changes
15May08Today marks 20 years since the Soviet army began withdrawing from Afghanistan.
Plus ça change, you could say. It’s not an anniversary I’m seeing flagged up in the media today. But then, we’re used to wandering the road less travelled over here at the Knackered Hack - if not completely untravelled.
Crucial to the mounting tide of pressure that led to Soviet withdrawal was an opening up of the culture that started in early Spring 1986 when I visited Leningrad and met Kino’s Viktor Tsoi (whom I snapped this picture of while he tuned up at a small concert in April ‘86).
The song Peremen (or Changes) was an important anthem for that period, and perhaps Tsoi’s most recognized contribution to the tectonic shift in our geo-politics of the past two decades. It appeared to help mobilize Soviet youth culture toward a more democratic and uncertain future, even though accounts suggest that this was not Tsoi’s direct intention.
I’ve been very much taken with the following video of the song. The visuals aren’t of Viktor, of course, but this is nonetheless a powerful interpretation. I don’t know if he is using any recognised sign language (can anybody illuminate me?) but it certainly conveys something forcefully, whatever that something is. This was, incidentally, used as the soundtrack for a DIY, low-budget yet critically-acclaimed Russian film Dust (2005). I’ve not seen it, but this review sounds compelling if you are an art-house type.
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Tags: Afghanistan, Dust, kino, Leningrad, Peremen, Soviet Union, Viktor TsoiRelated posts
i went on a phone hunt
07May08Having indicated a while ago that I would plump for an iPhone, I chickened out the other day and defaulted to my previous rule of thumb which was buy the best Nokia. But this also satisfied that other aforementioned heuristic, i.e. the gift-horse mouth-staring one. The cost to replace my existing pda-phone was less than zero, because they offered me a contract better than the previous one, and much better than anything I’d seen advertised on any network.
Sometimes I wish I had not bothered, because having had the device nearly a month, I have not had time to programme it or migrate contacts. And the storage card is delayed, so loading music, podcasts, portable Russian lessons and other audio joys has had to wait.
And yet. The thing has a 5 megapixel camera in it with Carl Zeiss optics, which Apple’s Steve Jobs is dismissive of, having made the iPhone’s camera to a lesser spec. There may be nothing to choose between the two really, but I’m strangely overjoyed and inspired to photograph any time, any place and in a way that the graininess of my old phone discouraged. I’m a fully-fledged Flickr fan.
Fortunately too, the phone has an FM radio in it, which sounds a bit retrograde in this day and age. But over the past week or two I’ve been looking for inspiration and concentration. The BBC’s classical channel, Radio 3, has been providing it, offering as ever a wide range of frequently unfamiliar classical music of all centuries. And it stops me from listening to Pink Floyd when I’m out running. Shine on you crazy diamond. Auditory variation indeed.
Trees and woodland seem to do the same thing for me visually, and the phone camera now means that I capture some of that stimulus for posterity, and the limbic of you, my long-suffering reader. Excepting the flower, these pictures were taken Monday at Claverton Manor (AKA The American Museum) near Bath, which overlooks the Avon Valley. Topographically, I think it may be true to say that this is one of the most varied landscapes on the planet, and readers of Simon Winchester’s The Map That Changed the World: A Tale of Rocks, Ruin and Redemption
Related posts
I’ve been interested in the concept of athletic injury — why it happens and how to avoid it — since my early attempts at distance running went wrong. My failure to properly manage the progression from half- to full-marathon training scuppered my enjoyment at the full distance and cost me no small amount of time, money and pain at the physio clinic.
Last year I asked the London Marathon folks how many places they allocate each year, and how many drop out before the day, but answer came there none. Many runners, I’m sure, tough it out on inadequate training and recovery, just as I did in 2005, with a virus or other illness that seems marginal in the context of the joy of getting a place in this massive mobile folk festival, or the sense of obligation to one’s sponsors. The latter, of course, is very powerful.
