January 2009 – Pertinent Observations

On Large and Small Books

During my last binge at Landmark, I saw a book which I thought I’d like. It was priced at some six hundred rupees – a full fifty percent premium over what I’m usually willing to pay for a book – and was quite thick. My first thought was “ok on a pages-per-rupee basis, this seems to be doing quite well so I should buy it”. Then I had second thoughts.

The question is – should you look at the size of a book as an advantage or as a disadvantage? I think the normal viewpoint (as reflected by my instinct) treats pages as assets. There might be historical backing for this. When books were read for timepass, the amount of value (the time that could be passed) that could be gleaned from the book would be proportional to the number of pages in the book. If the language was difficult to read, then even better – for now it allows one to pass even more time reading the book.

However, when one comes to “funda books”, this argument fails spectacularly. When you read funda books, you don’t read to pass time. You read books in order to get fundaes. And once this happens, volume becomes not a benefit but a cost. When you are reading a book for the fundaes, then you are effectively paying two costs – one is the rupee cost of the book and the other is the time COST. The time that you spend reading the book now becomes a cost. And when time is a cost, then more pages need not be a benefit.

Unfortunately, when you are at the bookstore trying to make a decision about whether to buy a book, there is no way you can figure out how much of fundaes the book is likely to offer. It would have helped if you have read some reviews, which will allow you to make an informed decision. If you haven’t, then hard luck. Now, if you have no clue about that book that you have in your hand, and you need to make a decision on whether to buy it, then I won’t blame you for making your decision based on the thickness.

The unfortunate consequence of this is useless padding up of books. Authors and publishers know that a large section of the readers are likely to judge books based on their size. And they make things voluminous. They take 40 pages to tell stories that could’ve been written in 4. They end up saying the same thing time and again, just to increase the number of pages. And overall, end up boring the reader and lowering the net value added by their book.

So you have ideas which could have been communicated in a few blog posts developing into a book – after all, no one wouuld be willing to pay the same amount of money for a 20 page book as they would for a 200 page book right? even if it were to offer comparable amount of fundaes?

I don’t really know if there is a simple solution to this problem. Solving this would involve effecting a major shift in consumer behaviour. It is unlikely that blogging and online publication would become profitable, else we might have expected the disruption to come from there. Still, you can never say. All we can do is to wait and hope. And read reviews before choosing books.

PS: online purchase of books (via Amazon, etc.) might help mitigate this problem a little since you don’t really feel a book when you decide to buy it, and you have reviews available instantly. Nevertheless, I’m sure most buyers would be subsconsciously using the “number of pages” field while making their purchase decision.

PS2: I should make my blog posts less verbose

IPL Structuring

I remember that this time, last year, I was eagerly looking forward to the IPL auctions. It also happened to be a time when I was actively looking out for a new job (i wasn’t going to find one till about six months later). And I was secretly hoping that one of the IPL franchises would employ me as a game theory and structuring consultant in order to help them out with the player auctions. While I tracked it online, I imagined myself sitting in the bidding room at the Trident, showing my excel sheet to the franchise owner and captain, and watch Preity Zinta enhance her Mata Amrita Index.

It was also a period of extreme NED, due to which i didn’t bother looking out actively to try consult for an IPL franchise. It was a period of low confidence, so I assumed I wasn’t good enough for this kind of work, and didnt’ bother doing anything in this direction. Frankly, I didn’t have a clue how to proceed, else i might have put SOME effort at least. A few months later, when the IPL was well underway, I figured out that one of my cousins is a big shot with Bangalore Royal Challengers, and he was among the people at the Trident who picked the Test XI to represent BRC. I wanted to kick myself, but for some reason I didn’t.

Currently, I’m comfortably employed, and so far have been happy with this job. Else I might have wanted to throw my hat into the ring. Once again, IPL team formation season is on. A few transfers have gone through already, and a few are currently in limbo. Bidding will happen next season for people who are joining the league this year. It promises to be an interesting time. And so far I’ve been deeply unhappy with the way the franchises are going about their business.

