On Alonso and Delta Hedging and Creating Positive Black Swans (and louvvu of course)

Yesterday, on the Twisted Shout blog, I had blogged about Xabi Alonso, and his methods for scoring goals. Complete with videos of a few of his goals, and incomplete because I couldn’t find a few other videos, I explained how he goes about the entire process. He takes long shots, I had explained. From a distance. Hoping to catch the goalkeeper off guard. And accurate enough to get the ball in the net most of the time.

Towards the end of The Black Swan, Nassim Taleb talks about how you can make black swans work for you. He talks about industries such as moviemaking and book publishing, and he says they traditionally thrive on positive black swans. They lose a little money on most projects – books or movies, but make significantly more money when one of them succeeds.

The book industry, Taleb argues, has now lost its traditional revenue model. Nowadays, the norm for publishers is to dole out huge advances to authors who will potentially write blockbusters. This, Taleb says, now exposes the publishers to huge negative black swans. The advances are so huge that if a book sells well they recover their investments. If not, they are prone to losing a huge amount.

I notice a similar problem in the romance industry. Suppose you have been hitting on, or even seeing, a girl for a long time, and it’s now time for measurement. By conducting the measurement experiment now, you are exposing yourself to a huge negative black swan. You have already made considerable investment in the relationship, mostly emotional but also monetary and temporal. And what if the measurement doesn’t go the way you want it to go? You are already in the D (desire) of Kotler’s AIDA. It will take a long time for you to recover from it, and this could even be career threatening, as I had discovered the hard way a couple of days years back.

Now, my theory with relationships (I don’t know how much you want to trust this – since I’ve never been in a relationship) is that in order to succeed, both parties should be at least in the I (interest) zone. And one of the parties has to be in D zone. This is a necessary but not sufficient condition for the relationship to go thorugh.

So, how about testing whether the other person is in the I zone when you are also in I zone? If she is, then well and good – you can start the process of figuring out if you want to get into D, etc. If she isn’t you can quickly cut your losses and move on. If she does admit to being interested in you, it’s great. It’s a positive black swan. And if she tells K, you haven’t really invested much in the relationship so it shouldn’t be hard. Right? So that’s how my mind ran when I thought about this problem yesterday.

I sent her a mail asking her for permission to put blade on her. I explained to her in the mail (i’ll probably blog the mail at a later date – I’m quite proud of my efforts on second thoughts I won’t blog the mail. I think she deserves exclusivity to that masterpiece) that I ever since I met her a few days back I have gotten really interested in her, and am considering the possibility of blading her. That if she is not interested in getting bladed by me, then there is no point in my continuing and wasting both our times and energies, and so she should tell me that right now. I sent this mail to her earlier this evening and I’m still awaiting her reply.

So where does delta hedging fit into this?  It is like the road to Ithaca as this poem mentions. It is about the journey being more enjoyable than the destination. It is about the process of doing something being more enjoyable than the results. It is from the excitement you get just by doing something for the heck of it. These are all what I call as second order effects. They are, in effect, derivatives. First order derivatives of something you are doing, which is effectively the underlying.

As I had mentioned in my previous post, by going ahead with the blading, the only thing I had to lose was my confidence. My form. And if I had gone about blading the conventional way, poking and probing, and making small inroads, the process too would’ve been excruciating, and would’ve added to the pain of the blade not succeeding. So was there a way in which I could hedge out the loss of form and confidence?

I think I’ve been fairly ingenious in going for my long shot. I’m doing something unusual by going about it the unconventional way. Add to this the joy of sitting and drafting that letter to her (yes, it’s a masterpiece). And the possibility of the insights I might gain from this process. And of blogging it, as I am doing now. As soon as I had hit upon this method, i realized that the second order advantages from this were huge. And would easily hedge away any blues that failure in my attempt would bring. It was like getting a put option along with a stock. You knew that your losses were capped.