But during all my middle-aged attempts at higher fitness, I think the most interesting concept I’ve come across appeared just the other day in the sports science newsletter Peak Performance:-
There is a price to be paid for developing specific robustness, and it goes some way to explaining how highly trained athletes can still be susceptible to injury. As training and strength progress we become increasingly adapted to the stimulus our body expects. However, high levels of adaptation to a familiar stress may conversely leave you potentially fragile to an unexpected stress. And as the highly adaptable and complex being that you are, it is often tiny unexpected stresses that may prove catastrophic. This is referred to as the robustness-fragility trade-off.
The concept is new to me, but presumably it will not be to those familiar with complex systems, be they biological or technological. I’m guessing here that it should also resonate in the workplace, school, the home and even the family. The more we become good at the specific skill, task, business or market orientation, the more vulnerable perhaps we are to some not entirely distant butterfly-wing flap - the tooth that cracks while biting on nothing more than a lettuce leaf.
Well, I’ve heard in business the suggestion that the big non-linearities are kind of unavoidable, and that their impact will be evenly distributed, so there is not much competitive advantage in laying down tools and tinkering in some other less defined direction, which is what the Peak Performance article advocates for physiological purposes.
I think they are telling us to do a bit more than just cross-training, the benefits of which are well-documented, but try and incorporate a range of movements into your life and workouts. For example, the article recommends introducing a “bandwidth of variability” in the way we run or exercise, and do things that challenge our coordination.
For runners (which is mostly where my interests lie) exercises like skipping and even hopscotch are recommended. It seems a far cry from what we conceive of as the serious business of piling on the miles.
Perhaps a bit more corporate hopscotch, and some of our currently endangered institutions might now be looking a little less vulnerable? But I doubt the stock analysts would be able to reduce it to a metric for discussion, so it is only through the wisdom of failure that most managers are likely to allocate any time or resources to such a pursuit.
The difficulty is that we prefer to focus on the task in hand and see ourselves progress directly at the sport or discipline in which we will be measured. The greater discipline required to step back and spend a little bit of time filling in the gaps seems to come at the cost of specific progress on that road to greater robustness in our chosen sport or business endeavour. That less-travelled training road is also likely to leave us feeling that we are falling behind our colleagues or competitors.
For example, if the choice exists between dropping some miles on the training path and some core stability training, the closer to an event the more likely that non sport-specific activity is going to be foregone if there is some other pressing work or family responsibility.
Very early readers of the Knackered Hack will recall my focus on rugby player Jonny Wilkinson’s return to competitive sport, and his own comments on the mismanagement of his early training regime.
Up to now I have perhaps not had the strength to make these tough decisions because I always believed the toughest decision was to stay on the field and “tough it out” for an extra hour or so. The tough decisions for me now are about getting the most out of my training while still being able to rest and recuperate for the weekend’s game. I still train numerous times every day but I try now to train better and smarter, which does not necessarily always mean longer.
It is for this reason that, rather than focus on a specific event goal like the marathon, my training approach is now holistic, trying to put together some of the things I’ve learned over the past several years. This may mean a slower, more varied route to robustness. All that said, my opinion of my current regime is that it is still too monotonous. So, inspired by Peak Performance, I will be ringing the changes in the coming weeks with weights, tennis, badminton, skipping, basketball, and maybe even some hopscotch (corporate and otherwise).
Share This Tags: cross-training, exercise, Jonny-Wilkinson, Peak Performance, recovery, resilience, trainingRelated posts
pop finance
The RSA Lecture by Brooke Harrington last Thursday was a great deal of fun. In a few weeks the RSA will put up a full video on their soon-to-be relaunched website, so when I see that I’ll publish the link.
As I mentioned before, Brooke’s work on diverse perspectives overlaps somewhat with that of Scott Page, and they have both sojourned at the Santa Fe Institute. It was about a year ago that Scott himself spoke at the RSA. As it will take me a while to get through the book, and I have one or two other books on the block to review for you, here are some quick takeaways from my notes.
