Weapons of Math destruction by Cathy O’Neil

Weapons of Math Destruction

Key take aways

  • Human values like justice and mercy is hard if not impossible to encode as rules
  • Data scientist use proxies as an approximate gauge for the existence of values. These are inherently inaccurate if not downright wrong
  • While using of race as a feature to determine if loan should be approve is obviously racist, the use zip codes though not obvious is equally racist since race tends to segregate around geographical territories
  • Models are increasingly used to across various domains to help increase the speed of decision making. This increases the negative impact of badly designed models will have on humans
  • A feedback is necessary to ensure continuous correction of badly design models – transparency of how your credit score is calculated
  • Regulations are necessary on the use of models as companies driven by quarterly reporting requirements of shareholders are primarily be focused on the bottom line

 

Diogenes the Cynic: The war against the world

Diogenes the cynic: the war against the world

The building blocks of Diogenes’ philosophy

  1. Self sufficiency: only need yourself and dispense with societal support
  2. Shamelessness: be willing to break even the most sacrosanct rules to express absolute freedom
  3. Indifference: be unconcerned with things not within your control
  4. Insensibility: to become insensible to both pain and pleasure
  5. Ignorance: To limit intellectual activities to those that are of immediate value for human life
  6. Disciplined training:
    • commit to a program of self training that strengthens his character,
    • lessens dependencies on social and physical needs,
    • maintain his desires and impulses under strict rational control
  7. Strength of character:
    • aspire to develop in himself a character and physical constitution like those associated with Hercules
    • that renders him impervious to vicissitudes and sufferings of human life
  8. Poverty:
    • understand that virtue and happiness cannot be found in the search and acquisition of physical possessions
    • divest himself of as many things as possible,
    • retaining the bare necessities to keep him alive and that assure him the freedom that Hercules esteemed as the most precious thing in the world
  9. Philanthrophy
    • Recognize his moral obligation to make himself useful in the task of dispelling illusions that rob people of their ability to be happy and live in accordance with nature
  10. Contempt for the opinions of many
    • renounce the need to be honored or appreciated by others
    • welcome repudiation and insults
    • look with contempt or suspicion at the values and customs by which people guide themselves

Realizations from nights spent isolated in the wilderness

There are only so many nights you can spend alone in isolation out in the wilderness before your brain fully discards all the faulty wirings imprinted by Hollywood’s horror movies.

What’s left is this primal realization that human is a very vicious predator perched pretty high up on the food chain. Further arm him with tools and he ends up right at the top of the food chain.

It is easy to forget about this fact when you have spent much of your life living in the city amongst other men following man made rules while attempting to play “civilized”.

Between groups of men there always exist collaboration and competition for resources extracted from nature. There also exist this constant jostling of position, usually labelled “politicking”, to gain more of these resources while exerting the same amount of effort. The bulk of the “stress” of “modern life” stems from “acquiring” what you need through the collective efforts of the group.

Between men and nature, the relationship appears simpler. The rules are pretty much fixed at the on set by nature. Man’s primary task is to figure out if the season is conducive for the activity being undertaken. Nature’s feedback is usually pretty immediate.

Related readings:

  • The Naked Ape, Desmond Morris
  • The nature of technology, Brian Arthur
  • Why the west rules for now, Ian Morris
  • Sapiens, Yuval Noah Harari
  • I-Ching, the books of changes
  • Tao De Ching, Lao Tze

Key takeaways from the meaning of vanlife

The Van Life idea seems like an ember that will eventually grow to become like what manifested as the Hippies movement of the 60s, the Burning Man festival and before that the Scouts movement.
One recurring theme observed between Van Life and Burning Man is the notion of “Coming Home”, where man steps away from the artificial construct he spent generations building up to finally return to nature.
Humans in the aggregate do behave somewhat like a self adjusting thermostat forever oscillating between extremes.
https://www.youtube.com/watch?v=t8dN4jP3OZQ

Related readings:

  • Future Shock, Alvin Toffler
  • Different, Youngme Moon
  • I Ching, the book of changes
  • Sapiens, Yuval Noah Harari

Future concerns

One of the primary fear of the future an average man has stems from the “abstract idea” of how physical discomfort would feel like during old age just prior to the point of death and how terrible it might be.
 
