Goldilocks and Barbells

Most children learn the story of Goldilocks and the Three Bears. Goldilocks finds the bears’ home, and tries out random things there. Pretty much for everything she tries, there will be three versions (each belonging to one of the bears), with one being <too extreme>, the second being <too extreme at the other end> and the third being “just right”.

The basic message can be summarised as “extremes bad, means good”. In fact, even if you didn’t learn the story as a child (I didn’t), the message of “doing everything in moderation” gets impressed upon you from various quarters. “Don’t eat too much, don’t eat too little, eat in moderation” is possibly the most prominent example of this.

And in some way we have all internalised this messaged. That both too much and too little of everything is bad, and it’s the middle path that is the right one.

And then on the other side, a concept that has always existed but formally articulated fairly recently, is the “barbell“. First articulated by Nassim Nicholas Taleb as an investment strategy, it talks about investing in a combination of extremes and eschewing the means. In Taleb’s original case, it was about an investment strategy that is a mix of low-risk bonds and high-risk (long) out-of-the-money options, that together give a low-risk winning portfolio in the long run. This ran contrary to “modern portfolio theory” that tries to get a mix of assets that maximise expected returns and minimise standard deviation (note I’m saying standard deviation and not “risk” – they’re not the same).

And this strategy applies pretty much everywhere in life. There are a lot of things where the only way you can benefit is by “being all in”. Doing things in moderation can actually be hurtful, and combinations that have a “little bit of everything” can be suboptimal to a simple superposition of extremes.

My breakfast is a barbell, for example. I either skip it completely (nearly zero calories from black coffee only), or have a big breakfast with at least two eggs. A light breakfast completely messes up my day.

My exercise is a barbell (no pun intended). I either lift heavy weights (attached to a barbell) or do nothing. Exercises with light weights make me feel miserable.

In my nearly eight month long return to corporate life, I haven’t taken many days off. My philosophy there is that if I take off, I should be able to completely take off (no “one email here”), and have done so only when it’s easy to do so.

You can think of corporate strategy and a company’s focus being a barbell.

The list goes on. The point is – life is full of barbells, or we can make the most of life by using barbell strategies. Do either this extreme or that extreme, but don’t get confused and do something in the middle.

The problem, however, is that we get brought up on goldilocks, not barbells. And think that the middle path is superior to the extremes. It isn’t always so.

Wokes and Jokes

Q: How do you know a woke is losing an argument?
A: They start talking about privilege.

No, this is not a post that seeks to make jokes about wokes. Instead, here, I seek to explore what kind of jokes wokes like, assuming there are jokes they like, that is.

A long time back, I had written here that the problem with the woke movement is that it denies people their jokes. Because jokes are inherently at the expense of someone (a person or group of people or thing), and because extreme political correctness means that making fun of a person or group of people is not polite, political correctness means a lot of jokes go out of the window.

Think of all the jokes that you enjoyed when you are in high school – it is likely that you won’t be able to put most of those jokes on social media nowadays – since it’s not kosher to make fun of the people / groups of people they make fun of.

And so, one day recently, I started thinking if wokes laugh at all – if making fun of people or groups of people is not done, how do they get their laughs? And then I realised that if you look at standup comedians, there are a bunch of them who can be broadly described as “woke” (as per today’s standards – I have NO CLUE how well this will hold up). So what gives? How can wokes have their jokes when most of our old jokes are not valid any more?

The interesting thing about the woke movement is that they largely depend on group identities. One <insert oppressed community (on whatever axis)> person gets beaten, it is seen as an act of violence against the community. Everything is spoken in group terms. The individual’s individuality doesn’t matter. Everything is analysed in group terms.

Except for the jokes.

Wokes get their jokes because they target particular people. And identification of such people is rather easy. Start with choosing a politician (or politicians) who are definitely anti-woke (Modi, Trump, Johnson, Jair, Orban – at the time of writing). And then build a social network around them, on people who hang out with them, agree with them, retweet them, get retweeted by them, and so on. All of them are worth making fun of.

If you make a joke about Modi, you are NOT making a joke about Gujaratis. If you make a joke about Trump, you are NOT making a joke about builders, or blondes. And these jokes are kosher because the target of the jokes are reviled, or are strongly associated with the reviled.