On the other hand – if she accepted – the returns would be huge. It would be a positive black swan. Capped losses and uncapped gains! Once I had figured this out it was a no brainer that I should go for it. And I have gone for it. A long shot a la Alonso. And I’m waiting for the result. Wish me luck.

Vyaasa and correlated hedges (and louvvu)

Some follow-up over my yesterday’s post on louvvu. This is a little arbit so if you are the serious  types, you needn’t read on.

I’ve been told by my “ex-bladees” that i can become ferocious and scary when I’m putting blade. I don’t konw what it is about me, but it seems i become very intense when putting blade and that immediately puts the woman off and she gets scared of me. This reminds me of Veda Vyaasa. Vichitravirya’s wives were paranoid when he came to them in order to help them prolong the Kuru dynasty. One shut her eyes so tight that the kid was born blind. The second went so pale that the kid was born paler than Nicole Kidman and Andres Iniesta put together. And for the third night, they just decided to send a maid.

The difference between then and now was that back then the women were forced to sleep with Vyaasa just to ensure the continuity of their dynasty. They had no choice. Now, though, if the woomaans see a ferocious blader, they’ll just run away. Ignore. Become hostile. And I don’t think it’s been pre-ordained that I’m going to be instrumental in the prolongation of any dynasty. I think I should just stick to writing stories.

Over the last few days, I’ve been on high amplitude high frequency. Hyperactivity intervowen with extreme NED. I realize I’m a flow person. When things are going fine in general, I’m able to do everything else also quite well. Assume that for hedging purposes I do more than one thing at a time. If something goes bad in one of those, then it pulls down my performance in the rest too. It affects my form in general. It’s something like VVS Laxman losing badly in a game of tennis. And finding the next morning that he can’t hold a cricket bat.

So yeah, given that I’m a bad blader, if I do end up putting blade in the case I described yesterday, I have a feeling it might have a much bigger impact in life. Because the different threads in my life are usually so intervowen, I rarely come across a “nothing to lose” case. I cansay “i have nothing to lose but my form… ” but my form is critical. So I don’t know if I should be willing to lose it.

Ok I’ve written this late night so I might be rambling a bit. But I suppose you get the gist of it. As for the case I described yesterday, I think I’ll go for the long shot. I’ll assume I’m just practising. And go for it. If I do succeed, great. Else, all i lose is my form 😛

Falling in louvvu can be hard on the head

It’s been a long time since I hit on someone. Two years and four months to be precise. Actually, even that is not so precise. You could give it a standard deviation of ten days, for I don’t really know as to where to draw the line on my blading. After that, I haven’t hit on anyone. Promise. I’ve had two fifteen minute crushes (one in a bus and one at a cane chair shop) but didn’t have the opportunity to talk to either of them.

Apart from this, I have quit two jobs. I have been through two periods of joblessness (one of them fairly protracted). Things have been very bad on the family front. I have been through a protracted (over two years) period of low confidence. Putting blade on someone has been the last thing on my mind. It also hasn’t helped that I haven’t met a single new bladable interesting girl in this period of time.

So when I suddenly come across this fairly interesting girl, I don’t really know what to do. One part of me tells me that I’m totally out of practice, and will only bring misery upon myself if I go ahead with the blading. This part tells me that I’m not ready to put blade yet. This reminds me of the pain I went through in my previous blading attempts. This tells me that the girl might already have a boyfriend, and that she lives in a different city.

The other side tells me such opportunities are rare, and I should go for it. This part reminds me of the goalkeeper theory in case she has a boyfriend. When I put forward the question as to the probability of making it given that it’ll be long distance, this part tells me about the Alonso theory (I’ll blog about this on the TS blog in a couple of days). This part tells me that if i keep passing up on half-chances like this, I am likely to die a virgin. And that I must go for it.

