Weltanschauung

The Philosopher’s Stone

zenothestoic@protonmail.ch

Category: The Human Zoo

  • Why I do not read the News

    Why I do not read the News

    I do not read the news because it is repetitive, dispiriting, boring and irrelevant.

    Ecclesiastes 1:9
    What has been will be again,  what has been done will be done again;
    there is nothing new under the sun.

    This quote is profound to my mind and sums up the very reason I have never, ever been interested in current affairs or politics.

    According to an article in Wikipedia “The subjects of Ecclesiastes are the pain and frustration engendered by observing and meditating on the distortions and inequities pervading the world, the uselessness of human deeds, and the limitations of wisdom and righteousness.”

    Well said whoever wrote those words.

    Here is an abbreviated list of world news headlines from the BBC  for today:

    • NY’s top lawyer quits amid assault claims.
    • Belgian singer dies days after comeback.
    • Pope Rihanna dazzles at Met Gala 2018.
    • Revolutionary leader win Armenia PM vote.
    • Melania Trump faces new plagiarism row.

    Here is what I would rather read about, although I will have to look beyond the media to find anything of interest or relevance:

    • How to improve human behaviour.
    • How to abolish poverty, hunger and disease.
    • How to increase happiness.
    • How to further knowledge.
    • How to transcend the limits of human consciousness.
    • Cheerful news as to the progress by anyone in any of the above!

    And then there are a few who by luck or design have managed to jump off the hamster wheel of mundanity and have the good fortune and luxury to seek answers.

    Who is it then that reads newspapers and watches CNN? It can’t be those struggling for basic physical survival.  It must be the unconscious ones.

    Some of the unconscious ones must have good motives for what they do.  Some politicians must (one hopes) be genuinely interested in the good of others.  Some businessmen must be genuinely interested in improving mankind’s lot by producing fairly priced goods or services.

    There is a good argument to be made that the unconscious improve all our lives by their very busy unconsciousness.

    By pursuing their dreams of world domination in business or politics perhaps such people create the wealth necessary for research and development.

    And yet I have a nagging thought at the back of my mind that all is not well with the world.  That a better order is possible, that loftier goals should be sought.

  • Racism

    Racism

    Racism is most often and probably correctly thought of as a modern phenomenon.  It is not that it has not existed in ages past – simply that it is now criminalised and socially unacceptable.  We live in an age of political correctness.

    While not acceptable, racism is nonetheless explicable and must be seen in context.  It must be viewed in an historical and anthropological framework if we are to make any sense of it.

    We tend to think of racism as black versus white hatred, we tend to think in terms of skin colour and ethnicity.

    Racism was a normal and everyday occurence in the not so distant past. In the days of empire terms such as “wog”, “slope” and “nigger” were commonplace and in the 19th century well through to the 20th white western europeans and americans would routinely look down on and despise people they considered as mere savages.

    But it was always a two way street. The “looked down upon” would often feel mutual hatred and loathing of the white colonialists.  Not without cause perhaps.

    In 1986 I was living in Tokyo and had a white English male friend who had a local Japanese girlfriend.  Her parents considered my friend “white trash” – racism always cuts both ways. In the East we were “gweilo” (“foreign devil” ) and “gaijin” ( “outside person”, “alien”, “Non-Japanese”).  Both term have a history of racially deprecatory use.  We were (and probably still are) called “roundeyes” (a derogatory, ethnic slur).

    Today’s Guardian Reader would not of course see the argument, but racism occurs when tribe meets tribe. Especially when one tribe is seen as the invader.

    Racism in current Britain is explicable by a feeling of panic amongst the locals that their territory and way of life is being taken over.  Tribalism, territorial rights, fear of the outsider: it is all perfectly explicable.  Again and as usual it is Darwinian, a perceived (or perhaps real) struggle for survival.

    What is not at all easy is how to manage or overcome it. As I have argued elsewhere, nobody “owns” planet earth.  Land ownership is an absurdity when you think about it: why should a single owner or “nation” have the right to exclude anybody from any section of spaceship earth? We all need air to breathe and land upon which to build shelter and grow our crops.

    We live on a grossly overcrowded planet and population control (voluntary!) might help. But it would not cure narrow tribalism. That will only be cured by education and understanding and the eradication of vast gaps between rich and poor. A more equal and understanding society may emerge if our economies become more aimed towards co-operation and mutual help rather than aggressive asset accumulation and greed.

    Above all it would be nice to eradicate hatred and violence from the dictionary. But don’t hold your breath; and we are all, collectively, to blame.

  • The Salesman

    The Salesman

    Is the “salesman” grubby and embarrassing by definition?  Are they all oily, bumptious and crooked? From the seller of second hand cars to to those who peddle rugs are they all tarred with the same brush? Insincere and self important, is the salesman is out to short change you?  Are they all name dropping two faced asses?

    No, I don’t think they are but when you come across a bumptious fool and one of the bad ones, get out of his way swiftly, run quietly home and lock the door.

    Both characters were fairly harmless by comparison with some examples one may have to deal with.  Salesmen and charlatans (all too often interchangeable terms it seems) have been with us down the ages.

