Sunday, April 27, 2014

Tweet from @mbookquotes

@mbookquotes: "The greatest weapon against stress is our ability to choose one thought over another." - William James

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Tweet from @mbookquotes

@mbookquotes: "Judge a man by his questions rather than by his answers." - Voltaire

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Saturday, April 26, 2014

Fw: Farnam Street: Ernest Hemingway’s 1954 Nobel Acceptance Speech on Working Alone

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From: Farnam Street <>
Date: Sat, 26 Apr 2014 10:11:04 +0000
To: <>
Subject: Farnam Street: Ernest Hemingway's 1954 Nobel Acceptance Speech on Working Alone

Farnam Street: Ernest Hemingway’s 1954 Nobel Acceptance Speech on Working Alone

Link to Farnam Street

Ernest Hemingway’s 1954 Nobel Acceptance Speech on Working Alone

Posted: 25 Apr 2014 05:00 AM PDT

"Writing, at its best, is a lonely life."

Solitude is an important aspect toward accomplishing great things, creative or otherwise. In fact, it’s one of the commonalities found amongst the routines of great writers and artists.

That’s not to say that if you lock yourself in a room, you’re going to turn into something great. It does suggest, however, that there is something to being alone with your thoughts.

The great philosophers enjoyed walking, in part for the peace and freedom it offered to play with ideas.

Stretches of solitude often enable, rather than prevent, meaningful work and quality time. And for the introverts among us, solitude refreshes our soul.


Ernest Hemingway was awarded the Nobel Prize in Literature in October of 1954. His acceptance speech, found in the 1972 biography Hemingway: The Writer as Artist, is one of the best ever. Unwilling to travel to Stockholm, after two nearly fatal plane crashes, Hemingway asked John C. Cabot, the United States Ambassador to Sweden (at the time), to read his speech.

Having no facility for speech-making and no command of oratory nor any domination of rhetoric, I wish to thank the administrators of the generosity of Alfred Nobel for this Prize.

No writer who knows the great writers who did not receive the Prize can accept it other than with humility. There is no need to list these writers. Everyone here may make his own list according to his knowledge and his conscience.

It would be impossible for me to ask the Ambassador of my country to read a speech in which a writer said all of the things which are in his heart. Things may not be immediately discernible in what a man writes, and in this sometimes he is fortunate; but eventually they are quite clear and by these and the degree of alchemy that he possesses he will endure or be forgotten.

Writing, at its best, is a lonely life. Organizations for writers palliate the writer's loneliness but I doubt if they improve his writing. He grows in public stature as he sheds his loneliness and often his work deteriorates. For he does his work alone and if he is a good enough writer he must face eternity, or the lack of it, each day.

For a true writer each book should be a new beginning where he tries again for something that is beyond attainment. He should always try for something that has never been done or that others have tried and failed. Then sometimes, with great luck, he will succeed.

How simple the writing of literature would be if it were only necessary to write in another way what has been well written. It is because we have had such great writers in the past that a writer is driven far out past where he can go, out to where no one can help him.

I have spoken too long for a writer. A writer should write what he has to say and not speak it. Again I thank you.

Brought to you by: Learning InfiniteChallenge. Discover. Grow. 'Learn by doing' with experts who have been there, done that!.

Friday, April 25, 2014

Fw: The Big Picture

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From: Barry Ritholtz <>
Sender: "Barry Ritholtz" <>
Date: Fri, 25 Apr 2014 23:02:05 +0000
To: <>
ReplyTo: Barry Ritholtz <>
Subject: The Big Picture

The latest from The Big Picture
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The Big Picture

Macro Perspective on the Capital Markets, Economy, Geopolitics, Technology, and Digital Media

In the 04/25/2014 edition:


Succinct Summations of Week's Event's 4.25.14

Succinct Summations week ending 4.25.14 Positives: 1. U.S. Durable goods rise 2.6% v 2% expected, biggest rise since January 2. University of Michigan consumer comes in at 84.1, the highest reading since July. 3. Euro-area PMI rose to 54 in April, up from 53.1 in March and higher than 53 expected 4. Richmond Fed comes...Read More
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Containing Ukraine