Even if i decide to go for it, I don’t know whether to take it to heart or treat it like a long shot. My late father used to talk about his “thread theory”. “Imagine you need to move a mountain, and you have a thread”, he used to say. “You put the thread around the mountain and give it your best shot. If you succeed, you’ve moved a mountain. Else you’ve only lost a thread”. I know that if I don’t put my heart and soul into this, I won’t be able to give it my best shot. On the other, putting heart and soul into this would increase my costs significantly. Unlike Alonso, my best shot isn’t my long shot.

I don’t know if it is rational to be irrational when you are thinking of putting blade. This, once again ties in with the above point as to whether I should put heart and soul into the long shot. Vyshnavi is firm when she tells me that I should be completely rational and never lose my head. Neha has also maintained that the most important decisions in the blading process are taken by the head, and not by the heart.

Then there is the issue of the advisor. Especially for an amateur like me, an advisor in the deal can be of great help. However, sometimes the problem with an advisor is that you should necessarily take his/her opinion on things. If you do something against his/her advice, you’ll get blamed for it. Thankfully, Neha, who was my advisor on my last attempted deal, did a fairly good job. She gave me her space, and gave her expert advice only when asked for. However, the choice of Neha as lead advisor on that deal presented a new set of problems.

My mother considers herself to be an authority on relationships, and got upset that I had selected Neha to advice me on that deal (my mom knew the girl I was blading then). She had made me promise to her that I make her advisor on the next deal. However, getting your mother involved in a deal is never a good idea. What if it doesn’t work out? Won’t she feel bad about it then? Shouldn’t I be telling her about the deal only when it has a good chance of becoming pukka? Or should I just keep the promise.

The blading procedure itself is another story. From my long career, I get the feeling that my half-rude half-arrogant half-sugary (i know it doesn’t add up; i don’t care) doesn’t generally make the right kind of impact. After every breakdown of a deal, I jot down a set of “learnings” in my head and promise to make use of those in my next deal. However, I’m not confident at all of not repeating my earlier mistakes. Also, if my own style hasn’t been working, is it fair to assume someone else’s style just for blading? Won’t I be dishonest to the woman by not showing her my true self? Won’t there be the risk of my mask falling off?

And how should I approach this? The last few times, I made the mistake of getting on to the wrong ladder. i suppose I should somehow get onto the right ladder at an early stage. How do I manage that without appearing despo? It’s ok to tell people “i’m considering the possibility of working for your company” but you’ll get slapped if you say upfront “i’m considering the possibility of marrying you. need to think about it”. Anyway.

I think I should first figure out whether this will be a long shot or whether I should put my full enthu for it. Once that is done, then I can either strategically pass, or unleash, as the case may be. I will probably go for it without a formal advisor this time, just using one or two friends as sounding boards. I’ll probably just stick to my own countrax style – I usually believe in being honest.

Even if I take care of all this, there is this old problem of figuring out what things are like on the other side. The old problem of quantum mechanics will remain. The whole process of “non-destructive testing”. The problem which I’d famously called “Schrodinger’s girlfriend“. I request you to wish me luck on this.

The IITM Open Quiz and LTCM

Yesterday, I lamented about the fact that the IITM Open Quiz is no more, because the quizzers at IITM decided to default on their obligation to take the great tradition forward. I then called for volunteers to contribute questions so that we can hold the quiz at a different date.

I’m reminded of the collapse of Long Term Capital Management. There, when the company was about to default, different ibanks all (all except Bear Stearns) pitched in with a little bit of money each to resurect it. Similarly, this time we can expect us old quizmasters of the quiz to contribute a few questions each in order to bail it out.

However, we should remember that the LTCM bailout couldn’t have been done by the ibanks alone. The most important player back then was the US government. Similarly we need a  government-like player here who can facilitate the resurrection of the quiz, and assure all “creditors” (people who “lend” questions) that their efforts won’t go in vain (for the record, creditors to LTCM encashed their bailout money at a substantial profit a few years later).

