On Alonso and Delta Hedging and Creating Positive Black Swans (and louvvu of course)

Yesterday, on the Twisted Shout blog, I had blogged about Xabi Alonso, and his methods for scoring goals. Complete with videos of a few of his goals, and incomplete because I couldn’t find a few other videos, I explained how he goes about the entire process. He takes long shots, I had explained. From a distance. Hoping to catch the goalkeeper off guard. And accurate enough to get the ball in the net most of the time.

Towards the end of The Black Swan, Nassim Taleb talks about how you can make black swans work for you. He talks about industries such as moviemaking and book publishing, and he says they traditionally thrive on positive black swans. They lose a little money on most projects – books or movies, but make significantly more money when one of them succeeds.

The book industry, Taleb argues, has now lost its traditional revenue model. Nowadays, the norm for publishers is to dole out huge advances to authors who will potentially write blockbusters. This, Taleb says, now exposes the publishers to huge negative black swans. The advances are so huge that if a book sells well they recover their investments. If not, they are prone to losing a huge amount.

I notice a similar problem in the romance industry. Suppose you have been hitting on, or even seeing, a girl for a long time, and it’s now time for measurement. By conducting the measurement experiment now, you are exposing yourself to a huge negative black swan. You have already made considerable investment in the relationship, mostly emotional but also monetary and temporal. And what if the measurement doesn’t go the way you want it to go? You are already in the D (desire) of Kotler’s AIDA. It will take a long time for you to recover from it, and this could even be career threatening, as I had discovered the hard way a couple of days years back.

Now, my theory with relationships (I don’t know how much you want to trust this – since I’ve never been in a relationship) is that in order to succeed, both parties should be at least in the I (interest) zone. And one of the parties has to be in D zone. This is a necessary but not sufficient condition for the relationship to go thorugh.

So, how about testing whether the other person is in the I zone when you are also in I zone? If she is, then well and good – you can start the process of figuring out if you want to get into D, etc. If she isn’t you can quickly cut your losses and move on. If she does admit to being interested in you, it’s great. It’s a positive black swan. And if she tells K, you haven’t really invested much in the relationship so it shouldn’t be hard. Right? So that’s how my mind ran when I thought about this problem yesterday.

I sent her a mail asking her for permission to put blade on her. I explained to her in the mail (i’ll probably blog the mail at a later date – I’m quite proud of my efforts on second thoughts I won’t blog the mail. I think she deserves exclusivity to that masterpiece) that I ever since I met her a few days back I have gotten really interested in her, and am considering the possibility of blading her. That if she is not interested in getting bladed by me, then there is no point in my continuing and wasting both our times and energies, and so she should tell me that right now. I sent this mail to her earlier this evening and I’m still awaiting her reply.

So where does delta hedging fit into this?  It is like the road to Ithaca as this poem mentions. It is about the journey being more enjoyable than the destination. It is about the process of doing something being more enjoyable than the results. It is from the excitement you get just by doing something for the heck of it. These are all what I call as second order effects. They are, in effect, derivatives. First order derivatives of something you are doing, which is effectively the underlying.

As I had mentioned in my previous post, by going ahead with the blading, the only thing I had to lose was my confidence. My form. And if I had gone about blading the conventional way, poking and probing, and making small inroads, the process too would’ve been excruciating, and would’ve added to the pain of the blade not succeeding. So was there a way in which I could hedge out the loss of form and confidence?

I think I’ve been fairly ingenious in going for my long shot. I’m doing something unusual by going about it the unconventional way. Add to this the joy of sitting and drafting that letter to her (yes, it’s a masterpiece). And the possibility of the insights I might gain from this process. And of blogging it, as I am doing now. As soon as I had hit upon this method, i realized that the second order advantages from this were huge. And would easily hedge away any blues that failure in my attempt would bring. It was like getting a put option along with a stock. You knew that your losses were capped.

