The (Anti) Social Media?

Crazy people don’t know they are crazy. I know I am crazy therefore I am not crazy. Isn’t that crazy – Captain Jack Sparrow

Last week brought good news on the breakthrough on the Covid vaccine and the concern that a part of the western world may choose not to get vaccinated. Turns out that there is a segment of the population that believes that all kinds of vaccination is bad and have even chosen not to get their kids vaccinated, with bad outcomes. There is an audience for all kinds of conspiracy theories out there. The world is flat. Corporates are run by pedophiles. Climate change is a hoax. Moon landing never happened. Society always had people who were at the extremes but now every view gets expressed and finds an audience in this strange yet wonderful place called the social media.

Depending on your views and preferences, your media feeds will show you more and more links of what you have previously liked. Let’s say I am a Trump supporter and I like pages that glorify him. I will start seeing more and more pages that say good things about Trump. So when I come across people who don’t share the same views on Trump, I can’t believe how can they be so stupid. Turns out the other camp, because they believe otherwise, only see links that reinforces their belief of how bad Trump is, thanks to the same algorithms. That is how algorithms work and that is why they are so dangerous. The supporters of Trump feel he is god like. Those who don’t like him see the devil in him. Both these camps can’t believe that the other side is no naïve and end up thinking that they have an ulterior motive. The middle ground gets lost and people move towards extremes. Thank (blame?) the social media.

This trend is also getting accelerated due to multiple factors. Most of us find it very difficult to listen to an opposite view, hence avoid it. Social media allows one to find like minded people across the world to create large communities. Large communities lead to feedback loops and mob psychology if the belief is that you are in danger or under attack (think hyper nationalism, anti immigration). Social media leads to amplification of these fringe views leading to concern in the majority about the proliferation of the fringes. Sensationalism by Media also does not help – many times the headlines are totally different from the spirit of the article – radical headlines make for more clicks and viral stories.

Thankfully democracies have woken up to the manipulation of voters and the power that these platforms exert over their users. Social media allows each individual to view the world through their own lens. This leads to distortion as everyone is viewing the same thing differently and amplifies our own thoughts. The system of auto feeds reinforces our biases. If we let someone else make the choices for us, when the someone else is a programme, the end result can be dangerous. While I am totally for auto recommendations of which series or movies we should watch next (although recommendation of friends are better) auto feeds on social media is something that we need to be wary of. These programmes also get coloured by the biases of their creators. Some biases we are aware of, most biases we are not.

Thanks to the lock down we have moved to online consumption of daily news. One way to break this echo chamber could be to read whatever you find interesting across varies subjects instead of letting the news agency show you news according to your “preferences”. Other way could be to follow/interact with people who have a different view and being tolerant of those views. I am sure we will find a way to deal with this. Being aware of a problem is the first step in solving it.

Ask The Expert?

The trouble with the world is that the stupid are cocksure and the intelligent full of doubt – Bertrand Russell

The last month was full of noise around the US elections. The expectation was a clean Biden win. The final result seems much closer. This was not the only major event that has not gone as per expectations. Some more to consider –

Trump got elected

Brexit happened

Covid predictions and their flip flops

World oil demand was supposed to outstrip oil supply in 2000’s

War ravaged Japan and Germany were not supposed to come back from ruins so soon

World was also supposed to run out of food in 1960’s

The most widely held and tracked large stocks see wild swings on result days

You see the world of making predictions is full of pitfalls. Experts are supposed to know. We depend on their knowledge and feedback. Maths and Physics are comparatively straightforward – the equations produce the same results every time. However in most other fields the outcome is based on everything else being the same. The problem is that everything else is never the same. It may be similar but not the same and there is a big difference between the two. That why history rhymes and does not repeat.

Very often the outcomes are a range of probabilities. Probabilities are never 0 or 100 and the range between those numbers is wide enough to have a huge impact on the end result. Behavioral science is not an exact science. Behaviours change. Sentiments change. Breakthroughs happen to solve impossible looking problems.

The noise around events will only increase with each passing day so how can one be better prepared? Part of the solution is having an open mind and a flexible approach, helps in re-calibrating our views when required. Part is acknowledging that one will never fully know. Part is assigning realistic probabilities. With experience one starts planning for a range of outcomes so that even the worst case is not unexpected or ruinous.