This primary fear is the main driver behind the average man’s continued effort to accumulate resources of various forms. It is done with hopes to alleviate that “discomfort” when it does eventually come.
 
The problem with that mode of thinking is the future is unknowable and man ends up wasting his precious limited life span over provisioning, not to mention it’s overall negative impact on the environment.
 
An alternate approach as practiced in various ascetic traditions is to steadily build the ability to keep equanimity at various thresholds of discomfort through daily practice. This curtails over-provisioning , frees up precious time to do more meaningful stuff and is generally good for the environment.
 
Related references:
– Diogenes
– Seneca
– Meditations, Marcus Aurelius
– Vipassana mediation
– TaoDeChing, Lao Tze
– The Tiger’s Cave, Trevor Leggett
– Zen mind, Beginner’s mind, Shinryu Suzuki
– The book of five rings, Musashi

Different by Youngme Moon

Key takeaways

  • Removing an authoritative metric to measure performance invites fresh reinterpretation and creative differentiation
  • Having an authoritative metric in place is the surest way to invite competition and conformity
  • “For the most part, we do not see before we define, we define before we see”  Public Opinion, Walter Lippman
  • In business product categories are very flexible. All it takes is a perceptual shift to transform the consumption behavior of the masses
  • “Intuition becomes increasingly valuable in new information society precisely because there is so much data”, John Naisbitt

The dichotomy between privacy and health

1984: Big Brother is Watching
Across multiple literature, its been stated privacy versus health will be one of the primary dichotomy societies around the world will need to juggle with as technological advances are made in the fields of artificial intelligence, communications (surveillance) and medical science (genetic research).
 
What is surprising was the rate at which the Corona pandemic catalyzed this change. In light of this, it is fascinating to observe how different societies position along the spectrum. Some societies has opted for surveillance to the maximum extend possible with current technology while others opted for its polar opposite going to the extend of staging mass protests against it use. 
 

Related readings:

  • The AI Economy, Roger Bootler
  • To Be a Machine, Mark O’Connell
  • Irrational Exuberance, Shiller, Robert J.
  • Life 3.0: Being Human in the Age of Artificial Intelligence, Max Tegmark
  • Mind Children The Future of Robot, Hans Moravec
  • The Singularity Is Near, Ray Kurzweil
  • 1984, George Orwell

Thoughts on the nature of framing

Optical illusion of the old lady and young lady

The basis we use for interpreting what is happening our world is through the understanding of our history. History heavily relies on narrative constructs.

The critical flaw with using narration as a tool to understand, encode and communicate what has transpired is it can only support data in a chronological order while reality is inherently chaotic, multi-linear, on occasions non-linear and confounds understanding thus narration. To tell a coherent tale of what has transpired, authors are forced to decide what to include and leave out of the narrative they weave. This phenomena is commonly labelled as the narrative fallacy.

Compound narrative fallacy with a collection of common human cognitive bias such as the framing bias, survivor bias, confirmation bias and consistency bias and you get a recipe for a fragmented society. This is especially more so when you have multiple equally plausible narratives that are diametrically opposed but draw evidences from the same chaotic sample space to reinforce their positions.

The task of deciphering what has transpired becomes even more daunting to the everyday individual with the reintermediation of social platforms as our primary news source. In the days prior, individuals need only rely on one official news source on how to understanding what is happening, usually from their government. Now, individuals are bombard on a daily basis with news sources sponsored by multiple parties with varying interest and agendas. In this day and age, it has become crucial for individuals to exercise critical thinking.

Some final food for thoughts:

  • Iran is portrayed as an evil country in American media
  • America is portrayed as the devils incarnate in Iranian media
  • China is portrayed as an evil country in American media
  • America is portrayed as an evil country in Chinese media
  • Why is it that the winners are always as good and righteous in any battle?
  • “If God’s on our side, who the hell could be on theirs?” Private Reiben in Saving Private Ryan.