    One could forgive them if they were merely trying to do an honest day’s work (and most of them surely are).  But sometimes you are plagued by a salesman who is so truly awful he gives the entire “profession” a dirty name.

    He will claim that black is white, he will lie until he is blue in the face. He will be so full of bullshit and sheer arrogant nonsense that even he has difficulty taking himself seriously.  He will take a few terms of art pertaining to professions in which he has never qualified, mix them all up in meaningless, mangled sentences and try to convince you he is right and you are wrong.

    All the while dropping names of the great and the good to whom he has recently paid homage (or, in his dreams, they to him perhaps).

    The most important things in his life will be trips in private jets, helicopters and yachts and he will worship famous names be they politicians or “bizniss men”, showbiz or royalty.  He will bask in reflected glory.

    If that were all he did he might be forgiven.  But he can be out to swindle and put down all around him.

    The vast majority of salesmen do a good job and an honest day’s work.  But if you come across the sort of fool I have been describing, then run and don’t look back. Whatever else you may do, do not engage him in conversation.

  • Why Write a Blog

    Why Write a Blog

    I write because I enjoy writing and to educate myself.  It helps my own understanding of my cranky pet subjects as I try to convey my enthusiasms to my non-existent audience.

    It is highly probable that I will never make a cent out of it but then I find commerce, salesmen and “busy-ness” so indescribably sordid I’m not sure I care. Especially at my age.  Sure, it would be nice to generate some revenue – nothing wrong with that. But advertising and aggressively pushing product is somehow so utterly vulgar and distasteful.

    So I have taken a different course.  If there are books or films I have read and enjoyed I feel no guilt or embarrassment about adding a link to Amazon.com but I certainly don’t want to promote any old tat or to cover my blog with vulgar and thoroughly irritating commerce.

    Equally I feel pretty ambivalent on choosing content for an “audience”:  I will write exactly what I want to write, no more no less. If anybody wants to read it, fine. If they do not – well that’s equally fine. I do not imagine there are hordes of the faithful wishing to hear my cranky and often rather obscure or bad tempered thoughts.

    Self education and self awareness are an important part of it for me. I have been searching for answers to difficult questions my entire life and those answers will come, if at all, by a relentless and dedicated search for truths.

    I am aware that I very often get carried away by what I can only describe as mysticism.  I get carried away by a feeling of awe when I finally understand harmony, or meditate on a mountain or in a lonely Norman Church.

    But my awe is not a religious one. Yes, in a broad sense it is certainly spiritual but not in the sense of some religious nutter or new age fanatic. I would indeed love to hear the voice of god but my god is a very different one. Awe and wonder are to be found in excess in the natural physical world and I believe the universe is strange and wonderful enough without the need to imagine forces any more mysterious than we can discover by rational scientific enquiry.

    Those forces are numinous enough and it is my strongly held conviction that conscious beings will eventually achieve powers and knowledge which would make them godlike anyway.

    So yes, I am writing about subjects which interest me and its largely “scientific” enquiry by an ignorant laymen into the wonders of the universe.  If that sounds arrogant and intolerant – well it probably is. At heart I’m a grumpy old hermit who has lost any desire to “fit in” with what most people would call “normality”.

     

  • Invest or Gamble?

    Invest or Gamble?

    A search of Amazon UK produces just 12 books containing the word “random”, appropriately located in the “Science and Nature” section. “Randomness” produces a more satisfactory 520 results.  “Complex Adaptive Systems” produces 407 results.

    But now for the real fun. Gambling: 19,574 results.  Trading systems 2,292. Trading 30,806. Speculation 4,607.

    Turning to Google, “systematic trading” produces close to 6 million results.  “Gambling systems” comes up with over 13 million results.

    According to Wikipedia, gambling is the wagering of money or something of value (referred to as “the stakes”) on an event with an uncertain outcome with the primary intent of winning money or material goods.  Gambling is usually associated with the idea of getting rick quickly.

    Investments on the other hand “are generally not considered gambling when they meet the following criteria:

    • Economic utility
    • Positive expected returns (at least in the long term)
    • Underlying value independent of the risk being undertaken”

    Investment and gambling meet very neatly in the now vastly overcrowded field of trading systems.

    Conventional investment is itself fraught with risk and uncertainty.  Randomness and chance may just be overcome if you look for real assets which produce income or have some intrinsic value.  Real property is not riskless but at least in the short term (geologically speaking) it does not disappear.  Unless stolen by invaders or a communist government.  Equity participation in a broad range of businesses over a wide geographical area should prove a reasonable choice barring a nuclear holocaust. Ditto high grade debt instruments.  Wide diversification is about all you can do and it is not difficult these days, given the burgeoning supply of stock market index trackers.

    And then you have trading and trading systems.  And the get rich quick scams and scammers.  The division between investment and gambling becomes much less clear.  Even as a non-mathematician, there is much value to be had in reading the more accessible books on such topics as randomness and chaos.  And to at least gain some basic concept of statistical distributions.

    Such study is most unlikely however to turn you into a successful gambler (is there such a thing?); and that is what most traders are, systematic or otherwise.  But if your efforts convince you of the long-term futility of such activities you will indeed have made a valuable discovery.