Brooke said that prior to her research on investment clubs and their returns, dollar value of diversity in decision-making had not been adequately quantified, although it had been well-observed qualitatively.
Women, no matter what they did professionally, self-selected into choosing or advocating consumer stocks of the traditionally female domain. This gender appropriateness among even highly-qualified financial types was intriguing, and Brooke suggested it happens because we regress to comfort zones in this kind of decision-making, even as sophisticated adults.
Cocktail parties may have a significant influence on stock selection, Brooke says. She identified that in the late ’90s it was a requirement to discuss stock choices if one went out to parties, so choices would naturally be determined by what people considered socially acceptable. As she said, it would not be so nice to say you made a killing on tobacco stocks.
Social factors, rather than financial failure, were also the main reasons why clubs closed. Those that folded seemed to do so because of differences of opinion or frustration with free-riders, not because they lost money.
Identity is doubly important. People, even professional investors, buy stocks that they can identify with. So corporate identity is going to matter more, and there will be a further proliferation of identity funds: ethical, religious (Catholic, Lutheran, Sharia-based) etc.
Diverse perspectives are hard to achieve in organizations for cultural reasons. There can be huge conformity pressure that stops alternative information surfacing. Consequently, leadership is very important, the ability to tolerate and encourage dissonant voices being a quality generally lacking in many institutional frameworks.
Some more notes for all management, especially HR: diverse perspectives take a little longer to manage to fruition. There is too much emphasis in recruitment on bringing in staff who can hit the ground running, so a form of short-termism denies institutions the higher returns that diversity delivers. People also tend to preferentially associate, so boards can easily be dominated by “friends” of the CEO.
Different ethnic, religious and age backgrounds improve decision-making. And, as markets are complex systems, you need this diversity because each element brings more information, and you need as much information as possible when there is complexity.
Brooke was very gracious in conversation over coffee after the talk, for which I must thank her. She elaborated on one or two points, expressing a view that business schools in the US have tended to contribute to the process of emphasising corporate conformity. She also said it was necessary to examine the history of a company, its previous management etc to understand its culture, because, as Gerd Gigerenzer explains in Gut Feelings, the effect of those unwritten rules of previous executives can prevail long after they depart. “History is important,” she says.
The BBC interviewed Brooke here last week. The relevant section starts about 18 minutes in and gives more narrative on the phenomenon of investment clubs in the US.
[Editorial note: it seems appropriate, at this point, to add a diversity category to this blog as the categories themselves are nothing if not diverse.]
Share This Tags: Brooke Harrington, diversity, Gerd-Gigerenzer, Scott-PageRelated posts
smarter than the av-er-age bear
18Apr08
I was thinking about the geophysicist Didier Sornette the other day. The reason being that (in my counter-factual way) I wondered what the world would look like if research (or a prediction, or an analysis) by people like Sornette were avidly watched — front-page news even. And then I remembered that I’d already written that post a long time ago, in my first blog. Like the other Yogi, it was déjà vu all over again.
Every day that I wake up to more bad news about the credit crunch, I feel slightly nauseated. It’s a bit like when you’re on a boat and the weather is closing in. Or the point that night falls and you’re out of sight of land. Or both. You’ve been there before, but your night vision needs to kick in. Time to hit the chart table, fix your position, re-evaluate how much sail you are carrying. A combination of nerves and trepidation focuses the mind. The concern is not so much for yourself, but for others. You’re in a complex system. Your fear must not guide you. You need to be confident, but careful. You may be master of the ship, but not the elements nor the other seafarers. A wetted finger is not good enough to figure out which way the wind’s really blowing. You need to calculate and apply learned heuristics, the wisdom of ages, one of which is “don’t rely on electronics”.