And a person’s status on whether they can be made fun of or not depends on their associations. You cross the proverbial political floor, you can suddenly gain indemnity or get exposed to being made fun of, spending upon the direction in which you’ve crossed the floor.

I’ve never really been a fan of standup comedy (I think it has a rather low “bit rate”). But this possibly explains why I find it even less tolerable nowadays – most of the jokes are political, and it gets boring after a while.

Then again, as the wokes say, everything is political.

More on status and wealth

Playing zero-sum status games is down to our animal instinct. We have evolved to play those. But the way we can be more human is to seek wealth.

Last week, an old friend from high school sent me this podcast, based on all that I’ve been writing here of late on status-seeking, wealth-seeking, and zero and positive sum games.

I haven’t listened to the full conversation, but only a small snippet (the bit that my friend asked me to listen to, from minutes 20 to 30).

Then, on Sunday night, I started re-reading Jordan Peterson’s 12 Rules For Life. I’m in the middle of the first chapter now (one of my favourites from the first reading, and which I’ve read multiple times). This is the one about depression and serotonin. And that triggered further thoughts on status and wealth and all that.

So some pertinent observations based on these:

  • Mating is a status game. Across species, creatures desire to mate with the highest status members of the opposite sex. And you maximise your chances of that by increasing your own status.

    A high status individual (of whatever species) will have greater access to mates, and greater access to high-quality mates, and thus greater chance of propagating their genes.

    Thus, we have evolved to seek status, not wealth

  • You may argue that in human society, wealth is also an avenue for getting superior mates. However, the problem with this is that we are simply using wealth to buy status in this case. The fundamental reason your mate wants to mate with you is your status, which, in this case, you have got on account of your wealth.
  • Status seeking is zero sum, as Naval Ravikant says in that viral podcast. As the above linked podcast (which is about Rene Girard and mimetic desire) says, when we seek status, we seek to imitate people with higher status than us.

    There are two problems with this kind of approach. Firstly, by doing things that higher status people have done, we don’t necessarily get that kind of status. Especially when the things we do are things that involve power-law payoffs.

    Secondly, if everyone imitates the same kind of high status individuals, everyone ends up seeking the same thing. If you and I are seeking the same thing, we don’t trade with each other. And thus we don’t make each other better off.

    If we are seeking wealth (an unnatural thing, as explained above), rather than status, we go about it in our own ways, and that makes it easy for us to trade and all get ahead towards our respective goals.

  • The podcast talks about how people with conditions such as Asperger’s (or anything on the spectrum, or anything that reduces empathy) have inferior empathy, and that means they see less need to conform, or to imitate. And this can lead to them achieving superior outcomes since they do things their own way (I add that this can also lead to them achieving inferior outcomes – basically “vol goes up”).

    Sounds good to me 😛

  • When we imitate others too much, they become rivals to us. Whether you consciously think of them that way or not. And this can lead to misery to all parties (unless you are high-status, or wealthy, enough to not care)
  • At the beginning of Pink Floyd’s Keep Talking (Division Bell), Stephen Hawking comes on and says “for millions of years, mankind lived just like the animals. Then something happened which unleashed the power of our imagination. We learnt to talk”.

    And when we learnt to talk, one of the powers of our imagination that got unleashed was the ability to trade. We figured out that by trading, we can build wealth. And by building wealth, we have an easy means of cooperation. And the ability to play positive sum games. And not having to futilely play status games all the time.

In some sense, trade, commerce and wealth are the fundamentals of what makes us human. It just happens that we’ve evolved to seek status instead, and so we keep pulling each other down.

 

Slip fielding meetings

It’s been nearly six months since I returned to corporate life. As you might imagine, I have participated in lots of meetings in this period. Some of them are 1-on-1s. Some are in slightly larger groups. Some meetings have big groups.

Meetings in big groups are of two types – ones where you do a lot of the talking, and what I have come to call as “slip fielder meetings”.

Basically, participating in these meetings is like fielding at slip in a cricket match. For most of the day, you just stand there doing nothing, but occasionally once in a while a ball will come towards you and you are expected to catch it. That means you need to be alert all the time.