I had also mentioned yesterday that there is no point if the IITM Open is held at a place other than IITM. The government, we thus think, should be IITM. However, it won’t be as easy to get buy-in from the IITM Student Community (who are critical to doing all the GA work, etc.) as it would be to get buy-in from the profs/admin (who have been sympathetic to this quiz throughout its existence). It’s like the US president agrees to orchestrate the bailout but the treasury department employees who have to actually do the work become hostile.

I wonder what steps we can take in order to turn this situation around, and get the people to organize the quiz. As I had mentioned earlier, getting volunteers on the quizmaster front won’t be fight.

A real real bitchy post – the periodic petromax

A while back (maybe around the time when I moved to this blog from LJ), I made a decision that I will reform my blogging. No personal rants. No bitching. No slander. I’ve managed to get by quite well without the personal rants. I take out my frustrations elsewhere, and my readers are happy that they don’t have to read the rants. However, I’m not sure that’s the case with the other rules I made for myself. Despite the “no slander” rule, I keep getting abused once in a while, by friends and acquantances, that I’m being mean to them. Or that I’m saying something inappropriate. And on the other hand, NED regulars are pissed with me that I don’t bitch any more.

So to set right this anomaly that I inflicted on myself and on my blog, here is a really bitchy post. Basically it started off in a bracket conversation with Baada. It was one of those good old bitching sessions. And as part of it, I wrote a story. A true story (truth verified on basis of second hand and third hand information). And once I’d written it, I thought I was wasting it if Baada would be the only guy that would  read it.

I approached Aadisht, who writes similar stuff in his WFiles and gets away with it. He said K, and asked me to publish it myself with names changed. I don’t like to invent names, but I don’t mind inventing nicknames. However, as I’ve said before, this story is true (based on third-hand sources; and this is not a research paper that I have to put references). It is about a certain person, the googling of whose name throws up my blog in the first page of results. And yes, this is extremely bitchy. And any of you think I’m being wrong for writing this, and want to shout at me, you are welcome to do so. You’ll get the “pepsodent treatment” ( “pepsodent treatment” is based on one pepsodent ad; i assume there is a protective ring protecting me and you can go on shouting as much as they want. ). Anyways, I’ve almost copied verbatim what I had written to Baada. There is a character called the “periodic petromax” in this story. it is self-explanatory. I’ll be referring to him as PP throughout this post:

the story I heard about her is:

campus -> PP
then she ditched him as soon as she started working at BigFrenchBank
and she started sleeping with her boss (married guy) at BigFrenchBank
parents came to know and got pained. asked her brother-in-law who is in BigAmericanBank to get a job for her there
so she moved to BigAmericanBank, and obviously stopped sleeping with her old boss
and again she started putsing wiht PP
but old habits die hard
so she started sleeping with her new boss
and of course she ditched PP
this time the boss wasn’t already married. so her parents figured the most elegant solution would be to get her married to this guy.
but i won’t be surprised if she gets divorced soon and again start going around with PP

Ok now it seems like a letdown. This doesn’t look as strong as it did when I first wrote it. Anyways i’ve spent considerable amount of office time writing this, so I’ll let it stay.

Bongobondhus

On Sunday I got my new house cleaned. Some three bongs came to do the job and the first thing they wanted was some consumables. “Tezaab, saarof aur bhim powder”, one of them said. The first was understandable – I clearly remember from the posters of the Anil Kapoor – Madhuri Dixit starrer (incidentally the first ever hindi movie i saw) that “Tezaab is acid”. But saarof and bhim? I thought it was something local to Gurgaon. So I took one of them along to the shop.

It turned out that he wanted Surf and Vim. It seems I was too late to put on my “bong filter” .

I must say they did an excellent job of cleaning (and they better have done, for the small fortune they charged me for it). Finally I ask them where their names and where they are from. One of them had disappeared by then. The others gave their name as “bhokto” and “orjun”. And they said they are from Kolkota. I asked them if they are from Kolkota or from Bangladesh, and they immediately pulled out their Election Voter ID Cards to ostensibly prove they are Indians!

