4/13: HM

I’m married to an absolute crackpot. Pinky can go so mental at times that it’s not even funny. She takes the concept of absurdity to a whole new level at times. She sometimes behaves so weird that I start wondering what I’ve married. And then she asks, “did you imagine I’d turn out like this when you married me?”. And I always reply “well, you’ve always been this mental”.

Let me do this in bullet points – she’s so mental that it’s difficult to structure this post in any other way.

  • She’s not normally that religious (maybe she was, but I’ve kinda drawn her away from it), but on some days she puts up a serious face and says, “Karu, don’t you think we should pray to God? Why have we become like this?”
  • There are things that get “stuck” in her head that she keeps repeating. Some times it’s the names of people which are unusual (oh, have I told you that she and her sister maintain a database of funny names?). Other times, it’s random words or phrases. Her latest obsession is with “responsible PIC” (I have no clue what that means)
  • Normally she’s an incredibly levelheaded and logical person, but at times she loses all signs of logic, and makes absurd connections. Like she thinks I have a loud voice because I was born in December! Go figure.
  • It’s incredibly hard to predict what might upset her (going by the above point, she sometimes rationalises this by saying all women are like this). Things that should normally upset her she doesn’t get upset by (that’s actually deeply upsetting for me), and she gets upset with things you’d have no clue has the potential to upset someone. Then again, I guess this bit of madness doesn’t make her stand apart so much.
  • She has a habit of saying something random completely disconnected to the ongoing conversation. OK I must mention here that this is not something that I’m particularly worried about, since I love “arbit conversations”. More on that in another post.
  • She displays a wide range of ages in terms of the way she acts. Within a particular domain, she can talk like she belongs to different age groups. Sometimes she sounds like she’s a middle aged lady. Other times her reasoning and advice makes her sound like a teenager. In that sense, age is just a number for that (so I don’t know why I’m writing this post series for her birthday!)
  • For a while she wouldn’t open the door when I rang the doorbell – I had to speak a passphrase she had come up with, and until I said that she wouldn’t oblige me

And the list goes on and continues to grow by the day – I won’t give away too much more about her, but all I’ll say is that these quirks make her a massively fun person, and I love her for all this!

Uncle’s son’s shorts are stuck!

1/13: Leaving home

2/13: Motherhood statements

3/13: Stockings

Portfolio communication

I just got a promotional message from my broker (ICICI Direct). The intention of the email is possibly to get me to log back on to the website and do some transactions – remember that the broker makes money when I transact, and buy-and-hold investors don’t make much money for them.

So the mail, which I’m sure has been crafted after getting some “data insight”, goes like this:

Here is a quick update on what is happening in the world of investments since you last visited your ICICIdirect.com investment account.
1. Your total portfolio size is INR [xxxxxx]*
2. Sensex moved up by 8.36% during this period#
3. To know more about the top performing stocks and mutual funds, click here.

While this information might be considered to be useful, it simply isn’t enough information to make me learn sufficiently about my portfolio to take any action.

It’s great to know what my portfolio value is, and what the Sensex moved by in this period (“since my last logon”). A simple additional piece of information would be how much my portfolio has gone up by in this period – to know how I’m performing relative to the market.

And right in my email, they could’ve suggested some mutual funds and stock portfolios that I should move my money to – and given me an easy way to click through to the website/app and trade into these new portfolios using a couple of clicks.

There’s so much that can be done in the field of personal finance, in terms of how brokers and advisors can help clients invest better. And a lot of it is simple formula-based, which means it can be automated and hence done at a fairly low cost.

But then as long as the amount of money brokers make is proportional to the amount the client trades, there will always be conflicts of interest.

The high cost of “relaxing” activities

So I have a problem. I can’t seem to enjoy movies any more. I’ve written about this before. My basic problem is that I end up double-guessing the plots of most movies that I watched (how many storylines are there anyways? According to Kurt Vonnegut, there are six story arcs).

So as I watch movies, I know exactly what is going to happen. And just continuing to watch the movie waiting for that to happen is simply a waste of time – it adds no information content to me.

The result is that I’m extremely selective about the kinds of movies I watch. Some genres, such as Westerns, work because even if the stories may be predictable, the execution and the manner of execution are not, and that makes for interesting watching.