Finance being the bad-news-of-the-day for months on end is something I’ve never experienced before. I cut my teeth as a journalist during the extended bear market in oil that ended with the First Gulf War. The build-up was virtually a private affair for those of us who were specialists; no-one cared that much that the economy was benefiting from lower oil prices. The inflection point, when it came, was very public and geopolitical. Its consequences are still being worked out. I certainly did not see the Iraqi invasion of Kuwait coming; I was convinced that Saddam Hussein was just posturing. And yet, in retrospect, I vividly remember a conversation I’d had with a wise soul from the Middle East who showed an inexplicable agitation a few weeks before the invasion that you might characterise in the same way that animals are said to become jumpy before an earthquake. What was upsetting him was that he could read the runes whereas his colleagues could not. I was 25, still working below decks, lucky that he would take my call, and lacked the experience to fully engage with what was bothering him. The build-up to the credit crunch has been different and in some ways has already engaged the entire economically active population in psychological and also very concrete ways. The fall-out looks like being just as comprehensive.
It would be helpful if one could feel some sense of vindication, but it just ain’t happening. When you see someone driving recklessly, you don’t know whether it will end in a crash; that you are on the same bit of road — to mix metaphors — means you are inescapably in the same boat.
Getting it wrong is the sine qua non of economic forecasting. As the Stand-up Economist (whose gig on Saturday night at Oxford’s OFS I’ll be attending), says:-
Micro-economists are people who are wrong about specific things, and macro-economists are wrong about things in general … macro-economists have successfully predicted 9 out of the last 5 recessions.
Weather forecasters are often pilloried for getting it wrong. But, of all specialists, behavioural studies have revealed that they are the least confident in their own predictions. Economists and stock analysts, by contrast, are the most cocksure. And yet, the same people who failed consistently to identify the scale of the danger are also asked now to explain what happened. Nice work if you can get it.
Predicting markets is a notoriously tricky business, arguably foolish, and the great criticism that bulls usually level at those bears predicting bubble-bursts is that “even a stopped clock is right twice a day”. But what’s the inverse, exactly? Can’t the same criticism be levelled at the bulls? — precisely how “right” are they the majority of the time? And what’s the consequence of the bulls being very wrong just the once? Think back to Joanna Lumley playing Purdey [sigh] in The New Avengers in the 1970s, having to shoot her way through a kind of paintball training course. She was pleased that she’d scored 99%, marked by a single red dot that represented a bullet. Her sidekick, Gambit, pointed out it’s the 1% that kills you.
But I take the stopped clock thing seriously as a criticism of scepticism because it disparagingly suggests inaction and risk-aversion — who would want to be Chicken-Licken, after all? Certainly not the Emperor With No Clothes — and it cropped up in a piece of newspaper coverage about the credit crunch recently. My James Cramer reference the other day bears some reflection too. He would maintain, I believe, that his spiel is aimed at those with spare cash to gamble. But I think, in truth, he has been a cheer-leader for an industry that has been sailing toward the storm carrying every last scrap of sail in the locker.
But then, there is a problem with consistency. It’s generally over-rated. The ability to change one’s mind without shame should be more highly prized. As should be the ability to accept, without regret, that things may turn out better than one fears. Many a fisherman decides to stay in port only to find his catch and income is lost to a storm that doesn’t quite descend. He takes risks for a living, but I’m sure has learned too that it’s better to be wise before the event when so much is at stake. By contrast, a lifeboat man will put to sea in all weathers. But you’re taught at navigation school that he’s not to be confused with the AA man who will come and fill up your tank if you run out of petrol; he should only need to put to sea for the real black swans, not your incompetence. He won’t make that judgement, of course, but will respond to your Mayday anyway.
And so I was looking back at my own adventures as a Jeremiah, thinking about questions of timing. And that’s when I remembered that old post from my earlier blog about Didier Sornette. Sornette has long been on my reading list and in my view is one of the larger anti-heroes of modern finance that comprise my anti-library of unread books. He fits into that category where the Econophysics blog sits. The jacket of his book on markets, like Mandelbrot’s, shows fractal snail-shell patterns: you get the picture. I must buy it some day.
