Anatomy of a bubble. 1. People are not interested2. People ask for advice on getting into the market. 3. People give experienced traders advice on trading.4. Crash.I’d say we are between (2) and (3) at this stage.
the average trader
The average retail trader underperforms the market by 4-5% per annum before costs. Far worse than this after costs. Yes they have negative skill.The average professional fund manager outperforms the market by less than 1% before the costs they charge to the punters. After costs they underperform. The average professional fund manager works very hard and has studied finance for years. My point is you need to do a lot better than average to win.
To be of LW standard this essay should also steelman the opposing argument and assess it fairly Ie that Censorship of words can cause harm.
I found that often certifiers lack teeth and are more of a PR exercise that genuine quality control. Sometimes they are the real thing, sometimes not. A recent example would be various forms of “organic” certification which are highly variable in validity. You need to look at each case. One question to ask is how many people were denied certification or had certification withdrawn in the last 12 months? How many lawyers were actually struck off by the bar association and what did they have to do to get struck off?
An excellent and thoughtful post IMHO.
I would add the dimension of hidden or invisible quality.Sometimes it is hard to determine or effectively specify the quality of an outsourced product or service. For example, if I go to a restaurant, I don’t know if the chef washed his hands or has a cold or other illness. I don’t know if they use cheap/semi-rancid seed oils or actually extra-virgin olive oil as claimed. Friends who worked in expensive restaurants claim that such cost-cutting is common, and it is almost invisible. My experience is that often when quality is not immediately visible to the customer, corners are cut.Another example of this is when buying food and supplements. Often I have bought food that is supposedly free of additives, only to have a bad reaction, due to additives that were in fact present. Minced beef often contains sulfites which is illegal but often done. These preservatives are then used to disguise old product. One vitamin C tablet supposedly contained only natural colors and flavors and affected me quite badly. I later found out that it contained coal tar base dies and cyclamates and saccharine.[as background I have a defective gene for the breakdown of histamines (defective enzyme is diamine oxidase) so I am sensitive to histamines in diet and also to the very common chemicals that inhibit the breakdown of histamines or that trigger its release from the mast cells].A friend of mine went to a presentation for a coffee shop chain. They boasted that they could get coffee for $1.50AUD/kg. “How can you get good coffee for that price?” my friend asked. “You can’t—and that’s the secret!!! - they can’t tell the difference, especially if you add some flavours”.Somewhat alluded to is the issue of operational entanglement. Providers will often attempt to “lock you in” so that you end up spending more than you planned because it is difficult to extract yourself. I am in this situation at present where a lawyer has set things up so that he can charge $$$s for work I could do, but it is difficult to get him out of the picture.
I think it’s a great book and anyone interested in the brain at a well informed layperson level would probably enjoy it and learn a lot from it.Hawkins makes a good case for a common cortical algorithm—the studies involving ferrets whose visual nerves were connected to the audio centres and who learned to see are one compelling piece of evidence. He makes some plausible arguments that he has identified one key part of the algorithm—hierarchical predictive models—and he relates it in some detail to cortical micro-architecture. It is also quite interesting how motor control can be seen as a form of predictive algorithm (though frustratingly this is left at the hand-waving level and I found it surprisingly hard to convert this insight into code!). His key insight is that we learn by recognizing temporal patterns, and that the temporal nature of our learning is central. and I suspect this has a lot of truth to it and remains under-appreciated.There are clear gaps that he kind of glosses over e.g. how neuronal networks produce higher level mental processes like logical thought. So it is not perfect and is not a complete model of the brain. I would definitely read his new book when it comes out.