On the other hand – if she accepted – the returns would be huge. It would be a positive black swan. Capped losses and uncapped gains! Once I had figured this out it was a no brainer that I should go for it. And I have gone for it. A long shot a la Alonso. And I’m waiting for the result. Wish me luck.

Vyaasa and correlated hedges (and louvvu)

Some follow-up over my yesterday’s post on louvvu. This is a little arbit so if you are the serious  types, you needn’t read on.

I’ve been told by my “ex-bladees” that i can become ferocious and scary when I’m putting blade. I don’t konw what it is about me, but it seems i become very intense when putting blade and that immediately puts the woman off and she gets scared of me. This reminds me of Veda Vyaasa. Vichitravirya’s wives were paranoid when he came to them in order to help them prolong the Kuru dynasty. One shut her eyes so tight that the kid was born blind. The second went so pale that the kid was born paler than Nicole Kidman and Andres Iniesta put together. And for the third night, they just decided to send a maid.

The difference between then and now was that back then the women were forced to sleep with Vyaasa just to ensure the continuity of their dynasty. They had no choice. Now, though, if the woomaans see a ferocious blader, they’ll just run away. Ignore. Become hostile. And I don’t think it’s been pre-ordained that I’m going to be instrumental in the prolongation of any dynasty. I think I should just stick to writing stories.

Over the last few days, I’ve been on high amplitude high frequency. Hyperactivity intervowen with extreme NED. I realize I’m a flow person. When things are going fine in general, I’m able to do everything else also quite well. Assume that for hedging purposes I do more than one thing at a time. If something goes bad in one of those, then it pulls down my performance in the rest too. It affects my form in general. It’s something like VVS Laxman losing badly in a game of tennis. And finding the next morning that he can’t hold a cricket bat.

So yeah, given that I’m a bad blader, if I do end up putting blade in the case I described yesterday, I have a feeling it might have a much bigger impact in life. Because the different threads in my life are usually so intervowen, I rarely come across a “nothing to lose” case. I cansay “i have nothing to lose but my form… ” but my form is critical. So I don’t know if I should be willing to lose it.

Ok I’ve written this late night so I might be rambling a bit. But I suppose you get the gist of it. As for the case I described yesterday, I think I’ll go for the long shot. I’ll assume I’m just practising. And go for it. If I do succeed, great. Else, all i lose is my form 😛

Falling in louvvu can be hard on the head

It’s been a long time since I hit on someone. Two years and four months to be precise. Actually, even that is not so precise. You could give it a standard deviation of ten days, for I don’t really know as to where to draw the line on my blading. After that, I haven’t hit on anyone. Promise. I’ve had two fifteen minute crushes (one in a bus and one at a cane chair shop) but didn’t have the opportunity to talk to either of them.

Apart from this, I have quit two jobs. I have been through two periods of joblessness (one of them fairly protracted). Things have been very bad on the family front. I have been through a protracted (over two years) period of low confidence. Putting blade on someone has been the last thing on my mind. It also hasn’t helped that I haven’t met a single new bladable interesting girl in this period of time.

So when I suddenly come across this fairly interesting girl, I don’t really know what to do. One part of me tells me that I’m totally out of practice, and will only bring misery upon myself if I go ahead with the blading. This part tells me that I’m not ready to put blade yet. This reminds me of the pain I went through in my previous blading attempts. This tells me that the girl might already have a boyfriend, and that she lives in a different city.

The other side tells me such opportunities are rare, and I should go for it. This part reminds me of the goalkeeper theory in case she has a boyfriend. When I put forward the question as to the probability of making it given that it’ll be long distance, this part tells me about the Alonso theory (I’ll blog about this on the TS blog in a couple of days). This part tells me that if i keep passing up on half-chances like this, I am likely to die a virgin. And that I must go for it.

