On the road from Kingston…

December 22, 2009 at 5:34 am | Posted in Technology, World History, World of Ideas | 2 Comments

On our way back from a night’s stay in Kingston, we tried to stop in at a Canadian Penetentiary Museum in town, but alas, it was closed. As we were turning to leave, a red fox streaked by at a fast run.

Later, we stopped in at the Canadian Aviation Museum (or maybe the Canadian Airforce Museum?). I didn’t expect to be engaged, but ended up finding it fascinating. The planes themselves were the most interesting. They had a full-scale replica of an early flying machine. The wings were of stretched silk, the body of wood, with copper strips and rivets holding the separate pieces of luminous, varnished planks together. It had a single “ski”, instead of dual pontoons, for a water takeoff or landing, and the two wings had tiny little wooden pontoons at the very ends. The seats for the two riders were miniscule, and I cannot imagine even a regular-sized adult fitting into either of them, today.

The device, the gears, the rest of it was all lashed together with an exquisitely crisscrossed mass of thin metal cables. It looked beautiful–a strange mix of organic warmth (the wood, the silk) and rigorous, symmetrical structure. It also looked dauntingly fragile–those cables were thin, and I can only imagine the kinds of stresses they would be subjected to in flight. And nothing–no protective metal covering or any other kind of reinforcement to help alleviate that stress. A few, key snaps of cable and it all would come tumbling down.

Somehow, it felt like it had been pulled from a dreamer’s fancy–and, too, it seemed like a testament to the amazing, fragile wondrousness of our ability to imagine, and plan and then bring those imaginings into the world and to give them solid form.

We envisage dreams and nightmares both, and they come when called. This, at least, was a dream, though the nightmares came too–and were hinted at in other parts of the museum (the boys whose planes were shot down–who were immolated in midair, or lived out years in prison camps).

All this (and more), on the road between Toronto and Kingston.

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New Search Options, New Issues?

May 13, 2009 at 5:02 pm | Posted in Technology, World of Ideas | Leave a comment
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Slashdot | Google Unveils Search Options and Google Squared.

Google has apparently unveiled a couple of interesting new technologies that will allow for slightly different angles of attack in presenting users with search results. The first would seem to help categorize the results in various ways, while the second would compile the information gleaned, rather than the websites themselves.

It’s the latter that concerns me slightly. As someone who writes stuff and puts it “out there” on the web, I cannot help but wonder whether something like that will end up stripping away any final remnant of authorial attribution? Perhaps that notion is becoming somewhat outdated anyway? I don’t know.

The other, larger concern would have to do with context. We all know that information from the internet cannot be trusted. While having a “digest” type compilation of information searched, will make some measure of corroboration a little easier, stripping the info from its original context means that we might be less equipped to assess the biases that are underlying and mediating whatever information we happen to find. E.g. some info about an archeological finding that sounds somewhat plausible, until you look at the rest of the site and find that the author is a creationist.

Of course, people who worry about that will undoubtedly click through and check the sources for reliability or plausibility (in which case, I’m not sure whether the compliation would be of much use?). BUT, those who don’t will now have little to no chance of spotting any holes–as they might, just in passing, when navigating to the actual site. Skimming through the isolated, compiled information would likely mean that the more subtle biases in particular would be obscured.

Of course, this is pretty preliminary. Perhaps they’ve already thought of this and somehow managed to mitigate it via the interface itself. That would be a Good Thing–so let’s hope that’s where they’ve taken it!

It was, like, totally random

May 9, 2009 at 4:06 pm | Posted in World of Ideas | Leave a comment
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Wednesday night, Tom and I went to see a talk by Leonard Mlodinow, from Caltech, whose recent book, The Drunkard’s Walk, is in bookstores and available for purchase.

I haven’t read this one, but based on his talk, I suspect it would cover similar ideas to the book A Random Walk Down Wall Street, by Burton Malkiel, which I read a couple of years ago.

The “drunkard’s walk” refers to the notion that, as with someone really drunk who is wandering aimlessly about, things that are truly random cannot be predicted. Though there are some stretches where there appears to be a pattern to the progress, even these seeming “trends” are, in fact, just the results of cumulative happenstance. As with the monkeys and typewriters notion, sometimes even random processes will line up into apparently coherent and consistent strings. Sometimes even the random hitting of keys will result in recognizable words.

The Malkiel book applied this notion to the stock market for the most part, pointing out that while there was little evidence that attempts at pattern recognition in stock trends were actually borne out as being effective, there is plenty to support the notion that in fact the stock market moves randomly, like the drunkard out on an aimless stroll: he may know his general direction, but it’s difficult to predict, from one step to the next, where he will go. In other words, he felt that things like day trading were little more than guess work. And, while you can see certain overall trends, like the current widespread, cross-sector downturn, it’s impossible to predict when it will turn around, by how much and so on. His conclusion was that mutual funds are to be avoided, and that an investor’s best bet is to just go with an index fund, using something like the S&P 500.

Derivatives might well change things up a bit. A money manager who has figured out a clever way to use those to mitigate risk might be able to come out ahead more consistently–but I only say that because I haven’t read enough about the range and variety of derivatives, how such instruments would work, and whether there’s actually evidence that they do.

All the same, as regards the markets in general, I found the arguments pretty compelling. Mlodinow branched off into a couple of additional facets of the randomness concept, but otherwise covered similar ground. I’d certainly recommend the Malkiel as readable, interesting food for thought. If the Mlodinow is similar (and possibly wider-ranging, rather than focussing on how randomness relates to the stock market), then it might be worth checking out as well. Whether you end up agreeing or not, it’s interesting stuff. If you happen to have read either of these books, but remain a staunch proponent of technical or fundamental analysis, I’d love to hear your arguments against the evidence produced and in favour of your approach!

For the record, I’d actually still do fundamental analysis and likely even do a bit of “tech” analysis too–in that I’d look at the general mood of investors, to try to gauge whether it’s a good time to buy and whether the stock is close to bottoming out, or reaching its peak, before investing. It’s one thing to agree that the day-to-day movements are generally random, and another to throw out the whole idea of a downward or upward trend in markets. As Malkiel points out, if you have a long horizon (i.e. 20-30 years before you retire), then just investing in an index should do you fine. It goes up over the long term, generally performing slightly better than inflation, and so your money will grow.

But keeping aware of trends, wading in when the market bottoms out (or at least is considerably lower, even if it’s not quite at bottom) after a bust, then sniffing the air and selling off stocks after a sustained boom, seems likely to net you an extra chunk of change in the long term, cumulatively speaking. True–you might not catch it at absolute bottom (you may purchase, and then see your investment decline for a while), and you might not sell at the peak (it’s so frustrating to see the selling price climb ever higher after you’ve sold), but in general, you’ll have come out ahead of those who held on through the peak, hoping for ever higher gains, and then panic sold when it fell below the price that the paid for the stock.

For those not familiar with stock stuff, this is what most investment people would consider a conservative, or low-risk strategy. It’s not gonna make you rich overnight, but over time, you should have a tidy nest egg. Since I haven’t seen a lot of evidence (and I’ll admit I haven’t looked a lot) to support the idea that other strategies are actually effective and not just a matter of those randomly generated strings that look like actual patterns, that’s what makes the most sense to me. Other options seem rather a lot games of chance, rather than calculated risks–and I prefer the latter when it comes to my savings.

At any rate, lots of overlap between the two books. Given that, the Perimeter Institute talk was more a refresher on a few of the interesting conceptual aspects of randomness, rather than a mindblowing introduction to concepts never before seen by yours truly.

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