I’m especially upset with BRC, and have half a mind to call up my cousin who consults for them and give him a piece of my mind. How the hell could they let go of Zaheer Khan in exchage for Robin Uthappa? Yes, the latter is from Bangalore, and has that local pull factor. He has batted quite well this Ranji, though not anywhere close to what he played like 2 seasons back when he topped the batting charts. But he is supposed to be paid twice of what Zaheer was being paid! Is he really worth that much? I’m sure that BRC missed a trick here. I’m sure that had the BRC asked for a fee from Mumbai Indians in order to release Zaheer in exchange for Uthappa, the Indians would’ve definitely paid up. When Chelski can reportedly offer Anelka, Malouda, Alex and 15 million pounds in exchange for Robinho, Mumbai could definitely part with Uthappa and maybe a million dollars in exchange for Zaheer.

There were rumours of the Mumbai Indians negotiating a swap with Kings XI Punjab for a swap between Powar and Harbhajan, which reportedly got stalled because Harbhajan earns so much more than Powar. Once again, what if the Mumbai Indians paid a fee along with Harbhajan for Powar? I know it is ridiculous that Powar is worth Harbhajan plus a fee, but given their disparity in income, this is the only way that this deal is possible. And I’m sure that there is a particular fee, which if paid along with Harbhajan in exchange for Powar, will leave all the interested parties (Punjab, Mumbai, Harbhajan, Powar) better off. It seems like people are too lazy to find it.

The opportunities like this are endless. All that the franchises need is someone who has sufficient knowledge of game theory, coase theorem, a decent knowledge of cricket (interest in domestic cricket is a desirable quality) and who understands how to structure deals. I don’t know if franchises have already recruited such people but if they haven’t, they should try and recruit. The most obvious choice of person that I can think of who possesses all the above skills (including interest in domestic cricket) is me. Unlike last year, I’m not in the job market right now, but don’t mind doing some part-time stuff. I may not get paid, but I’m willing to work for a few IPL tickets and maybe invites to some parties with cricketers.

I’m also wondering if cricketers’ pay will go down starting the 2011 season onwards. The IPL auctions happened just before the downturn was to begin, and I’m sure that franchises have overpaid for most players. Since players have all signed three year contracts, their pay till the 2010 season is safe. Beyond that, I’m not sure if franchises will offer them fresh contracts at higher or equal salaries.

It would also be interesting to see if some version of the Bosman ruling is to operate in the IPL. We can only wait and see.

Lazy Post – Search Phrases Leading To This Blog

this is yet another “lazy post”. One for which I don’t really need to do too much work. Harithekid recently brought out a list of search terms that have resulted in people hitting his blog. Looking through my google analytics statistics, I find quite a few funny/unusual phrases that have led to people reaching my blog, so I thought I should share it with you.

I don’t want to make this list too long, since some good stuff might get lost in that case. So if you think you reached my blog by searching for a phrase that you thought was interesting and you don’t find that in this list, my apologies. Maybe next time I’ll include the phrase that you searched for in order to land up here.

The top spot of course goes for “pertinent observations”. This is closely followed by people searching for “noenthuda”. Maybe because I’ve never put my real name anywhere on this site, there aren’t many searches for “karthik” either as a word or in combination with other words that lead up to here.

Ok so getting to the gems:

“iit madras” + blog + girls
bitchy logos
broken engagement second thoughts
gay in iimb
how to avoid absent mind with south indian food
how to make my husband stop consuming alcohol
positive black relationships
top reasons marriage engagements break in pakistan
why don’t northies learn a new language
does mckinsey employee non iits
hypothesis for muslims are not terrorist
bleeding hearts by nassim taleb reviews

So I think this is a good time to ask you how you stumbled across my blog. Did you reach here by way of searching for something unusual? Or did you find link to blog on someone else’s blog? Or is it through twitter? Or facebook? Or through a friend’s google reader shared items? Do leave a comment and let me know.

Movies and thoughts

I find Bollywood movies thought-provoking. No, seriously. The thoughts that they provoke may not have anything to do with the movie itself, but provoke they do. This is in total contrast to, say, Spaghetti Westerns or James Bond movies, which are excellent tools for escapism. The good movies of the latter kind totally immerse you, have you completely detached from the real world, and are excellent tools to get you out of NED.

Maybe the thing with the Bollywood movies is that they don’t engage you enough. They don’t engage you enough in order for you to be immersed in them. And that leaves you with enough CPU time to start thinking of other things. Then, it is easier to empathise (in some form; maybe some 10% empathy if not more) with certain characters in certain Bollywood movies, which is impossible to do in case of characters such as James Bond or The Man With No Name. And this empathy will end up directing your spare CPU time to thinking about yourself.