These meetings are the same. For most of the discussion you are not necessarily required, but once in a while there might be some matter that comes up where your opinion is required, and you need to be prepared for that.

I can think of at least two occasions in the last six months where I was rudely awoken from my daydreams (no I wasn’t literally napping) with someone saying “Karthik, what do you think we should do about this?”.

And since then I’ve learnt to anticipate. Anticipate when my presence might be required. Figure out from the broad contours of the conversation on when I might be called upon. And remain alert when called upon (though on one occasion early on in the company my internet decided to give way just when I had started talking in a 20 person meeting).

Yesterday, a colleague gave me a good idea on how to stay alert through these “slip fielder meetings”. “Just turn on the automated captions on Google Meet”, he said. “Occasionally it can be super funny. Like one day ‘inbound docks’ was shown as ‘inborn dogs'”.

I think this is a great idea. By continuously looking at the captions, I can remain sufficiently stimulated and entertained, and also know what exactly is happening in the meeting. I’m going to use this today onwards.

I now wonder what real slip fielders do to stay alert. I’m not sure chatting with the wicketkeeper is entertaining enough.

Uncertain Rewards

A couple of months back, I read Nir Eyal’s Hooked. I didn’t particularly get hooked to the book – it’s one of those books that should have been a blogpost (or maybe a longform article). However, as part of the “Hooked model” that forms the core of the book, the author talks about the importance of “uncertain rewards”.

The basic idea is that it is easier to get addicted to something when the rewards from it are uncertain. If the rewards are certain, then irrespective of how large they are, there is a chance that you might get bored of them. Uncertainty, on the other hand, makes you curious. It provides you “information” each time you “play the game”. And you in the quest for new information (remember that entropy is information?), you keep playing. And you get hooked.

This plays out in various ways. Alcohol and drugs, for example, sometimes offer “good trips”, and sometimes “bad trips”. The memory of the good trips is the reason why you keep at it, even if you occasionally have bad trips. The uncertain rewards hook you.

It’s the same with social media. This weekend, so far, I’ve had a largely good experience on Twitter. However, last weekend on the platform was a disaster. I’d gotten quickly depressed and stopped. So why did I get back on to twitter this weekend when last weekend was bad? Because of an earlier weekend when it had provided a set of good conversations.

Even last weekend, when I started having a “bad trip” on Twitter, I kept at it, thinking the longer I play the better the chances of having a good trip. Ultimately I just ruined my weekend.

Uncertain rewards are also why, (especially) when we are young, we tolerate abusive romantic partners. Partners who treat you well all the time are boring. And there is no excitement. Abusive partners, on the other hand, treat you like a king/queen at times, and like shit at other times. The extent of the highs and lows means that you get hooked to them. It possibly takes a certain degree of abuse for you to realise that a “steady partner who treats you well” makes for a better long term partner.

Is there a solution to this? I don’t think so. As we learn in either thermodynamics or information theory, entropy or randomness is equal to information. And because we have evolved to learn and get more information, we crave entropy. And so we crave the experiences that give us a lot of entropy, even it that means the occasional bad trip.

Finally, I realise that uncertain rewards are also the reason why religion is addictive. One conversation I used to have a lot with my late mother was when I would say, “why do you keep praying when your prayers weren’t answered the last time?”. And she would quote another time when her prayers WERE answered. It is this uncertain reward of answers to prayers (which, in my opinion, is sheer randomness) that keeps religion “interesting”. And makes it addictive.

Shankersinh Vaghela

Ever since I returned to India 2 years back, my roasted peanuts of choice have been the one by Haldiram. I used to even buy them to grind them to make peanut butter until I discovered MyFitness Peanut Butter almost exactly a year back.

Recently, though, I hadn’t been able to procure Haldiram’s peanuts. And on a random trip to a supermarket, I found a brand called “Jabsons”. I bought it on a whim, and was super impressed.

The nuts themselves are larger than Haldiram’s, and are crispier. And I notice that the brand markets that it’s from Gujarat, where a lot of peanuts are grown. So far, so good.