In reality, no one knows, for sure. Keeps things interesting 😊

How Is Your Relationship With Money?

Things that have never happened before happen all the time – Scott Sagan

A book review this time – The Psychology Of Money by Morgan Housel. It is the only book I have read twice, just because I enjoyed it so much and there was so much wisdom in it. Must read for everyone. Let’s look at three stories from the book (out of many) that really appealed to me and I hope will be of interest to you as well.

Story 1 -

Ronald James Read was an American philanthropist, investor, janitor and a gas station attendant. He fixed cars at a gas station for 25 years and swept floors at JC Penny for 17 years. He died in 2014, aged 92 with a net worth of more than $8 million leaving $2 mn for his stepkids and $6 mn for charity. A fortune made with meagre savings put into blue chip stocks and being patient.

Richard Fuscone was a Haward educated MBA at Merrill Lynch and was so successful that he retired at 40 to become a philanthropist and was on the “40 under 40” list. In the 2008 crisis high personal debt and illiquid assets made him bankrupt.

Ronald Read was patient, Richard Fuscone was in a hurry. That is all it took to eclipse the massive education and experience gap between the two. Only in investing outcomes can a janitor beat the most qualified people. Financial success is not an outcome of hard science but a soft skill, where how you behave is more important that what you know. Luck plays a large part in the final outcome as well.

When things are going well, realise it is not as good as you think. You are not invincible and if you acknowledge that luck brought you success then you also have to believe that lucks’s cousin risk is around the corner and can turn your story around as quickly.

Failure is a lousy teacher too as it seduces smart people into thinking their decisions were terrible when sometimes they just reflect the unforgiving realities of risk. The trick when dealing with failure is arranging your financial life in a way that a bad investment here and a missed goal there won’t wipe you out and you can keep playing the game until the odds fall in your favor.

The correct lesson to learn from surprises is that the world is full of surprises – Daniel Kahneman

Story 2 -

Investment duo of Warren Buffett and Charlie Munger was actually a trio 40 years ago – Rick Guerin was the third partner. In words of Warren what happened to Rick “Charlie and I always knew that we would become incredibly wealthy. We were not in a hurry to get wealthy, we knew it would happen. Rick was just as smart as us, but he was in a hurry.” What happened was that in the 1973-74 downturn Rick was levered with margin loans. And the stock market went down almost 70% in those two years so he got margin calls. He sold his Berkshire stock to Warren at under $40 a share. Rick was forced to sell as he was levered. Taleb puts it brilliantly. Having an edge and surviving are two different things – the first requires the second. You need to avoid ruin. At all costs.  

Success is a lousy teacher. It seduces smart people into thinking they can’t lose – Bill Gates

Story 3 -

December 29^th, 2008. Wall Street Journal front page. Russian professor Igor Panarin.

Around the end of June 2010 or early July the US will break into six pieces – with Alaska reverting to Russian control, California will revert back to form the nucleus of the “Californian Republic” and will be part of China or under Chinese influence. Texans will be a part of the “Texan Republic” a cluster of states that will go to Mexico or fall under Mexican influence. Washington DC and New York will be a part of the “Atlantic America” that may join the EU. Canada will grab a group of northern states.

This was at the height of the financial crisis and only in these times a story like this could appear at the front page of the most prestigious financial newspaper in the world. Pessimism just sounds smarter and more plausible than optimism. Tell someone that everything will be great and they will shrug you off or offer a skeptical eye. Tell someone they are in danger and you have their undivided attention. Assuming that something ugly will stay ugly is an easy forecast to make. And its persuasive since it does not require imagining the world changing. But problems correct and people adapt. Threats incentivise solutions in equal magnitude. That is a common plot of economic history that is too easily forgotten by pessimists who think in straight lines.

Progress happens too slowly to notice. Setbacks happen too quickly to ignore.

The psychology of money is actually our psychology, which is shaped by many things including our personalities, past experiences, relationships, outlook of the future and hence as unique as our fingerprints. Like our other important relationships, our relationship with money is never perfect and evolves with us and (hopefully) gets better with time.

The Powerful Banker

A light hearted satrical this time. A work of fiction. Any resemblance to a living person is purely coincidental. 

Pessimism is logical, cold and calculating. Optimism is warm and uplifting, a leap of faith. Pragmatism is nuanced. Choose well.