Even if i decide to go for it, I don’t know whether to take it to heart or treat it like a long shot. My late father used to talk about his “thread theory”. “Imagine you need to move a mountain, and you have a thread”, he used to say. “You put the thread around the mountain and give it your best shot. If you succeed, you’ve moved a mountain. Else you’ve only lost a thread”. I know that if I don’t put my heart and soul into this, I won’t be able to give it my best shot. On the other, putting heart and soul into this would increase my costs significantly. Unlike Alonso, my best shot isn’t my long shot.

I don’t know if it is rational to be irrational when you are thinking of putting blade. This, once again ties in with the above point as to whether I should put heart and soul into the long shot. Vyshnavi is firm when she tells me that I should be completely rational and never lose my head. Neha has also maintained that the most important decisions in the blading process are taken by the head, and not by the heart.

Then there is the issue of the advisor. Especially for an amateur like me, an advisor in the deal can be of great help. However, sometimes the problem with an advisor is that you should necessarily take his/her opinion on things. If you do something against his/her advice, you’ll get blamed for it. Thankfully, Neha, who was my advisor on my last attempted deal, did a fairly good job. She gave me her space, and gave her expert advice only when asked for. However, the choice of Neha as lead advisor on that deal presented a new set of problems.

My mother considers herself to be an authority on relationships, and got upset that I had selected Neha to advice me on that deal (my mom knew the girl I was blading then). She had made me promise to her that I make her advisor on the next deal. However, getting your mother involved in a deal is never a good idea. What if it doesn’t work out? Won’t she feel bad about it then? Shouldn’t I be telling her about the deal only when it has a good chance of becoming pukka? Or should I just keep the promise.

The blading procedure itself is another story. From my long career, I get the feeling that my half-rude half-arrogant half-sugary (i know it doesn’t add up; i don’t care) doesn’t generally make the right kind of impact. After every breakdown of a deal, I jot down a set of “learnings” in my head and promise to make use of those in my next deal. However, I’m not confident at all of not repeating my earlier mistakes. Also, if my own style hasn’t been working, is it fair to assume someone else’s style just for blading? Won’t I be dishonest to the woman by not showing her my true self? Won’t there be the risk of my mask falling off?

And how should I approach this? The last few times, I made the mistake of getting on to the wrong ladder. i suppose I should somehow get onto the right ladder at an early stage. How do I manage that without appearing despo? It’s ok to tell people “i’m considering the possibility of working for your company” but you’ll get slapped if you say upfront “i’m considering the possibility of marrying you. need to think about it”. Anyway.

I think I should first figure out whether this will be a long shot or whether I should put my full enthu for it. Once that is done, then I can either strategically pass, or unleash, as the case may be. I will probably go for it without a formal advisor this time, just using one or two friends as sounding boards. I’ll probably just stick to my own countrax style – I usually believe in being honest.

Even if I take care of all this, there is this old problem of figuring out what things are like on the other side. The old problem of quantum mechanics will remain. The whole process of “non-destructive testing”. The problem which I’d famously called “Schrodinger’s girlfriend“. I request you to wish me luck on this.

Need stuff

I got a new laptop last weekend. And missed out on a great opportunity on Sunday in Bombay when I met Monkee, Mukka, Madness, etc. to get stuff. Now i’m in gurgaon and don’t know how to get stuff.

I basically need music and movies. Movies of all hues, in all languages (as long as there are subtitles for all non-English, non-Hindi and non-Kannada languages). Music – classic rock for bread and butter. Instrumental carnatic classical. Indian rock (downloaded Avial; too strong). Trance. Anything else you might htink i might like.