And then on twitter, people recommended that I try their flavoured peanuts as well. For the longest time I haven’t been a fan of flavoured peanuts, maybe because I’ve had a few bad ones. I mean, I like the local shop ones, the yellow split masala ones called “Congress” and the red roasted ones called “Communist“.

In any case, inspired by the responses to my tweet, I decided to pick some variants of the Jabsons peanuts on the next visit to the supermarket. I started “safely”, with Black Pepper.

And that was insanely brilliant. Very very awesome. Among the best flavoured roasted peanuts I’ve ever eaten. I even crafted a tweet in my head to appreciate it, but couldn’t post it then because I was on a mini twitter break. I’m writing it here.

Jabsons black pepper peanuts kicks the ass of both Congress and Communist. Given that it comes from Gujarat, I hereby christen it “BJP”. 

And my quest for other flavours of Jabsons peanuts continued. I soon picked up a “spicy masala” flavour. It was a bit spicy for my liking, but I found that it goes brilliantly with curd rice. And then I acquired a taste for it.

Thinking about it, the Jabsons spicy peanuts are somewhat like Congress, but not quite Congress. And they come from Gujarat. Sort of Congress from Gujarat, but not quite Congress. Who does that remind you of?

Well, Shankersinh Vaghela, of course.

So I hereby christen the Jabsons Spicy Peanuts Shankersinh Vaghela. Goes very very well with curd rice.

Confusing with complications

I’m reading this awesome article by Srinivas Bhogle (with Rajeeva Karandikar) on election forecasting. To be fair, not much of the article is new to me – it’s just a far more readable version of Karandikar’s seminal presentation on the topic made at IIT Kanpur all those years back.

However, as with all good retellings, this story also has some nice tidbits. This one has to do with “index of opposition unity”. The voice here is Bhogle’s:

It is easy to understand why the IOU becomes so critical in such situations. But, and here’s the rub, the exact mathematical formula connecting IOU to the seat count prediction is not easy to find. I searched through the big and small print of The Verdict by Dorab Sopariwala and Prannoy Roy, but the formula remained elusive.

Rajeeva suggests that it was likely based on simple heuristics: something like ‘if the IOU is less than 25%, give the first-placed party 75% of the seats.’ It may also have involved intelligent tweaking based on current survey data, historical data, informal feedback, expert opinion, gut feeling, and so on.

I first came across the IOU in Prannoy Roy and Dorab Sopariwala’s book. The way they had presented in the book, it seemed like it is a “major concept”. It seems, like I did, Bhogle also looked through the book trying to find a precise formula, and failed to do so.

And then Karandikar’s insight above is crucial – that the IOU may not be a precise mathematical formula, but just an intelligent set of heuristics, involving intelligent tweaking.

Sometimes putting a fancy name (or, even better, an acronym) on something can help lend credibility to the concept. For example, IOU is something that has been championed by Roy and Sopariwala for years, and they have done so to a level where it has become a self-fulfilling prophecy, and a respected scientist for Bhogle has gone searching for its formula!

Also, sometimes, telling people that you “used an intelligent heuristic” to come up with a conclusion can lead you to be taken less seriously. Put on a fancy name (even if it is something that you have yourself come up with), and the game changes. You suddenly start to be taken more seriously, like Ganesha assumed when he started sending fan mail under the name “YG Rao”.

And like they say in The Usual Suspects, sometimes the greatest trick that the devil ever pulled was to convince you that he exists. It is the same with “concepts” such as IOU – you THINK they must be sound because they come with a fancy name, when all that they apeear to represent is a set of fancy heuristics.

I must say this is excellent marketing.

Monetising volatility

I’m catching up on old newsletters now – a combination of job and taking my email off what is now my daughter’s iPad means I have a considerable backlog – and I found this gem in Matt Levine’s newsletter from two weeks back  ($; Bloomberg).

“it comes from monetizing volatility, that great yet under-appreciated resource.”

He is talking about equity derivatives, and says that this is “not such a good explanation”. While it may not be such a good explanation when it comes to equity derivatives itself, I think it has tremendous potential outside of finance.