Now lets get to business. This powerful banker. Lets call him Mr U. You think of him when you think of investments. The complete man. The consummate relationship guy. Everyone who knows him knows that he knows everything. Even he knows that he knows everything. That has made him the richest banker not only in the milky way, but the entire universe.

Bankers are conservative. He is a super banker. So that makes him super conservative. We all know the story of the bunny that kept telling everyone that the sky is falling. Well Mr U can play that role very well, but he will be the lion in this story and not the bunny, as he is the king of this jungle. The lord of the rings.

He is called upon to fix broken things. He is tasked with fixing a big problem but has made little progress in over two years. Maybe there is too much on his plate. Maybe things are so broken that they cannot be fixed. Maybe the longer things remain broken the better for him. The one eyed king in the kingdom of the blind is still a king.

He can take on the regulator and emerge victorious. His investor calls start with a grim reminder of how bad the situation in his home country is and how his empire is the shining example of exemplary work. Either he believes only he has the foresight to see these things, or only he has the guts to say these things, or only he can say publicly what others say privately. Anyways he has been saying all this for so long that he is hoping all these come true. You see the longer you keep repeating yourself the more you reinforce your own beliefs.

The last time he was so confident was in 2008 after the Lehman collapse. All his PMS were on record cash and did magnificently while the markets melted. The strategies remained liquid (reference stock market meltdown) and missed the big rally of 2009 so badly that the schemes had to be wound down. In 2008 you were driving a car. Now you are driving a bus. Your organisation size and stature have changed and you need to change as well.

In Dangal before the final bout the encouraging words of Mr Phogat to his daughter were “if you win tomorrow, you will become an example (misaal). And examples are never forgotten, they are always given as a reference”

JP Morgan became JP Morgan when he displayed his grit and character in tough times, standing up to deliver when times were the toughest. That is why he is still considered the greatest. Otherwise all bankers think they are the centre of the universe and are forgotten as soon as they retire. Hope is a good thing. Don’t take it away from people, if you can’t give it to them. You are in a country which is marching towards its “tryst with destiny.” Do not make fools of people who have taken risks by starting a business or taking a mortgage or any other loan. Everyone does well if the country prospers. We should keep our worst fears to ourselves and not make grand business plans around the possibilities of the nightmares coming true. Maybe the sky will fall. Maybe the world will come to an end. After all, we are all dead in the long run. But when that time comes, you may not be happy to say “I told you so”.

Mr U is also a gifted cricketer. When destiny gave him a full toss, he ducked as if it was a hand grenade. Not everyone is lucky to have a second chance. There are still some balls to go and the innings are in your hands. So play well. And if you can’t let others come and steady the innings.

There is still time to become a misaal. Grab it with both hands, while destiny is still kind. There is a big difference between intelligence and wisdom. Choose well.

The Devils Advocate

Real risk is what remains unknown after everything known has been considered.

The world respects the intelligence agencies of Israel. Their country is surrounded by people who hate them (India comes a close second in neighborhood hostility) but Israel has prospered with help of its intelligence agencies and their bold actions.

Things were very different years ago. In 1973 Israel was attacked simultaneously by its neighbors and was taken by surprise. In spite of having a lot of actionable intelligence that the attack would happen the decision makers did not take any action. Israel did win the war and then went on to find out why all the intelligence was ignored. The culprit was Group Think. All the people in the decision making group, in spite of acknowledging the intelligence reports, chose to ignore them only to be surprised later. This led to the principal of the Tenth Man or Devils Advocate. The logic is that if 9 people of the group agree on something, the tenth man has to compulsorily take an opposite view and point to loopholes so that all angles can be discussed and a better decision can be taken.

What Am I Missing Here?

Is a good question to keep asking to keep us alert, even paranoid. Being aware of the fact that there is always the unknowable and unforeseen that will disrupt the best plans will help us create better plans with higher margins of safety. History teaches us that trying to be efficient in everything is futile. Margin of safety is a cost until it becomes a life saver. That is why plan B and Plan C are as important as Plan A, which will work most of the time but some times back up will need to be called.

Why is dissent so difficult? Dissenters get labelled and ousted. Conformity kept us in tribes and safe in groups. Being contrarian is painful most of the time. The label of Devils Advocate itself has negativity attached to it.