As it stands now i wont’ be going out of gurgaon for a month (except for the odd trip to delhi). So stuff should be procurable here. if you know any way in which you have some stuff i may like, and may  be able to give it to me, let me know. put a comment here nad we can figure out.

going through old mails

On sunday morning I leave for Gurgaon. This computer (which I’ve been using since IIMB days) will remain in Bangalore, and my mother will continue to use it. Just remembered that I have all my IIMB mail on this. And thought I should go through the lot. just for the heck of it. a few pertinent observations (I’ll keep putting in bullet points here as i go through the mailbox)

  • It seems in my first term at IIMB, my contact with the outside world (apart from parents) was minimal. Most email is from others at IIMB,and mostly acad related. And I clearly remember I’d stopped using my yahoo id then – the IIMB id was my primary ID
  • For some reason I can’t remember right now, I’d nicknamed Neha Jain as “Exception”. Of course I was to go on to later name her after a Mallu band, and that nickname happened to stick. And I’m still the only person who knows the real real reason why she’s called what she’s called. And I still plan to keep it a secret
  • God Sriram used to mail me fairly regularly back then. It’s kinda surprising now, but back then he seems to be the most frequent non-IIMB mailer to my IIMB ID. And in one mail he writes “Looks like the pertinent obs. are becoming vaguer and vaguer”. And for the uninitiated, it was God who had first come up with the phrase “pertinent observations”
  • My sense of humour back then seems quite weird – at least in hindsight. For example I wrote Ranga, who was studying in UMich saying “how many times have you drowned in Lake Michigan? And is it cold out there?”
  • I found this mail from Manish Chiddarwar which said “Hi, I wrote yesterday’s cluedo mystery. The intention was to have fun and not to hurt anyone’s feelings. I’m sorry if I took it too far. Regards, Manish”. This mail had been sent to Vikram Dua; Neha Jain; Arushi Nehra; Padam Chhabra; Venkataraman Aswath; Karthik S; Dawanchya Anita; Arnab Deb; Amitesh Rattan with a CC to Vinit Mahadevan. For context, please ask Kodhi. And kodhi replied saying “no hard feelings especially considering the fact that having wimpy for a son would make anyone proud”
  • A number of mails from friends back at IITM replying to my mails to them asking them to send proof of some “positions of responsibility” that i held at IITM
  • Muthu Mohon had sent a mail titled “Apex: Finally some progress”
  • Back in 2004, I used to start all my mails with a “hi!!”. somehow find that slightly rude now
  • Rachit Prasad had sent me a mail in early 2005, before he joined IIMB. He introduced himself thus: I’m a dig from Bangalore in IITM Mech who also stays in Banashankari, but in 2nd stage”

Ok I put NED now. Will publish.

Instant D Moments

I don’t know how manyeth time it was. I don’t normally keep count of these things, though given my superior long-term memory, you might expect me to. There have been two earlier instances where this kind of a thing has been documented. There was one more yesterday, which I’m not going to write about since I didn’t think it was too significant. After all it lasted for hardly a minute.

I’m talking about instances where you see a girl and instantly feel the desire to put blade on her. Going by the AIDA framework these are cases where D happens within a couple of seconds of the first A. Where before you know it, there is a strong attraction that you face towards this person. And you are usually so shocked or so stunned that you finally end up doing nothing, and fritter this opportunity away.

Madwoman tells me that the total worldwide supply of such “instant D moments” (as I’ve christened this just now) is limited, and that by enjoying a large number of such moments, and yet doing nothing about it, I’m doing a great disservice to society in general and myself in particular. I don’t know about this. But I’m not sure if this kind of thing can be really manufactured. In case you drive yourself to desperation, “instant I moments” (again going by AIDA) can be manufactured – you get interested in every girl you meet. But instant D moments – I think – cannot be manufactured.

Given that there is some sort of an “extrernal force” which decides upon these moments (note that this statement doesn’t imply that I’m religious), the first thing I wonder is what the distribution of these moments is like, and whether Madwoman’s statement about the same holds. I’m reminded of this case where when brains were being distributed across India, a fixed quantity was allocated to each state, which meant that per capita, the larger states (BIMARU; let’s not count Maharashtra or AP here since there are several states within states there) got shortchanged. Also, there is the accusation that the giver of brains forgot to stir while distributing in Bihar.