I’m reminded of the first time I was working in the logistics industry (back in 2007). I had what I had thought was a stellar idea, which was basically based on monetising volatility, but given that I was in a company full of logistics and technology and operations research people, and no other derivatives people, I had a hard time convincing anyone of that idea.

My way of “monetising volatility” was rather simple – charge people cancellation fees. In the part of the logistics industry I was working in back then, this was (surprisingly, to me) a particularly novel idea. So how does cancellation fees equate to monetising volatility?

Again it’s due to “unbundling”. Let’s say you purchase a train ticket using advance reservation. You are basically buying two things – the OPTION to travel on that particular day using that particular train, sitting on that particular seat, and the cost of the travel itself.

The genius of the airline industry following the deregulation in the US in the 1980s was that these two costs could be separated. The genius was that charging separately for the travel itself and the option to travel, you can offer the travel itself at a much lower price. Think of the cancellation charge as as the “option premium” for exercising the option to travel.

And you can come up with options with different strike prices, and depending upon the strike price, the value of the option itself changes. Since it is the option to travel, it is like a call option, and so higher the strike price (the price you pay for the travel itself), the lower the price of the option.

This way, you can come up with a repertoire of strike-option combinations – the more you’re willing to pay for cancellation (option premium), the lower the price of the travel itself will be. This is why, for example, the cheapest airline tickets are those that come with close to zero refund on cancellation (though I’ve argued that bringing refunds all the way to zero is not a good idea).

Since there is uncertainty in whether you can travel at all (there are zillions of reasons why you might want to “cancel tickets”), this is basically about monetising this uncertainty or (in finance terms) “monetising volatility”. Rather than the old (regulated) world where cancellation fees were low and travel charges were high (option itself was not monetised), monetising the options (which is basically a price on volatility) meant that airlines could make more money, AND customers could travel cheaper.

It’s like money was being created out of thin air. And that was because we monetised volatility.

I had the same idea for another part of the business, but unfortunately we couldn’t monetise that. My idea was simple – if you charge cancellation fees, our demand will become more predictable (since people won’t chumma book), and this means we will be able to offer a discount. And offering a discount would mean more people would buy this more predictable demand, and in the immortal jargon of Silicon Valley, “a flywheel would be set in motion”.

The idea didn’t fly. Maybe I was too junior. Maybe people were suspicious of my brief background in banking. Maybe most people around me had “too much domain knowledge”. So the idea of charging for cancellation in an industry that traditionally didn’t charge for cancellation didn’t fly at all.

Anyway all of that is history.

Now that I’m back in the industry, it remains to be seen if I can come up with such “brilliant” ideas again.

The Office!

For the first time in nearly ten years, I went to an office where I’m employed to work. I’m not going to start going regularly, yet. This was a one off since I had to meet some people who were visiting. On the evidence of today, though, I think i once again sort of enjoy going to an office, and might actually look forward to when I start going regularly again.

Metro

I had initially thought I’d drive to the office, but white topping work on CMH Road means I didn’t fancy driving. Also, the office being literally a stone’s throw away from the Indiranagar Metro Station meant that taking the Metro was an easy enough decision.

The walk to South End Metro station was uneventful, though I must mention that the footpath close to the metro station works after a very long time! However, they’ve changed the gate that’s kept open to enter the station which means that the escalator wasn’t available.

The first order of business upon entering the station was to show my palm to one reader which took my temperature and let me go past. As someone had instructed me on twitter, I put my phone, wallet and watch in my bag as I got it scanned.

Despite not having taken the metro for at least 11 months, the balance on my card remained, and as I swiped it while entering, I heard announcements of a train to Peenya about to enter the station. I bounded up the stairs, only to see that the train was a little distance away.

In 2019, when I had just moved back to Bangalore from London, I had declared that the air conditioning in the Bangalore Metro is the best ever in the city. Unfortunately post-covid protocols mean that the train is kept at a much warmer temperature than usual. So on the way to the office, I kept sweating like a pig.

The train wasn’t too crowded, though. On the green line (till Majestic), everyone was comfortably seated  (despite every alternate seat having been blocked off). I panicked once, though, when a guy seated two seats away from me sneezed. I felt less worried when I saw he was wearing a mask.