If everyone agrees with us on something, we need to find dissenters and then listen to them or become one ourselves. It is very difficult to acknowledge a counter view and even more difficult to act on it. It is best to keep an open mind and listen to potential problem areas one may have overlooked, so that the plan can become better.

It Is equally important to come to a decision and once done, the group should whole heartedly back it. Dissenting and agreeing should not become political tools to win points or settle scores. Ideally, the devils advocate should try to see all the follies and the overlooked aspects and then get aligned to the final decision of the group. The idea is to make the final decision stronger and not sabotage it. Real sabotage is in seeing the folly and not pointing it out.

Find time to relax

Don’t underestimate the value of doing nothing – Winnie the pooh

It is important to work hard but it is equally important to rest, relax and recover from hard work so that we are ready for it the next day. All of us want to be productive, efficient and do more in less time. Nothing wrong in that. However we need to understand that even machines have a scheduled downtime and we need the same.

It was easier pre Covid to plan for downtime. When WFH started it looked like a lot of downtime. Now we have got into a zone where there is a lot of work and a loss of sense of weekdays and weekends. Earlier one could “switch off” as there was office and home. Now homes have become offices so the boundary has blurred. With many establishments still closed, activities like dining out and movie watching which were downtime earlier are now out of bounds. Vacations are out too. Being holed up at home has also increased screen time in a big way. Hence downtime has become even more important.    

Downtime is more relevant for a break for the mind rather than the body. The body rejuvenates itself in sleep. It’s the mind that needs some time off. A full-throttle lifestyle can chisel away at productivity, creativity, and happiness, says Stew Friedman, Ph.D., the director of the Wharton Work/Life Integration Project at the University of Pennsylvania and the author of Leading the Life You Want. "The mind needs rest," he says. "Research shows that after you take a mental time-out, you are better at creative thinking and coming up with solutions and new ideas, and you feel more content."                

Some ideas to get it done –

Non demanding tasks like gardening, doing dishes (WFH special) allows your mind to relax

Yoga, walk in the park, jog, swim or any other mild physical activity

Anything that you like to do – read, going to the movies, playing a musical instrument or with your kids and pets, sketching, painting  

There should be only one rule for the downtime – ignore your phone. Checking social media does not count as downtime!!

It’s ironical – the busier we are, the more downtime we need. As the rested fields give the best crops, the rested mind brings more productivity. Do more by doing slightly less.

Sources –

https://www.shape.com/lifestyle/mind-and-body/why-its-important-schedule-more-downtime-your-brain

https://claritychi.com/the-importance-of-downtime/

When Nature Inspires

We have a symbiotic relationship with nature. Not only does it provide for us but also inspires us. People find answers when they are in the lap of nature. Creative people swear by it. Apart from the indirect inspiration by being in nature, there are many examples where we have taken direct inspiration from animals around us. After all, nature has been solving problems for millions of years and only the best ideas thrive in the natural world. Let us look at some of them.

Woodpeckers inspired better black boxes that survive mechanical shocks that come with airplane crashes

Kingfisher inspired scientists in Japan when they were struggling to deal with the sonic boom (which leads to noise pollution) caused by the high speed of the bullet train

Mosquitoes are inspiring us to make pain free (almost) injections

Camouflage techniques

Termite colonies on efficient heat distribution and ventilation in dense populations

The fins of humpback whales helped us design efficient turbines and pumps

Velcro was inspired by tiny hooks on the burrs surface that latch on to any surface

Bird safe glass that was inspired from the spider’s web

Fireflies inspired brighter LED bulbs

The ability of mussels to attach themselves on wet surfaces inspired a better adhesive

Humming Birds are inspiring better helicopter technology

Butterfly wings are inspiring anti counterfeit technology which is better than holograms

Camel toes are inspiring better tyres for use in sand and on Mars  

The shark skin and its ability to stay clean inspired better ships

The most popular story has been how birds have always fascinated us and inspired us to take flight.

There is a very good podcast from BBC – 30 animals that made us smarter with many more amazing examples like these.

It is said that if you want a better answer, you need to ask a better question. We should also add that we need to look around us, not only for inspiration but for the solutions to our problems as well.

Sources –

https://www.bbc.co.uk/sounds/play/p0731jmf

https://www.popularmechanics.com/science/animals/g28912650/animal-inspired-technologies/