Saturday, October 29

Should you trust your memory?

Dear Son
I keep on scolding you about not following up on important tasks but you are fine with basic tasks like watering the plants or taking care of the dishwasher. So there is obviously something going on in terms of your follow-up.
you have to remember that our lives are much more complex these days son. That's why we have diaries and reminders, we need to pace ourselves, there are competing demands on our time. You have to go to school, study for exams, go with your friends, sleep, work on your projects, make new friends, etc. etc. You cant keep everything in your mind either. Why not? because our memory isnt perfect. God knows mine sucks, so that's why I use my electronic organiser in my blackberry and iPhone so heavily. its a must, we only have a limited amount of time on the earth and deadlines means that we have to be very efficient.
Here's a study which talks about how memory degrades. Mind you, this is only for men, women remember EVERY wrong thing you have done, not just for this life but for all your previous lives, the errors made by your ancestors and your relatives, etc. etc. and then all emerge at very dangerous times.

Should you trust your memory?
Not according to a classic study by Ulric Neisser. Joe Quirk at H+ magazine does a good job of summing up the specifics:
Robert Burton describes an experiment in his book On Being Certain: Believing You Are Right Even When You Are Not, which everyone with a strong opinion should read. Immediately after the Challenger explosion in 1986, the psychologist Ulric Neisser asked 106 students to describe in writing where they were when they heard, who they were with, how they felt, what their first thoughts were. Two-and-a-half years later, the same students were assembled and asked to answer the same question in writing. The new descriptions were compared with the originals. They didn’t match. People had changed facts about where they were, who they were with, what they felt, what they thought. When confronted with the original essays, people were so attached to their new memories they had trouble believing their old ones. In fact, most refused to revise their memories to match the originals written at the time. What struck Burton was the response of one student: “That’s my handwriting, but that’s not what happened.”


Expanding, extending, setting up and pushing forward

Curiously, we don't educate our kids in England in basic personal finance education. I still fail to understand the arguments against it, if there is one thing that people need to know, its personal finances, specially given the issues around too much credit, too little savings, too much debt, its not good. Within LSE SIFE, the chaps are trying to expand the usage of trading futures game, the game which helps to teach kids about economics and investments. Look here for what our cousins over the pond are doing: We should learn from them.

Virginia. When the state of Virginia moved to require financial literacy for its high school students, it was met with some resistance. Some felt that the material could be adequately covered in math and civics courses, while local school boards didn’t appreciate being told what to teach by the state. At this time though, Virginia does have a curriculum for middle and high school students that covers topics like opening an account at a financial institution, balancing a checkbook and filling out a loan application. Additional topics include consumer rights and responsibilities, debt management and understanding contracts.

Pennsylvania. One high school is adding a course, but doesn’t have the funding to hire more staff.

Maryland. Several years ago, a Maryland school board president expressed concern that a single course wouldn’t be enough to fully educate students about financial matters. He also pointed out that the course is relatively expensive at $600,000 — and he feared it wouldn’t be effective.

Missouri. Students in Missouri can take a personal finance class in the tenth, eleventh or twelfth grades. They study budgeting, banking services, and saving and investing. Other themes include credit and consumer skills. Also, goals and decision making as well as career planning are covered.

Wisconsin. The Wisconsin Policy Research Institute is worried that the state’s lack of a requirement for economics and personal finance classes and inadequate number of trained teachers for the subjects will be detrimental to the residents and to Wisconsin’s overall economy.

Tennessee. Students here are expected to learn about money management, income, saving and investing, and credit and spending.

Utah. Utah teaches its students about basic budgeting, investments and even bankruptcy education.

Illinois. This state requires a consumer education course of 50 minutes a day for nine weeks for its high schools. The students are taught about credit scoring, income taxes and the role of consumers.

Georgia. They have an economics course that incorporates personal finance into one of its themes.

Got some major initiatives brewing with LSE SIFE as well, lets see what happens. SIFE Nottingham is also working with us to operationalise the training school with South Notts college with contributions of technology from the IT4CH charity. That’s very promising.

What else has been happening? Well, as I mentioned last week, I am hoping to help this new charity which does sterling work here in UK schools and helps to improve literacy in West Bengal, India. Had some good conversations around how best to structure the board, what do you need in terms of trustees and their skills, etc. etc. I also cautioned about operating in India, its not a trivial exercise and India is scattered with wastelands of foreign charities who came to grief. For example, see here. Also see the original article on the Bill Gates imbroglio. If such a brilliantly managed and funded charity can come to grief, then smaller ones are far too easily screwed up.