The purple line from Majestic was another story. It felt somewhat silly that every alternate seat remained blcoked off when plenty of people were crowding around standing. I must mention, though, that the crowd was nothing like what it normally is. In any case, most of the train emptied out at Vidhana Soudha, and it was a peaceful ride from there on.

40 minute from door to door. Once office starts regularly, I plan to take the metro every day.

The Office

While the office was thinly populated, it felt good being back there. I was meeting several of my colleagues for the first time ever, and it was good to see them in person. We sat together for lunch (ordered from Thai House), and spoke about random things while eating. There was an office boy who, from time to time, ensured that my water glass and bottle were always filled up.

In the evening, one colleague and I went for coffee to the darshini next door. That the coffee was provided in paper cups meant we could safely socially distance from the little crowd at that restaurant. The coffee at this place is actually good – which again bodes well for my office.

And then some usual office-y things happened. I was in a meeting room doing a call with my team when someone else knocked asking if he could use the room. I got into a constant cycle of “watering and dewatering”, something I always do when I’m in an office. The combination of the thin attendance and the office boy, though, meant that there was no need to crowd around the water cooler.

I guess this is what 2020 has done to us. Normally, going to office to work should be the “most normal and boring thing ever”. However, 2020 means that it is now an event worth blogging about. Then again, I don’t need much persuasion to write about anything, do I?

The Law is an Ape

I’ve always known that I have long arms relative to the size of the rest of my body. I think I discovered this sometime in the late 90s, around the time I both stopped growing vertically and started wearing full arm shirts. I remember being forced to buy shirts one size too large for my shoulders because otherwise the sleeves wouldn’t reach all the way down.

My father had the same problem as well, and so he wore shirts one size too large as well. Over time, I managed to find brands that fit both my shoulders and my arms properly (the Aditya Birla stable is good for this -Loius Phillippe, Van Heusen, etc. Arrow never fits me). And then I took to getting my formal shirts tailored. Last year I bought a bunch at Gap, after I found that they fit me well.

Only recently, while I was trying to analyse my performances at the gym, that I realised that my long arms might be affecting stuff apart from my attire as well. For the longest time now, I’ve been trying to learn to power clean, and have never quite managed it.

The power clean involves, among other things, holding the bar with your arms outstretched where it touches the fold in your waist (where your torso meets your groin). The idea is that as you pull the bar up past your thighs, you make it touch the fold in your waist while performing a “triple extension” and jumping, and that will power the bar up.

And I recently discovered that I can’t make my bar touch the fold of my waist unless I hold it really really wide, like you do for a snatch. “Maybe I have long arms”, I thought, and then remembered my troubles with buying shirts.

And then I started wondering if I could quantify if I actually had long arms. Looked around a little and found that there is the concept of the “wing span” or “arm span“. I figured how to measure it, and got my wife to measure it for me. It’s 192 cm. My height is between 179 and 180 cm. This means my arm span is 12-13 cm, or nearly 5 inches longer than my height.

Most humans have their arm spans about the same as their height, or just a little longer. According to this article, my long arms mean that I could have been an elite basketball player or a swimmer, since these sports are good for people with long arms. That perhaps explains why I was a decent defender in basketball in school, though I was among the least athletic people you could find.

I kept looking, and reading articles. I thought of myself as being “the Law” (long arms, get it?). And then I came across this measure where rather than subtracting your height from your arm span, you take the ratio. The ratio of your arm span to your height is called “ape index“.

Most humans have an ape index close to 1. NBA players have an average ape index of 1.06. My ape index is higher than 1.07. Shortly after she had measured my arm span, I told my wife about this. “Well, I always knew you were an ape”, she said.

So yes, for my height I have really long arms. This means I find it hard to buy shirts that fit me. This also means I find it relatively easier to deadlift. Long arms also mean that I find movements where I have to lock out my hands upwards, like the bench press or the overhead press, really difficult. Maybe this explains why I have piddly bench and overhead numbers compared to my squat or deadlift? Long arms also make it harder to do pull ups, which possibly explains why completed my first ever pull up in life at 37.

You could think I am the law. You could also think I am an ape. Or maybe, the law is an ape?