Then, of course, there are directors who have built up a reputation of being “offbeat”, where you can expect that their movies don’t follow expected story arcs – their movies have enough information content to make them worth watching.

And most “classic” movies (take any of the IMDB Top 250, for example) have stories that are told in an extremely compelling fashion – sometimes you might know what happens, but the way things are built up implies that you don’t want to miss watching it happening.

Now, all this is fine, and something I’ve written about before. The point of this post is that while I feel this way about movies, my wife doesn’t feel the same way. She watches pretty much anything, even if the stories are utterly predictable.

For example, she’s watched at least a 100 Telugu movies (though, admittedly, during a particularly jobless stretch in her MBA when she was watching loads of movies, even she got bored of the predictability of Telugu movies and switched to Tamil instead!). She likes to watch endless reruns of 90s Kannada movies that now appear rather lame (to me). She especially loves chick flicks, which I think have excess redundancy built into them for a very specific reason.

I don’t have a problem with any of this! In fact, I’m damn happy that she has a single-player hobby that enables her to keep herself busy when she’s bored. The only little problem I have is that she believes it is romantic to watch movies together. She might sell video for Amazon for a living, but she surely is a fan of “netflix and chill” (more the literal meaning than the euphemistic one).

And that is a problem for me, since I find the vast majority of movies boring and predictable, and she thinks the kind of movies I like are “too serious” and “not suitable for watching together” – an assessment I don’t disagree with (though I did make her watch For a Few Dollars More with me a couple of months back).

I’d prefer to spend our time together not spent in talking doing other activities – reading, for example (reading offers significantly higher throughput than movies, and that, I think, is a result of formats of several lengths being prevalent – newspaper articles, longform articles, books, etc.). I’ve offered to watch movies with her on the condition that I read something at the same time – an offer that has been soundly rejected (and I understand her reasons for that).

And so we reach a deadlock, and it repeats every time when we have time and want to chill. She wants to watch movies together. I initially agree, and then back out when presented with a choice of movies to watch. Sometimes I put myself through it, thoroughly not enjoying the process. Other times, much to her disappointment, we end up not watching.

Clearly there are no winners in this game!

 

 

Curation, editing and predictability

One of my favourite lunchtime hobbies over the last one year has been watching chess videos. My favourite publishers in this regard are GM Daniel King and Mato Jelic. King is a far superior analyst and goes into more depth while analysing games, though Jelic has a far larger repertoire (King usually only analyses games the day they were played).

In some ways I might be biased towards Jelic because his analysis and focus are largely in line with my strengths back during my days as a competitive chess player. Deep opening analysis, attacking games, the occasional tactical flourish and so on. He has a particular fondness for the games of Mikhail Tal, showering praises on his (Tal’s) sometimes erratic and seemingly purposeless sacrifices.

Once you watch a few videos of Jelic, though, you realise that there is a formula to his commentary. At some point in the game, he announces that the game is in a “critical position” and asks the viewer to pause the video and guess the next move. And a few seconds of pause later, he proceeds to show the move and move on with the game.

While this is an interesting exercise the first few times around, after a few times I started seeing a pattern – Jelic has a penchant for attacking positions, and the moves following his “critical positions” are more often than not sacrifices. And once I figured this bit out, I started explicitly looking for sacrifices or tactical combination every time he asked me to pause, and that has made the exercise a lot less fun.

I’d mentioned on this blog a few weeks back about my problem with watching movies – in that I’m constantly trying to second-guess the rest of the movie based on the information provided thus far. And when a movie gets too predictable, it tends to lose my attention. And thinking about it, I think sometimes it’s about curation or editing that makes things too predictable.

To take an example, my wife and I have been watching Masterchef Australia this year (no spoilers, please!), and I remarked to her the other day that episodes have been too predictable – at the end of every contest, it seems rather easy to predict who might win or go down, and so there has been little element of surprise in the show.

My wife remarked that this was not due to the nature of the competition itself (which she said is as good as earlier editions), but due to the poor editing of the show – during each competition, there is a disproportional amount of time dedicated to showing the spectacularly good and spectacularly bad performances.

Consequently, just this information – on who the show’s editors have chosen to focus on for the particular episode – conveys a sufficient amount of information on each person’s performance, without even seeing what they’ve made! A more equitable distribution of footage across competitors, on the other hand, would do a better job of keeping the viewers guessing!