Containing Ukraine David R. Kotok April 25, 2014     The process is simple. Look at the front page of the Wall Street Journal and then the markets. Will Russia move troops across the border and seize Eastern Ukrainian territory? If so, what will be the consequences? There are several geopolitical scenarios being discussed. Punditry...Read More
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Apple In Numbers

How many iPads are sold every minute? Why did The Beatles sue Apple? How much money has Apple got stashed abroad?   Explore more visuals like this one on the web’s largest information design community – Visually.  
Read on »

10 Friday AM Reads

Did I mention its Friday?! • Solar Power Burns Old Utilities' Business Models (Daily Beast) see also Challenges Lie Ahead for North American Oil Production (NY Times) • How The FCC Plans to Save the Internet by Destroying It: An Explainer (Medium) • If a Bubble Bursts in Palo Alto, Does It Make a Sound? (NY Times)...Read More
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The Mystery of the Missing Home Buyers

This week, the New York Times launched The Upshot, combining aspects of the Washington Post's Wonkblog with Nate Silver's 538. Edited by Pulitzer Prize winner and former economics columnist David Leonhardt, we linked to the inaugural piece “America's Middle Class Is No Longer the World's Richest.” This morning, I want to direct your attention to...Read More
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Jeff Sachs: Why We Need a Wealth Tax

Source: Bloomberg TV
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2015 Ferrari California T

Gorgeous! More photos after the jump Source: Car and Driver
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The Flight From Maturity

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Science Shmience

Adam Zyglis on Science Skeptics   Adam Zyglis, The Buffalo News  
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Fw: Farnam Street: Mental Model: Complex Adaptive Systems

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From: Farnam Street <>
Date: Wed, 23 Apr 2014 10:10:43 +0000
To: <>
Subject: Farnam Street: Mental Model: Complex Adaptive Systems

Farnam Street: Mental Model: Complex Adaptive Systems

Link to Farnam Street

Mental Model: Complex Adaptive Systems

Posted: 22 Apr 2014 05:22 AM PDT


Today let's explore the concept of the Complex Adaptive System and see how this model might apply in various walks of life.

To illustrate what a complex adaptive system is, and just as importantly, what it is not, let's take the example of a "driving system" – or as we usually refer to it, a car. (I have cribbed some parts of this example from the excellent book Complex Adaptive Systems by John Miller and Scott Page.)

The interior of a car, at first glance is complicated. There are seats, belts, buttons, levers, knobs, a wheel, etc. Removing the passenger car seats would make this system less complicated. However, the system would remain essentially functional. Thus, we would not call the car interior complex.

The mechanical workings of a car, however, are complex. The system has interdependent components that must all simultaneously serve their function in order for the system to work. The higher order function, driving, derives from the interaction of the parts in a very specific way.

Let's say instead of the passenger seats, we remove the timing belt. Unlike the seats, the timing belt is a necessary node for the system to function properly. Our "driving system" is now useless. The system has complexities, but they are not what we would call adaptive.

To understand a complex adaptive system, let's put hundreds of "driving systems" on the same road, each with the goal of reaching their destination within an expected amount of time. We call this traffic. Traffic is a complex system in which its inhabitants adapt to each other's actions. Let's see it in action.


On a popular route into a major city, we observe a car in flames on the side of the road, with firefighters working to put out the fire. Naturally, cars will slow to observe the wreck. As the first cars slow, the cars behind them slow in turn. The cars behind them must slow as well. With everyone becoming increasingly agitated, we've got a traffic jam. The jam emerges from the interaction of the parts of the system.

With the traffic jam formed, potential entrants to the jam—let's call them Group #2—get on their smartphones and learn that there is an accident ahead which may take hours to clear. Upon learning of the accident, they predictably begin to adapt by finding another route. Suppose there is only one alternate route into the city. What happens now? The alternate route forms a second jam! (I'm stressed out just writing about this.)