Bollywood movies also have a lot of “slow moments”. Passages in the movie where nothing really happens, and this includes the songs. Passages where nothing enough happens, and which allows you to be able to switch off and devote your entire CPU time to the other thing that you are thinking of. Also, the language is generally easy enough that even if you were to miss a few dialogues (when lost in thought), you are able to catch up with the rest of the movie.

Maybe it has to do with the intent of the filmmakers. Whether they intend to make a gripping movie that will help the audience go off on an escapist trail, or whether they want to purposely keep the movie light so that it doesn’t demand much brain power from the audience. Or maybe it has to do with implementation. It may well be the case that someone wants to make a gripping movie, but does such a bad job of it that the minds in the audience start meandering. Or maybe the filmmakers try to make a movie where the audience sees the movie through the eyes of a certain character. But the problem with that is that in such cases, there is the chance that the viewer equates himself with this character, and starts thinking of the similarities and differences, and focuses on himself rather on the movie.

It also depends upon the intent of the viewer, as to what he is expecting when he goes to the movie. Does he want the movie to present him a mirror so that he can see himself in the characters? Mostly not, I think. Does he go for general entertainment? Mostly yes, I think. Does he go to the movie for some sort of an escapist experience so that he can momentarily be detached from his normal life? Maybe yes, which I think signifies a higher fraction compared to “mostly not”.

I don’t see too many movies. Even those that I see are those that have generally been certified as hits. i don’t normally see art-house kind of movies – which are perhaps actually made to be thought-provoking. The last three Hindi movies I’ve seen (approximately) are Jaane Tu… , Jab We Met and Rock On. I have no clue what the intent of each of these movies was, though I would imagine they were made for general entertainment. Each of them ended up holding a mirror to me, and made me ask myself lots of uncomfortable questions while watching. Maybe the last Hindi movie that involved me enough to distract me from myself was Omkara. I wonder which of these movies I should regard as being better – the one that held the mirror or the one that made me detached.

Rock On

Finally saw the movie today. Was quite ironic that they end it with a message that says “don’t download the music. buy the CD”. and I was watching it on a DVDRip whose torrent that I’d downloaded.

Overall, I liked the movie. People have cribbed about Farhan Akhtar’s singing, but I think it’s ok. He’s not a great singer, but if he was, it wouldn’t have come out as being too authentic for a band that didnt’ end up doing too well. Better singing (say Shankar had sung it) might have helped boost record sales (ok I think the record actually sold quite well), but in the movie it wouldn’t have come out to be too authentic. And then yeah, not having a bass guitarist was a bit inauthentic, but they do partly make up for it during some intros – when the keyboardist is introduced as providing the bass also (maybe inspired by John Paul Jones).

Continue reading “Rock On”

Interior Design

Recently it has been reported that former ML MD John Thain spent some 1.2 million dollars in decorating his office. And people say that this is very conservative by normal CEO standards. Normal people (like me) might wonder why one needs to spend so much on one’s office. Even if you were to list out what needs to go into an office, and then go on to buy the best possible item in each category, this kind of money seems obscene.

So if you are still wondering why people end up spending so much on their offices, you will need to get in touch with someone from the profession called interior design. It’s quite fascinating. The way these people think is extremely instructive, and actually it would make sense for an investment bank CEO to learn this from the designer and then use such ideas to trade. They way these people imagine stuff, they comparisons that they make, the associations that they draw, are incredible. Actually, I think interior designers might be good people to partner on a quiz team.

So it cannot be any random painting that needs to go on the walls. The painting needs to have a theme, and this theme needs to fit in with the general theme of the company. And interior designers being interior designers, will develop their own idea of the company’s theme. And then use this to design the office. So coming back, the painting needs to conform to the ideals of the company. Next, the painter who painted this painting needs to conform to the ideals of the company. Put these two together and the painting will cost a bomb. Doesn’t matter, they need to get everything right. And perfect. And in order

Interior designers also seem to be proficient in stuff such as vaastu, feng shui, numerology, and all such. So each and every desk in the office needs to be oriented in the right way. It’s ok if the employee doesn’t have space to stretch his legs. Doesn’t matter if the position of one particular desk means they can’t play gulli cricket in office. It has to be that way.