That bad digression aside, I once again wonder about the distribution of these moments, and wonder if I’ll feel like that ever again. Given that I’ve let at least three opportunities let go, I don’t know if I’ll get another chance. I dont’ know if i’ll get another chance which I can convert. Over the last few days I’ve been telling myself that I need to ask to get things done. That by not asking for something I’m giving myself a zero chance of getting it. But then, when an Instant D Moment strikes you, you stop being rational and forget the theory you formulated an hour ago.

Such is life

Law of conservation of willpower and other stories

Every time I think about this article in the New York Times, I find myself agreeing more with it. The basic premise of the article is that in the short run, one has a limited “supply” of willpower, and by every activity you do that consumes willpower, you are reducing your ability to do other similar activities. In the longer run, the article goes on to explain, you can increase your willpower over time. This you do by keeping on pushing yourself marginally on the willpower scale.

Back when I first read this article (it was written this April), I used it to justify to myself as to why a normal management consulting job requires heavy amount of willpower. The argument I put forth back then was that in a mgmt consulting job (the kind of stuff done by McKinsey,  A T Kearney, etc) you have to work for long hours, mostly in the presence of members from the client team, and a large amount of work you do is mostly routine, and boring.

Given that the work is mostly boring, it consumes willpower to keep doing it. The long hours mean that you need to keep doing it for a long time, which means a high rate of willpower consumption for a long time – making your daily consumption of willpower really high. Typical work usually involves your exhausting close to your daily supply of willpower. One option would be to periodically recharge your willpower batteries – by indulging in activities that don’t require any willpower, and will also go into removing your frustration with the depleting willpower.

One of the most high-pressure jobs, one that consumes copious amounts of willpower, is trading. Though the hours aren’t too long, the rate of consumption is so high that you easily come close to the daily limit. However, traders usually manage by frequently recharging their willpower batteries. By indulging in activities such as shouting, screaming, throwing down the phone and breaking pencils. This way, they manage to survive until the time they get paid their bonuses (assuming they get a bonus – which is not the case with most traders this year).

The clincher with consulting is that you are usually based at the client’s location. This means that you must behave. And thus, a major source of recharging willpower batteries is gone! Hence, the only way you can survive in that profession is if you have an extremely large daily supply of willpower.

Every time I think about this NYTimes article, I also realize that my willpower is less than average. Though I must say that it’s been steadily increasing, it’s nowhere close to the average level. Initially, in school and college, I managed to get by because the amount of willpower demanded wasn’t very high, and within my limits. Then, I started working, and got exposed.

There was this guy called Yaso in my class at IIT who on one fine day started writing with his left hand (he is naturally righthanded). He explained that he was doing this to build up his willpower. I don’t know how successful his attempt was, but I clearly remember we’d made a hell of a lot of fun of him for this. Maybe I should check back with him. And start implementing some measures for improving long-run willpower that the article talks about.

Life update

Today I complete four months of joblessness. Time seems to have flown quite quickly. Looking back, I don’t really know how I spent these months. I think I read quite a bit. I chilled out a bit. Slept well. Ate well. Hardly travelled. Hardly got bored. One one hand I’m happy that I didn’t get bored for most of these four months. On the other hand, I believe I’ve wasted these months sitting at home.

I spent a considerable amount of time trying to figure out what I wanted to do in life. Professionally. Unprofessionally. There were no easy answers to this question. Every time I thought I had the answer, something would happen which would make me change my answer. I have spanned the entire spectrum just in a matter of days. Thought about some stuff, only to discard them only a day later. Nothing particularly concrete came of of this time.

My joblessness is going to end next Monday, the 25th. I’m moving to Gurgaon. I’m yet to book my tickets, but will probably go there on Sunday. Once I find a house and settle down there, there is a very good chance that my mother will join me there. Bangalore will continue to be my “hometown” but I’m not sure if it’ll still be home. Yes, I’m getting uprooted.