Now let's introduce a third group of participants, which must choose between jams. Predicting the actions of this third group is very hard to do. Perhaps so many people in group #2 have altered their route that the second jam is worse than the first, causing the majority of the third group to choose jam #1. Perhaps, anticipating that others will follow that same line of reasoning, they instead choose jam #2. Perhaps they stay home!

What we see here are emergent properties of the complex adaptive system called traffic. By the time we hit this third layer of participants, predicting the behavior of the system has become extremely difficult, if not impossible.

The key element of a complex adaptive system is the social element. The belts and pulleys inside a car do not communicate with one another and adapt their behavior to the behavior of the other parts in an infinite loop. Drivers, on the other hand, do exactly that.


Where else do we see this phenomenon? The stock market is a great example. Instead of describing it myself, let's use the words of John Maynard Keynes, who brilliantly related the nature of the market's complex adaptive parts to that of a beauty contest in chapter 12 of The General Theory.

Or, to change the metaphor slightly, professional investment may be likened to those newspaper competitions in which the competitors have to pick out the six prettiest faces from a hundred photographs, the prize being awarded to the competitor whose choice most nearly corresponds to the average preferences of the competitors as a whole; so that each competitor has to pick, not those faces which he himself finds prettiest, but those which he thinks likeliest to catch the fancy of the other competitors, all of whom are looking at the problem from the same point of view. It is not a case of choosing those which, to the best of one's judgment, are really the prettiest, nor even those which average opinion genuinely thinks the prettiest. We have reached the third degree where we devote our intelligences to anticipating what average opinion expects the average opinion to be. And there are some, I believe, who practice the fourth, fifth and higher degrees.

Like traffic, the complex, adaptive nature of the market is very clear. The participants in the market are interacting with one another constantly and adapting their behavior to what they know about others' behavior. Stock prices jiggle all day long in this fashion. Forecasting outcomes in this system is extremely challenging.

To illustrate, suppose that a very skilled, influential, and perhaps lucky, market forecaster successfully calls a market crash. (There were a few in 2008, for example.) Five years later, he publically calls for a second crash. Given his prescience in the prior crash, market participants might decide to sell their stocks rapidly, causing a crash for no other reason than the fact that it was predicted! Like traffic reports on the radio, the very act of observing and predicting has a crucial impact on the behavior of the system.

Thus, although we know that over the long term, stock prices roughly track the value of their underlying businesses, in the short run almost anything can occur due to the highly adaptive nature of market participants.


This understanding helps us understand some things that are not complex adaptive systems. Take the local weather. If the Doppler 3000 forecast on the local news predicts rain on Thursday, is the rain any less likely to occur? No. The act of predicting has not influenced the outcome. Although near-term weather is extremely complex, with many interacting parts leading to higher order outcomes, it does have an element of predictability.

On the other hand, we might call the Earth's climate partially adaptive, due to the influence of human beings. (Have the cries of global warming and predictions of its worsening not begun affecting the very behavior causing the warming?)

Thus, behavioral dynamics indicate a key difference between weather and climate, and between systems that are simply complex and those that are also adaptive. Failure to use higher-order thinking when considering outcomes in adaptive systems is a common cause of overconfidence in prediction making.


Complex Adaptive Systems is part of the Farnam Street latticework of Mental Models.

Brought to you by: Learning InfiniteChallenge. Discover. Grow. 'Learn by doing' with experts who have been there, done that!.

Saturday, April 12, 2014

Tuesday, April 8, 2014


The debate over HFT - Is a great example of upton Sinclair's observation...

It's hard to get a man to understand (or Agree to) something his salary ( or position) dictates he not!!!

Stability and Growth - The Yin and Yang of Modular-Finance....

Life is like riding a bicycle -  to Keep your balance you must keep moving....

Albert Einstein