It is excellent that interior designers do their jobs so diligently. The way they think, their attention to detail, the way they see the big picture, is all extremely good. In fact, interior design is probably one profession where, to succeed, you need to be both a stud and a fighter. So kudos to the entire community. However, there is a small issue.

The biggest problem with interior design is that it’s all so subtle. Ok, the colour of this wall matches the theme colour of the company. But who would notice? Ok, the painter who painted this exquisite painting just outside the CEO’s door might belong to the same moon nakshatra as the CEO. Excellent attention to detail. But does anyone notice it? it is quite a pity. These designers spend so much time and clients’ money in bringing out the perfect design, but most of their excellent thinking, and work, goes unnoticed.

There is this story about Michelangelo painting the Sistine Chapel. He was painting an extremely dark corner, which was out of eyesight of most visitors, or maybe all visitors to the Chapel. Someone goes up to him and asks why he is taking so much trouble in painting this particular nook when no one will notice it. He replies that he is doing it because God is watching. Extremely commendable. And I suppose interior designers also work on the same principle. However, I’m not sure if Michelangelo billed any additional amount to the Chapel for painting this unseen corner.

The other day, I was talking to my uncle about the design of his drawing room in his Gurgaon house. He mentioned to me that soon after he bought the place, he had called an interior designer to help him design the drawing room. The lady broadly told him about her plans for the house, which my uncle seemed to appreciate, and they sat down to discuss fees. The deal was that the interior designer would instruct my uncle about where he needs to get each and every piece of his furniture from. She would determine the design, the designer and the shops. And my uncle would have to do exactly as she said. And here is the clincher: the interior designer’s fee would be 2% of my uncle’s total expenses on his drawing room.

I don’t think incentives can be more misaligned than this. You get paid to help your client spend his/her money, and the more money you make your client spend, the more money you make. So it is always in your best interest to make sure that the client spends as much as possible. The only limitation might be the client’s budget, but your incentives make sure that you will stretch it to its limit. In case of professional CEO’s, they don’t really have limits, and it is their shareholders that pay. Which is why you get situations like Thain’s expense of $1.2mm on his office room being considered low by industry standards.

It intrigues me as to how interior design fee structures have settled down this way. And the only thing I can think of is that most people are spending someone else’s money. Their shareholders’ money, in most cases. If I were to engage an interior designer some day, I would try and structure her fees differently. I would tell her (numbers here are indicative only) “I’m willing to spend Rs. 10 lakh, and I will pay you a minimum of 20,000 rupees. For every lakh less than 10 lakh that I end up spending, I will give you Rs. 10,000 more.” Or maybe not. I may just negotiate a fixed fee.

NED can be a good thing

Ever since the concept of NED was invented/discovered two years back, it has been painted as a bad thing. I have occasionally described it as a frankenstein – which, after being invented/discovered by me, has come out to consume me. There is a friend who refers to it as “the unspeakable” as she thinks even uttering the word “NED” will send her into NED. NED has been seen as an undesirable state, which everyone wants to get out of as quickly as possible. It is seen as encouraging sloth, and inefficiency, and has only grudgingly been accepted by people as an inescapable fact.

I’ll keep this short and provide only one example, but my point is that NED can also be occasionally a good thing. It is that “balancing force”, which prevents you from being over-aggressive. It is that force that helps cool down your blood, and makes sure you don’t act hastily. It is paramount in making you think twice, and maybe thrice before doing certain things. It makes sure that you are never over-efficient at work, and that will help in keeping your boss’s expectations low enough for you to meet them.

I had thought about one or two examples to quote here, but NED means there has been a long time since I started writing this post, and now. And now that I think about it, I don’t particularly want to mention those two examples. Let me generalize. Certain stuff happened. Some people said some things, which I didn’t like. And I felt like hitting back. Hitting back at a high level. That hit-back would’ve led to an escalation of the situation. And might have been harmful to me. But in the heat of the moment, my cost-benefit analysis would’ve shown this action to be producing positive results.