I don’t think the problem in this case is one of excessively high standards. I think the problem is that our political system selects people who are good, talkers, who can spin a narrative, who can and do lie convincingly. After 50 years following politics my heuristic is to ignore what politicians say and watch only their actions. I find that what they say is generally devoid of useful information. The only conclusion one can draw is that they want you to believe what they are saying. Track record is the only useful guide to their likely future actions.
then the risk for young and healthy people remains low
Don’t confuse risk of death with risk overall. I personally know several young people who suffered months of debilitation, in some cases still feeling sick months later. From some limited studies this appears to be common, and permanent damage appears to be not uncommon including damage to testes, brain/memory etc. At best we do not know the long term effects. Tell someone suffering from shingles (which was eventually found to be a result of prior chicken pox infection) that chicken pox is a “mild” condition.
One point not noted anywhere as far as I can see is that, by allowing the pandemic to spread to millions of people, the risk of a more dangerous or virulent strain appearing increased enormously.If the pandemic had been kept to relatively small numbers, as in Taiwan, New Zealand, Australia, Vietnam, Thailand, (China if you believe their statistics on this, unlike all their other statistics are correct) etc. this new more infective strain would likely never have appeared.
Does that [cutting cases by 50% per week] sound like something any Western country could possibly accomplish from here?
Yes. Have a look at the state of Victoria in Australia, which went from close to 700 cases a day in early August to zero in about 8 weeks. https://www.covid19data.com.au/victoriaI sympathise with people in countries run by incompetent buffoons (i.e. most of Europe and the Americas) but it is not inevitable.Overall a terrific post—your point about the need to act before there is certainty is solid gold.
I am not sure you actually justified your claim, that OR follows from the laws of probability with no empirical input. Reading your arguments carefully you seem to have snuck in some prior knowledge about the universe (that age does not matter much to the weight of cows after a certain age for example). There is a big mystery to me as to why the universe is so simple e.g. the laws of physics can be written out (though not explained) in a few pages. Why are they so small, not to mention finite, not to mention not uncountable...Marcus Hutter’s AIXI has a prior that makes simple worlds more likely. See also https://en.wikipedia.org/wiki/Solomonoff%27s_theory_of_inductive_inference
Democracies seem to select leaders who are good talkers, but the selectivity for actual competence looks to be very weak. This is not a surprise; it has been commented on for millennia. Have a look at how ancient Athens got into the disastrous invasion of Sicily which ultimately led to its defeat by Sparta for example. Having done polling and talked to average voters it seems to me a miracle that sometimes half-decent leaders gets up. So an incompetent response is expected.Some things not often mentioned with Taiwan’s response to the coronavirus 2 pandemic.1. They are not a member of the WHO and thus were not misled by their very bad advice early.2. They had experienced SARS1 and thus did not believe the CCP’s misrepresentations of the situation this time around. 3. Their government seems to be trusted by the population as to competence and as to having good intentions. By contrast from my times in the US, the populace seem to regard the government as a bunch of lying thieves. This makes it much easier for Taiwan to get cooperation. 4. Quarantine of arrivals was strictly and competently enforced. 5. Face masks were made mandatory. While annoying to wear, they do not prevent most business and commercial activities.6. Checking of people at entrances to work, shops, transport, schools etc. Those with suspicious symptoms or a high temperature are sent home. Many have pointed out, irrelevantly, that this is not an accurate test for coronavirus. But it excludes a high percentage of the infected and, with face masks, helps get the R0 infectivity under 1.7. Some high risk establishments like “hostess bars” were closed, though most businesses remained open and the economy only fell slightly. 8, Contact tracing was indeed well done and helpful but modeling suggests it is not enough on its own. You need to get infectivity down and keep from importing cases as much as possible.
The academic research (e.g. Santa Fe institute work referenced in Jarrod Wilcox’s “Investing by the Numbers”, an excellent book for LessWrong-ish people), suggests that while truly passive indexers do not cause problems directly, they can cause problems in other ways. They tend to amplify the effects of momentum players and price insensitive growth-oriented traders for example. In sufficient numbers they can therefore indirectly destabilize the market.When they are not really indexers but picking sectors to “index” in, they certainly can add to the chaos.
