bustermcleod: 8:36pm Day 4 of fast, watching There Will Be Blood as substitute for food and energy. http://tinyurl.com/6344gt

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Since I'm taking the next 5 days to consume nothing but water, apple juice, and some stomach-churning supplements, I'll probably have more time to write stuff out. Lucky us all. Funny how not drinking makes days last about 3 times longer. Part of it is that sugar, alcohol and caffeine seem to speed up time, but another part of it is that without the opportunities to sit down for a good meal or have a drink with friends, one is forced to find other ways to pass the time. Yesterday, when I was in the "Day 3 grumpy phase" of fasting (but still eating a little bit) I did errands and napped and tried not to try to pick fights for no reason. Yeah, yesterday sucked.

Today is much better. I'm at McLeod and apparently a commercial is being filmed here in about an hour. I already feel more balanced and can feel energy coming from natural sources rather than artificial sources like sugar, caffeine and alcohol. This is my favorite part of fasting. No, actually, my favorite part is when the white noise in my head dies down. That part will probably come tomorrow, but right before the white noise goes away, it becomes actual noise. I can hear all the buzzing in my head right now as actual voices talking over each other.

So much is going on right now. Wedding planning, McLeod stuff, Robot Co-op stuff, financial stuff, honeymoon stuff, health stuff, house stuff, and, as stuff builds up it inevitably gets my brain working overtime trying to juggle it all. While juggling my brain tries to find common denominators to simplify it all. Having too much to do tends to paralyze me, and in order to un-paralyze myself I have to come up with new strategies to get more done with less time and effort. It's difficult work. And my fundamental purpose in life is to find difficult work that I enjoy, and people that I enjoy doing that difficult work with.

Kellianne's leaving for New York tomorrow for her every-six-weeks visit, and her last visit before our wedding (28 days!) and 3 weeks in Italy (omg). And then we all vote. And then we all validate our optimism and pessimism. And then we eat turkey, and then we give presents, and then we drink champagne, and then it's 2009!

I am glad that I have a chance to slow down for a bit this week.

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Buster M. @ Dos Caminos ! 100 kinds of tequila?
Multiple Locations
New York, NY

Buster M. @ Lombardi's ! With McIntire
32 Spring St
New York, NY 10012

Buster McLeod added an entry about create and maintain a blog about mutual improvement:

http://mutualimprovement.com

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Survivorship Bias describes the flaw of an observer exaggerating the "track record" of events by failing to understand the importance of randomness. It is a particular type of selection bias, where "failures" are excluded without the observer taking notice. The term is often used in financial discussions, and thus has bearing on this month's theme, but understanding the import of survivorship bias can help with many aspects of life.

To increase our understanding of the concept of survivorship bias let's start with a primer on randomness. One of the best books you could read as a guide on either topic is Nassim Nicholas Taleb's book, Fooled by Randomness. Taleb asks us to consider the proverbial room full of monkeys banging away on sturdy typewriters. If the number of monkeys was infinite, there is a virtual certainty that one will eventually bang out a perfect copy of the Illiad. Now that we have found this hero among monkeys, Taleb asks, would anyone be willing to invest their life savings on a bet that this same monkey would write the Odyssey next? Taleb's thought experiment points us toward the relevant financial question, how much can past performance (here the typing of the Illiad) be relevant in forecasting future performance?

What is particularly interesting when considering problems of statistical inference is that a little knowledge of probability is perhaps more dangerous than none at all. We know that it is very unlikely for someone to consistently perform well without doing something right. It seems like commonsense to give past performance its due. But what we have to keep track of, Taleb points out, is the role of randomness in the person's profession and the "number of monkeys" in operation. Sample size matters. If the Illiad writing monkey was one of five monkeys in the experiment, his achievement is astounding. If there are one billion to the power of one billion monkeys engaged, it becomes clearer that the output is the result of luck. You need to count the monkeys.

When studies of money managers are conducted, the analysis often only looks at successful monkeys. That is because the managers who perform below the market go out of business or have their funds shut down. What we are left with is an example of "survivorship bias": a too rosy view of past performance that is the result of failing to ask "what happened to the failures?"

How does this impact us on a more daily basis? Taleb asks us to consider the plight of Marc, a Harvard educated savant who went on to attend Yale Law School. He makes $500,000 in a good year, lives in a Manhattan Co-op and has a house in the country. Not only is Marc haggard from work and stress, but in the eyes of his wife, he's a failure. That's because her peer group has become the neighbor's in her upscale co-op and the parents at the exclusive private school where they send their kids. From a materialistic standpoint, they come in toward the bottom compared with this exclusive peer group. Didn't Marc get 1600 on his SATs? Isn't he as smart as the Wilson's next door, who have millions and don't even deign to notice Marc in the halls?

The problem here is Marc's wife is comparing him to some of the most successful people in the world. Were she to track his success against his high school cohort, he'd be in the top 99.5% of income earners. Compared even to his Harvard classmates, he'd be in the top 90%. Compared to his graduating class at Yale, he'd be in the top 60%. But Marc's wife is using the wrong distribution to derive a rank -- he might feel like a failure when his savings amounts to so little compared to the successful CEOs who live in their building and that might be a very real emotional cost to survivorship bias -- but by any reasonable measure, Marc is a success. Why does it feel like failure? Because Marc and his wife have chosen to live in a place that excludes failure. Manhattan co-op apartments are for survivors.

Another example of misapprehending survivorship bias comes from the popular book "The Millionaire Next Door". This book points out the paradoxical point that many of America's millionaires work mundane professions and live ho-hum lives. They owe their wealth, the authors claim, to diligent accumulation. The problem with this analysis however, is that it exclude all the diligent accumulators who failed to become millionaires. The authors failed to count the monkeys.

At the root of these problems, is a folk theory we seem to have about money and performance. We want to believe that they are related. What randomness makes us consider, is that most financial success is not due to a track record of results, but rather, luck.

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Crocodile Café @ 2200 2nd Ave

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At the crocodile

El Greco @ 219 Broadway

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