The response to us asking for more women trustees for IT4CH has been fantabulous, we now have 3 absolutely brilliant ladies who are interested in helping out with exciting projects. Cant wait till the trustee meeting on the 9th of November to introduce them to the rest of the gang and take this forward.

We also met with somebody from my old alma mater, Manchester Business School and figured out some good ways to take the alumni bit ahead with the firm.

Much to do, so little time…

Friday, October 28

Female Genital Mutilation


Just saw this report in the NYT which prompted this email, son.

You might find it interesting. There are many customs in the world which a liberal educated man like you will find amazing. Footbinding, Female Genital Mutilation, Dowry, Sati, they were usually all societal crimes committed against women by men. The reasons are complex and the history behind these crimes is even more convoluted. But there are good signs that this is being removed as more education happens.

Here is one example of how a Senegalese village stopped it.

Here's another example of what's happening in Egypt.

In Egypt, some people think this is religiously mandated, which is extraordinary. So you can imagine how tough this fight is going to be. Not many people are raising their voices against this either, either they are lazy or think its religiously mandated or scared to take on the religious or male dominated society or just not concerned about it.

But this fight can be won and its people like you and others who can do something about it, raising voices, teaching people, etc. etc. The crucial thing is that it has to be a collective pledge. Getting a small but significant group together to fight against horrible things like this works. It doesnt work when governments force people, it has to come from inside.

I wrote about the greatest indians once, and I recognised Raja Ram Mohan Roy as one of the greatest Indians who helped erradicate Sati and founded the Brahmo Samaj. Here's his background.

So it can be done, Son, just needs dedication and passion and a whole heap of patience.

Thursday, October 27

Nice quote

Nice quote from a technical presenter that I heard today son.

Any intelligent fool can make things bigger, more complex and more violent. it takes a touch of genius and a lot of courage to move in the opposite direction. Einstein

You should read up on Occam’s razor. You are intelligent and you aint no fool, but there are several things to this quote. It is true, just making things bigger or more complex is very easy. But to make things better or smaller, less complex and more simple, etc. is difficult. When you are dealing with organisations or projects or work, make sure things remain simple, sweat the details and don't run things to make them big just because big is good. No, its not.

Wednesday, October 26

Black schoolboys underachieving because 'academic success is seen as gay'

I read this with horror. But first let me quote

Adolph Cameron, head of the Jamaican Teachers' Association, said many boys perform poorly because their fear that appearing studious undermines their masculinity.

He claimed that many youngsters turn to a so-called “hustle culture” to make money, rather than chasing careers built on academic achievement and hard work.

Mr Cameron warned that the attitude was affecting the academic standards of Afro-Caribbean boys both in Jamaica and in Britain.

They are one of England's worst-performing ethnic groups in schools. Last year just 40 per cent of Afro-Caribbean boys achieved five good GCSEs including English and maths, compared with the national average of 58.5 per cent.

Mr Cameron told the BBC: "That notion of masculinity says that if as a male you aspire to perform highly it means you are feminine, even to the extent of saying you are gay.

Coming from a culture and upbringing that venerates education, this kind of thinking just bewilders me. How can people throw away so much of their lives to hustle? Incomprehensible. And is this connected to racism? this is just weird but doesnt sound like it, where would racism be in a black country like Jamaica?

Tuesday, October 25

Eggs Eggs and more eggs

I love eggs, I make eggs in zillions of different ways. And Jacques Pepin is as close you can get to an Egg Guru as you can. I will be making this type of omelette tomorrow.

So had the eggs, a bit of thyme, parsley, coriander, salt, pepper


And then beat the heck out of it.



In it goes in a buttered pan.


And then rolled up.

But I am afraid the family decision was that the Indian omelettes with onions, a bit of chilli, coriander and and and is much better, this French omelette business isn't going to be made again, I am afraid Sad smile

but good to report on failures as well as fun, eh?

Monday, October 24

My investor personality test

Dear Son

One of the key things to being an investor is to know your own mind and what makes you tick. Its only when you have figured out what you are and what makes you tick, that you can be a better investor. You realise what are your failings and how to protect yourself from mistakes you make because of you. One way is to ask the women in your life (at least for me, the women in my life are ever ready and have a very long list of problems they have with me), another way is to do surveys. Here’s an example of one which I did, try it out here. My results if you wanted to compare, are here:

Investor Personality Test

Very High


Conscientiousness : Very High

Emotionality : Very Low

Extraversion : Very High

Openness : Very High

Agreeableness : High


Confidence Biases

Overconfidence : High

Over-Optimism : High

Risk-taking Biases

Risk Aversion : Very Low

Emotional Vulnerability : Very Low

Cutting winners short : Below Average


Self-discipline : Very High

Immediate Gratification : Below Average

Excitement-seeking : High


Intellectualism : Very High


Trend-following : Very High

Just plonking in one of the detailed reports, rest are boring.