NED happened. I didn’t do what I was supposed to do. I didn’t do what I had planned to do, rather. Implementation was a bit of a pain so I put it off. And by the time I thought again about it, my analysis of the situation had changed, and it seemed like I would be better off not doing what I had planned to do. Things are all good now. All thanks to NED. If not for NED, I don’t know what I might have done, and I would’ve been in an inferior position right now compared to where I am now.

Two days back, I got a mail saying “sorry if this sounds silly, but what the hell is NED.” I suppose this is a good time to do a check-back. To revise our concepts. So I would encourage you to visit the about page of this blog, and read what NED is all about. And assimilate. And internalize. And recognize the fact that it’s not necessarily a bad thing.

Lazy Post – Statistical Analysis

I call this a lazy post since I didn’t originally write it as a blog post. I had written this as an email to a mailing list, and now thought it might make sense as a blog post. The reference to context: a prominent and well-respected member of the group had written a fairly lengthy argument, and ended it by saying “Maybe this calls for a good regression analysis….” . My reply is here.

I need to mention here that this mail to the group wasn’t responded to (apart from one tangential remark by Udupa). I don’t know if it simply got lost in the flood of mails on the list today, or if people on the group (in general, a very intelligent lot) don’t care for this kind of stuff, or if, for some reason, this caused discomfort of some sort. Anyway, I begin:

I think I had raised this point before in a similar context. it is about the use and misuse of statistical analysis. i think one lesson that ought to be learnt from the ongoing financial crisis and the events leading up to this is that statistical analysis, when misused, can have dangerous consequences, and this is not just for the people who are misusing the analyses.

there is this popular view that if there is data, then one ought to do statistical analysis, and draw conclusions from that, and make decisions based on these conclusions. unfortunately, in a large number of cases, the analysis ends up being done by someone who is not very proficient with statistics and who is basically applying formulae rather than using a concept. as long as you are using statistics as concepts, and not as formulae, I think you are fine. but you get into the “ok i see a time series here. let me put regression. never mind the significance levels or stationarity or any other such blah blah but i’ll take decisions based on my regression” then you are likely to get into trouble.

i think this is broadly the kind of point that is made by people like Paul Wilmott. that the problem is not with statistical analysis, but with the way people use statistical analysis.

ok, now that i’m done with my rant, I’m very sceptical about regression yielding any kind of conclusive results here. i think the number of data points we have here is too small to produce any meaningful results. of course i’m saying this without really looking at all the data that you want to might want to include. and i won’t be surprised if a few tens of papers get published on this topic. all based on statistical analyses. and the results all being orthogonal to one another.

Bastardization Of Indian Society

Sometime in the middle of last year, I had written a controversial blog post on Caste and the Gentleman Class. I had written that post after I had read Gregory Clark’s “A Farewell to Alms”. In that post, I had argued that that the reason India failed to develop a large “gentleman class” was due to our caste system – that given the link between caste and profession, competition for survival happened within castes. To quote myself:

On the same lines, one wonders why this kind of development didnt happen in India, and the answer lies in the caste system. Given the rigid caste system here, it wasn’t possible for people to ‘downshif’t’. Given its tight linkage with profession, what the caste system did was to freeze the proportion of various castes in the total workforce.

Hence, even if the upper caste/class people managed to produce more surviving offspring, these offspring weren’t able to migrate to other ‘lesser’ professions. In other words, the survival of the fittest happened within castes. It was not until much after the industrial revolution and urbanization and the development of modern medicine, that people of different castes started professionallly competing with each other.

In this post, I hope to build upon this earlier theory, and in the process perhaps make it more controversial. The basic idea here is that in the middle ages and perhaps earlier, and definitely later, it was okay in India for a man belonging to a higher class to procreate with a woman belonging to a lower class (ok more controversy here – i am using class and caste interchangably since in those days they were tightly linked) (and the opposite was not permitted. a man could not procreate with a woman belonging to a higher caste).

However, it doesn’t seem likely that the upper class man and the lower class woman would be living together. The upper class man would have a wife of the same class with whom he would live with, while the lower class woman would live in what was called in Tamil Nadu as “chinna veedu” (small house).

Given this kind of arrangement, it is likely that the results of such unions would be brought up by their (lower class) mothers, while they themselves would end up belonging to their father’s class (remember that Indian society has been mostly patriarchal). Culture is not something that you are born with. You pick it up from people with whom you grow up. And thus, these kids of the “chinna veedus” would end up picking the culture and habits of their lower-class mothers.