It is similar in the case of Jelic’s videos. There is a pattern to the game situation where he pauses, which biases the viewer in terms of guessing what the next move will be. In order to make the experience superior for his viewers, Jelic should mix it up a bit, occasionally showing slow Carlsen-like positions, and stopping games at positional “critical positions”, for example. That can make the pauses more interesting, and improve viewer experience!

What are other situations where bad editing effectively gives away the plot, and diminishes the experience?

The toin coss method

My mother had an interesting way to deal with dilemmas for which she had no solution – she would just toss a coin. She had only one rule for the “game” – that once she had decided to toss the coin, she would accept the “coin’s decision” and not think further about it.

This enabled her to get over many instances of decision fatigue – you have a dilemma only when you have two comparable choices, and won’t do too much worse by picking either.

So there’s this dilemma that’s hit me since this morning and facing trouble in making the decision (one of the choices has unquantifiable benefits so an objective cost-benefit analysis is not possible), I thought I should go back to my mother’s old method. And conveniently I see a coin lying on the table a metre away from me.

Thinking about it, tossing it and accepting its decision is acceptable only if I’m equally inclined to the two possibilities (assuming it’s a fair coin). Let’s say that I want to pick choice A three out of four times (“mixed strategies” can be rational in game theory), then I should toss the coin twice and pick A if either of the tosses returns a head. And so forth.

Considering how much decision fatigue I face (there have been times when I’ve actually turned around a dozen times after having taken only one step in each direction, not able to make up my mind), I should perhaps adopt this method. This makes me think that decision fatigue is also hereditary – and it was because she faced so much decision fatigue that my mother had to invent the coin toss method.

The title of this post is a tribute to an old colleague who would unfailingly say “toin coss” every time he intended to say “coin toss”, and tossing coins was an analogy he would make fairly often.

Good things do happen to those who wait

So once again I’ve taken myself off Twitter and Facebook. After a three-month sabbatical which ended a month back, I was back on these two social networks in a “limited basis” – I had not installed the apps on my phone and would use them exclusively from my computer. But as days went by, I realised I was getting addicted once again, and losing plenty of time just checking if someone had replied to any of the wisecracks I had put on some of those. So I’ve taken myself off once again, this time for at least one month.

This post is about the last of my wisecracks on facebook before I left it. A facebook friend had put an update that said “good things do happen to those who wait”. I was in a particularly snarky mood, and decided to call out the fallacy and left the comment below.

Good things

In hindsight I’m not sure if it was a great decision – perhaps something good had happened to the poor guy after a really long time, and he had decided to celebrate it by means of putting this cryptic message. And I, in my finite wisdom, had decided to prick his balloon by spouting gyaan. Just before I logged out of facebook this morning, though, I checked and found that he had liked my comment, though I don’t know what to make of it.

Earlier this year I had met an old friend for dinner, and as we finished and were walking back to the mall parking lot, he asked for my views on religion. I took a while to answer, for I hadn’t given thought to the topic for a while. And then it hit me, and I told him, “once I started appreciating that correlation doesn’t imply causation, it’s very hard for me to believe in religion”. Thinking about it now, a lot of other common practices, which go beyond religion, are tied to mistaking correlation for causation.

Take, for example, the subject of the post. “Good things happen to those who wait”, they say. It is basically intended as encouragement for people who don’t succeed in the first few attempts. What it doesn’t take care of it that the failures in the first few attempts might be “random”, or that even success when it does happen is the result of a random process.

Say, for example, you are trying to get a head upon the toss of a coin. You expect half a chance of a head the first time. It disappoints. You assume the second time the chances should be better, since it didn’t work out the first time (you don’t realise the events are independent), and are disappointed again. A few more tails and disappointment turns to disillusionment, and you start wondering if the coin is fair at all. Finally, when you get a head, you think it is divine retribution for having waited, and say that “good things happen to those who wait”.

In your happiness that you finally got a head, what you assume is that repeated failure on the first few counts actually push up your chance of getting your head, and that led to your success on the Nth attempt. What you fail to take into account is that there was an equal chance (assuming a fair coin) of getting a tail on the Nth attempt also (which you would have brushed off, since you were used to it).