Conscientiousness Factor: Your result is Very High.

  • Conscientiousness describes your relative ability to plan and organize towards achieving goals and to exercise self-control.
  • You scored in the HIGH range for conscientiousness. Intelligent activity involves contemplation of long-range goals, organizing and planning routes to these goals, and persisting toward one's goals in the face of short-lived impulses to the contrary. You can achieve high levels of success through purposeful planning and persistence. You are likely to be positively regarded by others as intelligent and reliable. On the down side, some people may see you as rigid or perfectionistic.


Emotionality Factor: Your result is Very Low.

  • Emotionality is characterized by stress-sensitivity and more frequent experiences of negative emotions than others.
  • You scored in the LOW range on emotionality. You are relatively more calm, emotionally stable, and free from persistent negative feelings when compared to high scorers. Freedom from negative feelings does not mean that you experience more positive feelings. You may be reckless in dangerous situations and take more risks than others (sometimes without knowing that you are doing so). In general you are probably secure, hardy, and relaxed even under stressful conditions.


Extraversion Factor: Your result is Very High.

  • Extraversion is characterized by a desire to socialize and a tendency to optimism. Extraverts derive energy from interactions with others, while introverts' interests are fueled by introspection.
  • You scored in the HIGH range on extraversion. You probably enjoy being with people, are full of energy, and often experience positive emotions. In groups you are likely to talk, assert yourself, and draw attention. In general you are outgoing, active, and joyful.


Openness Factor: Your result is Very High.

  • Openness to new experiences describes a willingness to experiment with tradition, to seek out new experiences, and to think broadly and abstractly.
  • You scored in the HIGH range on openness. You are intellectually curious and tend to be, compared to closed people, more aware of your feelings. You probably tend to think and act in individualistic and nonconforming ways. Open and closed styles of thinking are useful in different environments. An open intellectual style may serve you well as a psychologist, professor or investor. Research has shown that closed thinking is related to superior job performance in police work, sales, service occupations, and short-term trading.


Agreeableness Factor: Your result is High.

  • Agreeableness reflects a concern with cooperation and social harmony.
  • You scored HIGH in the range for Agreeableness. You generally value getting along with others. You are therefore more likely to be considerate, helpful, and willing to compromise. You are also likely to believe that people are basically decent and trustworthy. On the downside, agreeableness can be a handicap when making tough or rapid independent decisions. Agreeableness creates an aura of likability and often leads to popularity, and thus is common among managers.

Sunday, October 23

Decisions and Info-Gaps: (Even) God is a Satisficer

Dear Son
Now this is an interesting article. Its interesting for me because this is a bit of a confusing element. On one hand, people suggest that we should do the best in everything we do and then this comes up which roughly translates to, do the minimum required to achieve a goal. Looks like its genetic and natural to satisfice. In terms of animals, in yesterday's dinosaur tv series on bbc1, it said that the dinosaurs who died out were the big ones, anything over 25 kilos were dead. So smaller animals, who did enough to survive, survived, but the large ones, which maximised energy intake, died. I am trying to control my weight, i can eat more but by trying to eat less, hopefully the weight will stay off, but not really working to that extent.
Another great quote is, "perfect is the enemy of good", you might end up polishing a document or something to the "nth" degree and it might not be necessary. Then on the other hand, you have the comments from Steve Jobs about everything needs to be just perfect. So the way I think is, in some things, you need to be absolutely perfect. So in my job, I try to be absolutely perfect and do the best possible. In terms of say personal appearance, say my hair cut? I dont care, as long as its out of my eyes and ears, I am ok, dont give a toss about what I look like. Everybody has to end up making this choice, but very few people consiously make this choice in terms of deciding what / how much effort to put into what. If you do that, then you will know how to make the judgement call about how much to push at what area in your life.