So what effectively happened in India is a reversal of what happened in Europe. In Europe, since there were no class barriers when it came to competition in professions, people from higher class backgrounds would proliferate in society, thus creating a “gentlemanly” society. In India it was the reverse. It was the case of lower class values percolating into the higher classes. Given the process by which this happened (which I’ve described here), we can call it the Bastardization of Indian Society.

On Booze and Language of Thought

Last Sunday, I was having a discussion with my mother about my drinking – which has been sporadic at best and non-existent at worst. She said she had a probelm with even my sporadic ingestion of alcohol, and demanded that I completely give up drinking. I tried my best to draw it away from a religious/emotional argument, and tried to draw her into a logical argument.

My mother is a biologist by training (it is another matter that her career was in accounting) and said that she is concerned about her gene, and that given that I’m her only offspring, she naturally has incentive in my offspring, and she wants to make sure that they’ll be in good health, and live well. She also has this notion that if either of the parents drink, the children will be born dumb, and there is an increased risk of abnormality. I have no clue about these matters, and somehow managed to change the line of argument.

Then she released her brahmastra. Or what she thought was her brahmastra. Everyone she know who drank alcohol, she said, had ended up becoming a drunkard and a wifebeater. She gave examples of classmates from school, colleagues, colleagues’ husbands, relatives, etc. It was evident that she had prepared her argument well. And in each of these cases, there was no doubt that the person in question was a drunkard and a wifebeater, whose kids were most likely to end up as losers.

It is pertinent to point out here that the entire argument was happening in Kannada. In fact, I’ve never talked to either of my parents, or to any other close relatives, in any other language. I am in general fairly fluent at the language, at least at the Bangalore version which includes loads of English words. I have in general managed to hold my own in several debates and discussions at social gatherings, while talking exclusively in Kannada. I have explained to relatives complicated financial products, and how the sub-prime crisis unraveled, all in Kannada.

Getting back to the argument, the best way for me to handle my mother’s examples was to provide counterexamples. Of perfectly decent people who consumed alcohol. For statistical reasons and given the way the hopothesis had gotten framed, I would need a much larger list than my mother had produced. And in the spur of the moment, I decided that I wouldn’t do a good job at listing and I should continue with logic-based arguments. Phrases such as “selection bias” and “Bayes’ theorem” and “one-way implications” flashed across my head.

Holding up your end of the debate when you aer talking nomally, and in Kannada, is fair enough. However, when you are extremely animated, and speaking at 100 words per minute, things are a bit harder. I realized that my mother would understand none of the jargon that had flashed across my head, and I’d have to explain to her in normal language. My mouth was processing words at 100 words per minute, and suddenly my brain seemed to have gotten a bit slower. The pipeline became empty for a moment and i started stammering. And my mother started making fun of my stammering (i used to stammer a lot when I was a kid. took a lot of effort to get over it).

Coming to the crux of this essay – at this moment another thought flashed to my head. For a long time I wasn’t sure if I thought in any specific language, or if my thought was general. And even if I thought in a particular language, I wasn’t sure if I thought in Kannada or in English. I had always done well enough in both languages to keep this debate unresolved. Now there was the data point. The clinching data point. I quickly realized that had I been speaking in English, my pipeline wouldn’t have gone empty. In fact, when I was trying to explain stuff to my mom, I was doing two levels of translation – I was first translating jargon into normal English, and then translating that into Kannadal. Powerful evidence to sugggest that I think in English.

I was so kicked by this discovery that the original argument didn’t matter to me any more. I quickly promised my mother that I will never consume alcohol again, and she said “shiom”, a kid-word that means something like “ok what you’ve said is final and binding and no changing it”. So I suppose that is how things will stay. I will henceforth stop consuming alcohol. Not that I’ve been consuming much nowadays – average one drink every two months or so. It won’t be hard at all to make the transition.

PS: Interestingly, when I’m trying to speak in any Indic langauge (Hindi, Tamil, etc.) I instinctively form my thoughts in Kannada and then translate. Maybe it is because of similarities that the cost of translation from Kannada to these languages is much lower than the cost of translation from English, that it becomes profitable for me to think in Kannada, which is harder than to think in English.