Thought provoking artifacts

Conflicting frames about Bills Gates

Bill Gates the evil person
Bill and Melinda Gates the philanthropists

Conflicting frames about the 2020 CoronaVirus

Conflicting frames about global warming

Related references:

Continue reading “Thoughts on the nature of framing”

Predator’s Ball by Connie Bruck

  • no matter how much research you done regarding a stock you don’t have a contract what the future price should be
  • with high yield bond there is a contract for a certain price in a future, if you are correct about the calculation, you will be correct about your yield
  • bargain price: liquidation price 75cents on the dollar buy at 20 cents
  • when you are not a big established investment firm like Lehmen brothers, you have no franchise to protect. You are free to go the unconventional route for potential outsized returns
  • great ideas are born bad. Its easy to make your way to a great idea from crazy outrageous ones than cautious and sensible ones. Investment bankers by default filter out the crazy outrageous ones.
  • Contrarian thinkers need to train themselves to see things via unconventional routes
  • ways to structure a bond
    • give money back sooner
    • give higher interest rates
    • give more stock
    • give stocks cheap
  • It is easier for corporation to pay interest which is tax deductible than dividends which are not
  • Bonds offer process
    • first tier  high rollers offer liquidity get to buy at cheaper price and exit earlier
    • second tier payers, with franchise to protect, who want to avoid stigma of being junk bond buyers will come in later at more expensive price and exit later.
  • Successful leverage buyout scenario: after buy out use cashflow from business to pay off the junk bonds thus deleverage the business
  • Mutual fund arbitrage: compare value of underlying portfolio and stock price
  • If you are right about a company being undervalued and it is willing to put itself up for sale, there will be buyers
  • Poison pill: defense mechanism against corporate take overs. When would be acquirers crosses threshold of ownership, existing shareholders are given extravagant rights rights making it less desirable as take over target
  • Michael Milken:
    • perception versus reality, see what the world could not.
    • Vision is Strength.
    • capital is abundant, vision is scarce.
    • excess capital is not strength but opportunity for weakness
    • capital put in the hands of someone with vision will result in drastically different results.
    • return of the owner manager as opposed to the corporate manager
    • by-pass the China wall principle where companies try to isolate the deal making and arbitrage departments
    • knows many industry in depth

Related references

King Icahn, biography of a renegade capitalist by Mark Stevens

  • way of thinking
    • There is a strategy behind everything. Everything fits. Thinking this way taught me to compete in many things, not only take over but chess and arbitrage
    • Empiricism says knowledge is based on observation and experience, not feelings
    • Studying 20th century philosophy trains your mind for takeovers
    • Chain thinking: just like chess, in any transaction, think of every single possible move and counter move
    • always consider what might be the worst case scenario and then protect your downside while increasing your control
    • a civilization starts to decline when a large part of its population stops working
  • Icahn/Kingsley theory: focus the market’s attention on the disparity in values and someone will buy you out
    • Take over strategy potential outcome after indicating it as a take over target
      • acquisition of shares by original suitor
      • hostile challenger
      • white knight  who will come and free up the locked up value
    • Prefer stocks with limited downside exposure, gravitate towards out of favor stocks that had already been discounted by the market
    • When analyzing a company, earnings does not always present a clear picture. Depreciation is paper losses. Cashflow presents a better picture. Key components to analyze
      • asset
      • return on equity
      • cashflow
      • capitalization
    • committed the mistake of just focusing on financial engineering to reduce cost, think about how to grow the business
    • Did not realize after fully taking over a company that the revenue side of the business is usually circumscribed to external factors not under direct management control
  • On negotiations
    • everything has to be negotiated
    • threaten, continuously threaten by painting a very dire picture. This helps frame the alternative which you demand as something very very reasonable
    • wear down your opponent
    • answer a question with a question
    • always push the deal as far as it can without blowing up
    • wait until a company is so stretched in need of a deal before buying on the most favorable terms
  • On goal setting
    • have no fixed goals
    • see all the possibilities
  • Princeton liberal arts eduction:
    • exposure to eclectic mix of human knowledge teaching a student how to think, explore and question rather than prepare them for a specific career
    • the best thinkers will rise to the top of their chosen careers precisely because they have not limited themselves to narrow courses of study

Related references