The popular saying is that most people have two careers – they do, on an average, two kinds of jobs in their entire careers. The saying also goes on to say that “successful” people have an average of four different careers. I don’t know what to make of it, but I’ll be starting my fourth job next week (counting one internship also as a job). The new job is “orthogonal” to my last two jobs, which were mutually orthogonal. The new job is slightly in line with my first job (the internship) but the similarity is slight. So, at the age of twenty five, with a total working life of a little more than two years, I’m entering my fourth career. I don’t know if I’ve “achieved success” because of this.

When I was a kid, I used to read Misha. I still remember one cartoon from that. A hedgehog stands under an apple tree, and wants to get the apple. It shakes the tree. A few leaves fall off. It shakes the tree again. A few more leaves fall. The penultimate panel shows the hedgehog shaking the tree really vigorously. The last panel shows the hedgehog covered with leaves from the tree. The fruit is still up there. Based on this, my father used to “do a hedgehog on” me. This treatment involved him catching me by the shoulders and shaking me vigorously back and fourth, well at a faster rate. It used to be fun. This treatment has since been extended to all kids who have cared to visit our house.

For a large part of my childhood, it was common for me to go up to my father and say “make a hedgehog out of me”. And he used to proceed to give me the “hedgehog treatment” that I’ve mentioned above. Finally it seems like all those requests have come to fruition. In the lingo followed by the financial industry, people who work in hedge funds are called ‘hedgehogs’. And starting next Monday, this set is going to include me.

random

I’m hallucinating a lot nowadays. I see things that don’t exist. Hear sounds and words that have never been spoken. Imagine a number of random things. Dream a lot. A hell of a lot. And usually wake up scared. And I can never remember any dreams. In fact, I can never remember what I was thinking of a few moments back.

Very frequently, thoughts literally slip away from my mind. I think I know what I’m thinking, but in a few moments, I don’t have that good an idea and a couple of frantic steps, when I’m trying to get hold of the thought, later, it’s all gone. I don’t remember a thing.

It seems like the awful short term memory is the price that one has to pay for a superior long-term memory.

assignments and studs and fighters and algorithms

For some reason, today I happened to look back at some of my old IIT textbooks, and happened to see this book by Cormen, Leiserson and Rivest on algorithms. I was reminded of the algorithms course at IITM. The prof had just finished his term as HoD and much relieved as he was, he put a lot of enthu into the first half of the course. Every class would start with a “thought for the day” which would be related to what we were going to do. Then, the classes were extremely well structured and there was a regular assignment schedule also.

We were divided into groups of four, and each assignment used to have a “part A” and a “part B”, which carried equal weightage. The former was common to all groups, and would have fairly straightforward stuff – minor variants of what we discussed in class, etc. There would be several problems, and it was frankly a bit of a pain.

Part B gave a separate problem for each group, and this would be usually non-straightforward and required some bit of thinking. There was a good chance that the group never solved it at all, while on the other hand, at times it would hardly take time.

Looking back, I think in more than half the assignments, I ended up doing part B. The problems used to be fairly interesting, and I’d somehow end up solving them before the group even met to discuss the work. And given that all that was required to solve the problem was a moment of inspiration, the process of solving them were, in hindsight, interesting.

One problem was solved when I had taken one hostelmate’s new Bajaj Eliminator for a test ride. Another got solved when I was playing table tennis. Yet another while I was perched on the parapet reading the newspaper.

I also remember this particular incident. In the first assignment, we managed to find a fairly simple and intuitive solution to our part B problem. Now, two guys in my group were topper-types and fighter, and writing a simple and intuitive proof was against their ethos. They said that it would mean that we hadn’t shown much effort, and might result in our getting lesser marks. They finally put enough effort to convert the four line proof into some kind of formal mathematical notation which took four pages. I don’t know if anyone bothered to read that.