Decisions and Info-Gaps: (Even) God is a Satisficer

To ‘satisfice’ means “To decide on and pursue a course of action that will satisfy the minimum requirements necessary to achieve a particular goal.” (Oxford English Dictionary). Herbert Simon (1978 Nobel Prize in Economics) was the first to use the term in this technical sense, which is an old alteration of the ordinary English word “satisfy”. Simon wrote (Psychological Review, 63(2), 129-138 (1956)) “Evidently, organisms adapt well enough to ‘satisfice’; they do not, in general, ‘optimize’.” Agents satisfice, according to Simon, due to limitation of their information, understanding, and cognitive or computational ability. These limitations, which Simon called “bounded rationality”, force agents to look for solutions which are good enough, though not necessarily optimal. The optimum may exist but it cannot be known by the resource- and information-limited agent.

There is a deep psychological motivation for satisficing, as Barry Schwartz discusses in Paradox of Choice: Why More Is Less. “When people have no choice, life is almost unbearable.” But as the number and variety of choices grows, the challenge of deciding “no longer liberates, but debilitates. It might even be said to tyrannize.” (p.2) “It is maximizers who suffer most in a culture that provides too many choices” (p.225) because their expectations cannot be met, they regret missed opportunities, worry about social comparison, and so on. Maximizers may acquire or achieve more than satisficers, but satisficers will tend to be happier.

Psychology is not the only realm in which satisficing finds its roots. Satisficing - as a decision strategy - has systemic or structural advantages that suggest its prevalence even in situations where the complexity of the human psyche is irrelevant. We will discuss an example from the behavior of animals.

Several years ago an ecological colleague of mine at the Technion, Prof. Yohay Carmel, posed the following question: Why do foraging animals move from one feeding site to another earlier than would seem to be suggested by strategies aimed at maximizing caloric intake? Of course, animals have many goals in addition to foraging. They must keep warm (or cool), evade predators, rest, reproduce, and so on. Many mathematical models of foraging by animals attempt to predict “patch residence times” (PRTs): how long the animal stays at one feeding patch before moving to the next one. A common conclusion is that patch residence times are over-predicted when the model assumes that the animal tries to maximize caloric intake. Models do exist which “patch up” the PRT paradox, but the quandary still exists.

Yohay and I wrote a paper in which we explored a satisficing - rather than maximizing - model for patch residence time. Here’s the idea. The animal needs a critical amount of energy to survive until the next foraging session. More food might be nice, but it’s not necessary for survival. The animal’s foraging strategy must maximize the confidence in achieving the critical caloric intake. So maximization is taking place, but not maximization of the substantive “good” (calories) but rather maximization of the confidence (or reliability, or likelihood, but these are more technical terms) of meeting the survival requirement. We developed a very simple foraging model based on info-gap theory. The model predicts that PRTs for a large number of species - including invertebrates, birds and mammals - tended to be shorter (and thus more realistic) than predicted by energy-maximizing models.

This conclusion - that satisficing predicts observed foraging times better than maximizing - is tentative and preliminary (like most scientific conclusions). Nonetheless, it seems to hold a grain of truth, and it suggests an interesting idea. Consider the following syllogism.

1. Evolution selects those traits that enhance the chance of survival.

2. Animals seem to have evolved strategies for foraging which satisfice (rather than maximize) the energy intake.

3. Hence satisficing seems to be competitively advantageous. Satisficing seems to be a better bet than maximizing.

Unlike my psychologist colleague Barry Schwartz, we are not talking about happiness or emotional satisfaction. We’re talking about survival of dung flies or blue jays. It seems that aiming to do good enough, but not necessarily the best possible, is the way the world is made.

And this brings me to the suggestion that (even) God is a satisficer. The word “good” appears quite early in the Bible: in the 4th verse of the 1st chapter of Genesis, the very first book: “And God saw the light [that had just been created] that it was good…”. At this point, when the world is just emerging out of tohu v’vohu (chaos), we should probably understand the word “good” as a binary category, as distinct from “bad” or “chaos”. The meaning of “good” is subsequently refined through examples in the coming verses. God creates dry land and oceans and sees that it is good (1:10). Grass and fruit trees are seen to be good (1:12). The sun and moon are good (1:16-18). Swarming sea creatures, birds, and beasts are good (1:20-21, 25).

And now comes a real innovation. God reviews the entire creation and sees that it is very good (1:31). It turns out that goodness comes in degrees; it’s not simply binary: good or bad. “Good” requires judgment; ethics is born. But what particularly interests me here is that God’s handiwork isn’t excellent. Shouldn’t we expect the very best? I’ll leave this question to the theologians, but it seems to me that God is a satisficer.