But I did read one or two of Sornette’s papers when they came out. I found them compelling, although the maths was completely impenetrable for me. It would be hard to find a more serious analysis of how vulnerable the markets had become at that point. That was the time to take in sail, batten down the hatches, and prepare (if necessary) to trail warps, spill oil on troubled waters, consider the possibility of removing all sail — what ocean yachtsmen call “bare poles” sailing, in the case of the perfect storm. In finance, it would mean de-leveraging early, not now.
At a very small talk I attended with Nassim Taleb in London way back in 2004, Nassim was asked by a London quant whether he thought the UK property market was in a bubble. Typical of Nassim at that time, I believe, he was confessing to not reading the newspapers so had no idea. The quant persisted that Sornette thought UK housing was in a bubble. Taleb’s response, if I recall correctly was this: “If Sornette thinks there is a bubble, then there is a bubble”. These are things I tend to remember.
Interesting, because Alan Greenspan was defending himself in the financial press the other day — and has done many times before — saying that it’s not possible to identify when markets are in bubbles. It’s a view that the prediction industry likes to repeat. But my understanding of Sornette’s science is that this is just not correct; you can identify bubble conditions from within trading price data using the same approach a seismologist does to gauge the susceptibility of the fault lines between tectonic plates to a sudden shift. I think the mathematical model he applied to the housing markets goes by the name of “log-periodic oscillations”. Predicting when the quake will occur, and with what magnitude, is the problem. That is still a work in progress, but one guesses that Sornette will be at the forefront of it as it unfolds.
Anyway, this is part of what I posted way back in June 2005 in my first, rather arch attempt at blogging called “Not that I’m Biased”:
If one is looking for a truly disinterested expert, and one with the latest knowledge on bubbles, we recommend geophysicist Didier Sornette. The mathematics of Sornette’s discipline is well beyond the lay reader. The essence of it is to show how complex systems work. He is an expert in the study of earthquakes. Stock market and housing crashes are the financial equivalents.
When people think about housing they don’t tend to think of a complex system. They will first think about their own house, those in the neighbourhood, and then a national price index recently described in the press which provides a sense of overall direction. They will probably then invoke a sense of someone who made a killing on property, or whom they saw renovate and sell at a profit on some TV show. From this they will make decisions to buy or sell. There is a strong element of imitation in what motivates them.
These behaviours are definitely part of what makes up a market, but Sornette’s specialism is in analysing them mathematically through study of the price activity of markets. Sornette’s last paper on housing demonstrated that the UK housing market would peak late 2003 or mid 2004, and then be susceptible to a crash. At that time, he did not characterise the US market as a bubble, but in his latest paper he shows that, two years on, the US is in a bubble.
A bubble with a crash in the UK will be one thing, but a serious reversal in the US would be very damaging. It remains to be hoped that the pump priming that occurred in 2000-2001 has not created a greater problem from which the world economy will suffer a more severe hangover.
It is no doubt a symptom of our collective aversion and lack of understanding of mathematics that Sornette’s work is not major news.
When the Asian tsunami hit, there was much hand-wringing about why the cooperation required to create an early warning system had failed. And yet, we know that events of that size are indeed extremely rare black swans, even though they appear to live in the folk memory of some of the coast-dwellers on Africa’s eastern seaboard. Financial shocks are coming with increasing frequency, but financial institutions, governments and the regulatory authorities — let alone the critical faculties of the media, — do not seem to be prioritising really listening to the complexity folks, despite the increasing volumes of accessible literature they have been generating in the past several years. It’s something I discussed yesterday with Brooke Harrington from the Max Planck Institute after her talk at the RSA. But that may have to wait for another post.
Photo credit: BrittneyBush
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