Facebook App – how do you know each other?

Ok i know i’ve blogged this before. It was sometime in December 06, and it was on my old blog. About situations where you meet two people who know each other, and you don’t nkow how they know each other. And then it’s the time for long explanations and all that.

The same happens online also.  People you least expected to know each other will be friends on facebook, and you’ll need to know how they know each other. I wonder if an app can be built on this idea. And this is al that is there in my head right now.

Something like you can pick 2 people in your friends list and ask them how they know each other. There will be a page for every such pair of people, and this page will be visible to all those who are common friends of both. The page will be initialy populated with the answer to the question that facebook asks you when someone friends you – “how do you know XXXX”. and you  give an answer such as “I went to kindergarten with her”. this will form the basis of that page, and people can grow that page by asking questions and putting answers (say let’s restrict size of each message to 140 characters, to preent people from boring us)

Actually we can have a hypergraph here – a “how do you guys know each other” need not be addressed to just two people. It could be addressed to more people, provided they form a clique (for the uninitiated, a clique is a set of people where everyone knows everyone else). and there can be a page for these. and then you can have cliques being subcliques of supercliques, and all that.

will be max fun, i think. and can b e supported by advertising. let me know if any of you want to develop this (i’m too lazy, of course). I give you full permissions, as long as you credit the idea to my name. you can keep the money.

going through old mails

On sunday morning I leave for Gurgaon. This computer (which I’ve been using since IIMB days) will remain in Bangalore, and my mother will continue to use it. Just remembered that I have all my IIMB mail on this. And thought I should go through the lot. just for the heck of it. a few pertinent observations (I’ll keep putting in bullet points here as i go through the mailbox)

  • It seems in my first term at IIMB, my contact with the outside world (apart from parents) was minimal. Most email is from others at IIMB,and mostly acad related. And I clearly remember I’d stopped using my yahoo id then – the IIMB id was my primary ID
  • For some reason I can’t remember right now, I’d nicknamed Neha Jain as “Exception”. Of course I was to go on to later name her after a Mallu band, and that nickname happened to stick. And I’m still the only person who knows the real real reason why she’s called what she’s called. And I still plan to keep it a secret
  • God Sriram used to mail me fairly regularly back then. It’s kinda surprising now, but back then he seems to be the most frequent non-IIMB mailer to my IIMB ID. And in one mail he writes “Looks like the pertinent obs. are becoming vaguer and vaguer”. And for the uninitiated, it was God who had first come up with the phrase “pertinent observations”
  • My sense of humour back then seems quite weird – at least in hindsight. For example I wrote Ranga, who was studying in UMich saying “how many times have you drowned in Lake Michigan? And is it cold out there?”
  • I found this mail from Manish Chiddarwar which said “Hi, I wrote yesterday’s cluedo mystery. The intention was to have fun and not to hurt anyone’s feelings. I’m sorry if I took it too far. Regards, Manish”. This mail had been sent to Vikram Dua; Neha Jain; Arushi Nehra; Padam Chhabra; Venkataraman Aswath; Karthik S; Dawanchya Anita; Arnab Deb; Amitesh Rattan with a CC to Vinit Mahadevan. For context, please ask Kodhi. And kodhi replied saying “no hard feelings especially considering the fact that having wimpy for a son would make anyone proud”
  • A number of mails from friends back at IITM replying to my mails to them asking them to send proof of some “positions of responsibility” that i held at IITM
  • Muthu Mohon had sent a mail titled “Apex: Finally some progress”
  • Back in 2004, I used to start all my mails with a “hi!!”. somehow find that slightly rude now
  • Rachit Prasad had sent me a mail in early 2005, before he joined IIMB. He introduced himself thus: I’m a dig from Bangalore in IITM Mech who also stays in Banashankari, but in 2nd stage”

Ok I put NED now. Will publish.