ready to head to Grove City, Pa. for a yearly tournament there. There will be plenty of stiff competition with our Three-Move Restriction World's Champion and other top Masters. In tournaments my eyes scan the board akin to surfing and try to find a safe line of play. Like a good wave to ride safely to the King row (water's edge at the beach) . The surface of the Checker board at times can be very smooth as you coast towards an easy draw . Other times the ride is bumpy and can be quite turbulent as your opponent( like the waves) can force you off into uncharted waters. The Market trader needs to be wary and look ahead at all times for ever changing Market conditions much like the waves for the Surfer endlessly shift back and forth. The Checker board starts out even for both sides with twelve pieces each, but soon after the calm subsides and the waters of the board begin to swell . The Surfer tries to Master the wave as the Market trader tries to tame the Market Mistress and gain the upper hand.

Tommy Wiswell said: "Look twice before you move."

Steve Ellison writes:

In many competitive endeavors, simply making fewer mistakes wins many games. Mistakes I have made in the markets include:

- Failing to be aware of changes in trading hours

- Using a limit order to try to save a few dollars when I really did want to enter the trade regardless

- Failing to be fully prepared (with orders placed in advance when feasible) for any events that might set up a favorable trading opportunity

- Entering a trade without knowing exactly what I would do if price moved up, down, or sideways

- Deviating from my trading plan

- Using too much leverage

Roy Longstreet wrote in 1967 in Viewpoints of a Commodity Trader:

Did you watch the Packers whip Kansas City in the Super Bowl? I did and was much impressed by the professional way in which they performed. They did not beat themselves by making mistakes.

A professional makes fewer mistakes than others. That is why he is a professional. He may not have more ability than another but he is superior because he has trained himself not to make mistakes.

I was particularly impressed in watching the Packers throughout the season as they seldom were penalized for infraction of the rules.

On Mr. Longstreet's last point, the Detroit Red Wings have similarly avoided penalties in the Stanley Cup finals. Conversely, the Pittsburgh Penguins, who have probably by now surpassed the aging Red Wings in talent, took a string of penalties in the fifth game after the Red Wings took an early lead. As a result, the Red Wings scored three power play goals and put the game out of reach.

Allen Gillespie adds:

Hawks v Supersonics game I went to years ago - 67-66 after three with only Peyton hustling - Steve Smith scores 33 in the 4th running around like a maniac.  Also, in soccer, most goals are scored very early or very late in a half.

Relationship between time and goal scoring in soccer games-Analysis of three World Cups
Soccer goals and non-guassian distributions

Nigel Davies comments:

Here's another view from a mistake specialist (both my own and other peoples'):

The mistakes we make tend to crystallise around different deeply rooted thinking patterns and attitudes but then change their form when people notice them and try to something about them.

An example might be that of a trader 'taking profits too early', vowing to do something about this and then taking them 'too late'. He could be 'correcting his mistake' but failing to address the real issue of making arbitrary decisions rather than operating according to a tested plan.

Normally you have to go very deep to ferret out the cause of error and then, assuming someone is willing to go there, it's unlikely they'll actually be able to do something about it. But success can come when the number of good moves outweigh the bad, so for those with an innate 49-51 split have hope…

George Parkanyi says:

Making mistakes is not one you can generalize like that. Mistakes are how we learn. If you are not making mistakes you are probably aren't stretching yourself enough. Mistakes also come in all shapes and sizes — some are disastrous, some are benign.

Recovering from, or leveraging mistakes — now there's something.



I would like to toss an idea regarding the post Sampling Without Replacement, from Victor Niederhoffer.

I'm thinking of signals and receptors. There seem to be no receptors for these alleged signals. One thought, assuming an agent, is signals are being polluted by governments or just an abnormal amount of uncertainty. Have the opposing Quants finally gained enough complexity and control to nullify what once were signals, leaving nothing in their place? Then this is a rational enterprise on their part, generating randomness (as Sam Marx posited). Assuming this purpose driven agentic randomness would presume something of a very large player, concerted or homogeneous group. Purposeful randomness should fail, unless the catcher knows where that "random number" is being thrown. But now I think otherwise in that a random system could help the vig. Also possible is non purposeful randomness arising from a high level of uncertainty.

The world markets recently seemed to be largely acting in one direction across asset classes, thereby ruining ideas of diversification. This was the means of those without means to hedge. This would mean that countervailing elements (values) gold, oil, stocks, dollars etc. do not support the traditional means of valuation in a growing world economy, as I derive from your posts. In other words, I’ve understood you to mean that value is derived from the value of other things (circular, yet valid). Opposing forces have been reduced for now. However, you say that bonds have offset some of the stock losses.

I would simply suggest that the lack of good valuations in bonds has created a temporary random environment. A virus? Arguing against myself, isn't this always the case for oil?

But to test:

1) macro test — deductive: When in the past were there no discernible predictive sequences? I’m respectfully submitting that there may have been periods when history stands alone and unrelated to history. How long did this last, what were the world markets like, was there a large market of something without a good valuation, or very fragile, possibly random, and when and how did sequences reemerge?

2) micro tests — inductive: Another idea is to search for intervening events that altered usual sequences, as in the weather.


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