In my comment above I’ve said “selection bias” but I’m not sure if that’s the right terminology – essentially when things go the way you want them to, you take notice and ascribe credit, but when things don’t go the way you want you don’t notice.

How many times have you heard people going through a happy experience saying they’re going through it “by God’s grace?”. How many times have you heard people curse God for not listening to their prayers when they’re going through a bad patch? Hardly? Instead, how many times have you heard people tell you that God is “testing them” when they’re going through a bad patch?

It’s the same concept of letting your priors (you see God as a good guy who will never harm you) affect the way you see a certain event. So in my friend’s case above, after a few “tails” he had convinced himself that “good things do happen to those who wait” and was waiting for a few more coin tosses until he finally sprang a head and announced it to the world!

Now I remember: I think it’s called confirmation bias.

Why being on time is a wonderful thing

This post is NOT about Indigo airlines, though I do fly them fairly frequently (approximately once a month). It is about the general culture of timeliness, and how it can help all of us save time and money.

If you and I decide to meet at say, 1 pm tomorrow, what time are you likely to turn up? There are two factors to consider here – you don’t want to be too late since that will create a bad impression in my mind, and you wouldn’t want that. You don’t want to turn up too early, either, for you don’t want to end up waiting for me. So when you plan your travel to the place we are meeting, you will first estimate what time I’m likely to show up and then plan to turn up such that you’ll maximize the probability of turning up between the time I’m expected to show up and five minutes earlier.

Notice how this can change depending upon the culture of timeliness. If you and I know each other, and I know that you are a punctual person and vice versa, we will both make an attempt to time our travel so that we maximize our probability of being there before 1 pm (the appointed time). What if I think that you are perennially late? The problem here is that I need to not only shift the “mean” of when I want to get to the place, but the variance also changes!

Notice that in case I know you are habitually late, I’m unlikely to know precisely when you’re going to arrive. Say I estimate based on our past record that you might turn up any time between ten and twenty minutes after the appointed time. How will I now plan to arrive so that I arrive between five and zero minutes of the time when I expect you to arrive? My travel time to get to the place already creates one level of uncertainty and to that I need to add another level of uncertainty in terms of when you are expected to arrive! Thus, these two sources of variation end up adding up and I will either be late (in case I’m okay wtih that) or end up spending more time just waiting for you!

Essentially, because I know that I cannot precisely determine when you are likely to get there, I assume a variance of when you are likely to get there, and that variance will add to the variance of my travel time and thus I’ll have to give myself a larger buffer so that I need to be on time while not waiting for too long!

This is similar to what people in quantitative finance call “market price of risk”. Let me illustrate that again using travel time as an example. In case 1, travel time from my office to yours has a mean of 40 minutes and a variance of 10 minutes (let us assume it is normally distributed). In case 2, travel time from my office to yours has a mean of 40 minutes (same as above) but a variance of only 5 minutes. Let us assume I want to be on time for the meeting at least 97.5% of the time. What time should I leave in each case?

In the first case, the one sided 97.5% confidence interval for my travel time is 40 + 2 * 10 = 60 minutes, or I expect to take no more than 60 minutes 97.5% of the time. In the second case, however, it is only 50 (40  + 2 * 5) minutes! In the first case, if I want to ensure a 97.5% chance of being on time for our 1 pm meeting, I’ll need to leave my office at 12 noon, while in the second case I can leave a full ten minutes later!

You need to notice here is that in both cases, the average travel time is the same. The only thing that has changed is the variance. In the first case, because the variance of the travel time is larger, I need to leave earlier! Leaving ten minutes earlier is essentially the price I have to pay because of the larger variance!

Similarly, when there is a variance in my estimate of when you will arrive for the meeting, it adds to the variance of my travel time, and the total variance I need to consider for when I need to leave goes up! In other words, simply because there is a variance in when you will arrive for the meeting,  i will have to leave earlier to compensate for your variance!

What if we had a culture of being on time? Then, I would know that with a very high probability you would be there on time for the meeting, and that would reduce my overall variance, and make it easier for me to also be on time for the meeting!

Essentially, a culture of being on time can save time for both of us – simply because it eliminates the variability of when we will end up arriving for the meeting, and this saved time is reason enough to build a culture of punctuality.

Yet you have people who schedule back-to-back meetings that invariably cascade and ruin their reputations of being on time, and thus inconvenience themselves and their counterparties!