Throughout the last decade (or last 15 years, really), FAANG stocks (and QQQ) have consistently overperformed the market/index funds
True but you conveniently cut off the dot com crash, in which the NASDAQ QQQ crashed from 107 to 23 (79%) while the S&P500 only fell about 43%. In finance beware the selective “well chosen” example. From the 2000 top that is a return of only about 5% per annum compound.
markets are likely quite robust even to large amounts of so-called ‘uniformed flow’
I don’t agree and would be interested in evidence for this. Have a look at what happened in 1999-2000 and see if you still think this. Investors moved en masse into hot tech funds, many “index” funds. The fund managers were to a large degree helpless as they had to follow fund mandates. Fund managers who stood aside as the madness grew lost funds under management rapidly.”Indexing” is not actually indexing if you don’t own the whole market. That would include stocks, bonds and real estate in proportion to market value. You could start with an all world index fund like this https://investor.vanguard.com/etf/profile/vt and add an international fond fund and some get exposure to real estate all over the world (most REITs are more bond-like than real estate like).If you are, say, in the S&P 500 only or over-weighted to the NASDAQ you are not indexing.
It would be helpful if you would explain what you mean by an “evaluation system”. You seem to regard it as obvious. You provide no definition. You give a few examples. But do you really want people to have to spend time to reverse engineer what you are talking about.When people put terms in quotes when not quoting someone, as you do, it usually signifies the use of those words in some non-standard manner. The fact that you put terms in quotes thus suggests to me that you are using the words in some unspecified non-standard manner.I can guess what you might mean and I might even feel confident I am right. And I might later find out that you intended some other meaning and I should have known what you mean.The first rule of any essay is to be clear what you are talking about. It is not a sin to state the “obvious”. Karl Popper was notorious for this—being unclear and then deriding people for misconstruing him. See his later papers and books.
Key questions for me. 1. Under what assumptions is the CLT valid? There seem to be many real world situations where it is not valid. E.g. finite variance is one such assumption. 2. How easily can one check that the assumptions are valid in a given case? The very existence f fat tails can make it hard to notice that there are fat tails and easy to assume that tails are not fat.2. Even when valid, how fast does the ensemble distribution converge, in particular how fast does the “zone of normality” spread? Even when CLT applies to the mean of the distribution it may not apply to the far tails for a long time.
Specifically on the Pfizer press release. Due to various medical conditions I have been following medical research, press releases, government policy etc for many decades and have read cubic meters of medical research papers, textbooks, statistics texts etc.TL;DR and one thing I have learned : A press release from a pharmaceutical company saying <thing> is very weak evidence that <thing> is true.In any case realistically a vaccine rollout is extremely unlikely to be done before the end of 2021. This is a best case scenario. And we do not know the extent of the economic damage.
For the benefit of others reading this, in Shankar’s book referenced below, this is said to not be a full symmetry i.e. not always valid.There is no reason to think that the evolution of the conjugate function will be the same as the evolution of the original function. Also there is no time-reversed Copenhagen measurement process in the theory which he implicitly requires.Think about a massive object like a planet moving from L to R. It is massive so quantum effects can be ignored. It is clearly not true that the planet would be measured as being in the same place 10 minutes ago and 10 minutes hence. So the statement “All possible futures are also possible pasts” is wrong.
I suppose I would test out the claim by getting it to mine a few hundred $million of bitcoin for me.Then crack all the interesting crypto data that is floating around. Then brute force search for proofs/solutions of all the big problems such as Riemann Hypothesis, factoring etc. Try all texts shorter than say 100 terabytes and see if they solved the problem.Work out the implications of all the human genes by calculating out how the human body works. This would include things like solving protein folding.Find the best/shortest algorithm for all the AI/ML challenges that delivers near perfect results. Then simulate the body with various chemical compounds added to cure cancer, infections etc. Design vaccine + cure for coronavirusV2 and also machines to make them.I guess you could create a model of the brain and then run all sorts of experiments on the simulation to work out how it works. Simulate atoms and molecules and brute force ways to build things that would build arbitrary nanotech engines.At what point would you get worried about AI safety?