    We are all looking to get rich quick. We are all looking for something for nothing. But few of us will succeed and even fewer will be able to retain the short-lived gains.

    I light-heartedly tweeted to Jack Scwhager: “Where are your Wizards now?”  Bluntly speaking it would appear that Wizards are those who by natural ability, hard wok and perhaps a little luck come across some little exploited structural opportunity in markets and then milk it for all it is worth while the phenomenon lasts.

    NM Rothchild made a fortune after Waterloo from insider dealing.  Many hedge funds have done the same ever since, despite the fact it is now illegal.  David Harding, bright and hardworking Wizard behind Winton, exploited trend following over decades but now concedes its glory days are over – too many people are crowding out the trade.  The high frequency traders and arbitrageurs look to have done themselves a terminal injury by overcrowding as well.  Once such people made vast fortunes front running, spoofing, arbitraging; low volatility and greatly increased competition may be bringing the Midas factor down to a more pedestrian level.

    And other Wizards may have had more than a little luck, particularly those who take vast macro bets based on their analysis (fundamental or otherwise) of financial markets.  For a few, the luck lasts.  The rest either crash and burn or dwindle as they become unable to find opportunities in increasingly open and competitive markets.

    Ironically, public interest blossoms (no, explodes) when it is all but too late to profit.  Untold thousands of internet sites offer courses in algorithmic trading, astrological stock forecasting, technical analysis and much else.

    A number of such people are obvious con artists.  A number are talented mathematicians or computer scientists who would better benefit society and themselves by applying their undoubted skills to a more achievable object than speculation.

    Gerolamo Cardano was able to win at games of chance since he was one of the first to understand the modern mathematical discipline of probability.  Harding and countless others spotted trend following early enough to made huge gains and attract an institutional following.

    If you do not or can not spot some angle which no one else has spotted then do not pass go.  Take off your gambling kit and refuse to join others in the futile dance of financial death to the non existent end of the rainbow.

  • Where are the Customers’ Yachts?

    Where are the Customers’ Yachts?

    Where are the Customers’ Yachts? is an essential and witty read for anybody who thinks finance, stock broking and fund management are respectable professions dedicated to increasing the wealth of their customers.

    The unfortunate truth is that Wall Street and the City of London are staffed by cynical sharks whose only true interest is in lining their own pockets by robbing yours.

    There are decent people around and some decent investment ideas but all you need these days is a small handful of index trackers.

    If you are an investor you also need to read this: A Random Walk Down Wall Street.  One of the more sensible investment books around – there aren’t very many.

    Markets are random and unpredictable – don’t let anyone tell you otherwise. I have no idea whether stock markets will provide an all in return of 8% a year over the next 100 years as they have in the past but if they do, then all you need to do to participate is to buy one fund: a simple index tracker covering world stock markets.

    Oh, plus a shortish term global sovereign bond fund if you want to mitigate volatility and drawdown. And rebalance annually.  More stocks = more volatility and drawdown, more bonds = less volatility and less drawdown.

    Industry standard has long been 60% stocks and 40% bonds rebalanced annually.  If economic growth continues then you don’t need much else to participate.

    I do not give investment advice – so go and see your stockbroker. Sadly he is unlikely to recommend anything so simple as this. He is the guy who gets the yacht – not you.

  • The Absurdity of Land Ownership

    The Absurdity of Land Ownership

    How has it come to pass that a tiny handful “own” the vast majority of this tiny spaceship we call the Earth?

    We live on a rock rotating at 1,000 miles an hour on its axis and circling a nuclear furnace we call the sun at around the same speed.  We have no means to escape to another planet (even assuming we could find something suitable) and we are bunched up like 7 billion rats in a cage cutting each other’s throats for food, light, shelter and water.

    It is reckoned that two acres of land would suffice for self sufficiency and there are estimated to be 16 billion acres of habitable land on earth.

    So given that spaceship earth has to provide sustenance for us all how come we have let a small minority own the vast majority of land on earth?  Is private ownership of our very means of survival a defensible proposition?

    And how about water? And energy?  How come the means of production and supply are in private ownership? How does it make any sense at all that the few should hold the many to ransome?

    Well I guess it is all about ethnic cleansing across the millennia.  “They” have what “you” want and so you exterminate them. In the old days extermination was free for all and quite the way to go: the Norman Conquest, the indigenous North and South American Indian and on and on…….

    Nowadays we in the West tend to frown on actual extermination (at least in our own back yard) but we allow death by commerce instead. Amazon destroys the little guy with a corner shop, factory farming screws the peasant, oil and timber companies evict the natives in the rain forest. So its business as usual.

    What will happen when we conquer space and find some green and pleasant land in the sky? The same old thing of course: the Robber Barons will own Mars and every other planet.

    Down with greed and violence (physical and commercial).  It is time to reform and re-organise our society.

  • Poverty in an Infinite Universe?

    Poverty in an Infinite Universe?

    Scientists tell us that the universe is infinite and contains infinite matter and yet we are still faced with overwhelming poverty and suffering on a global scale. How can this happen?

    The universe is a giant Lego set: everything is made of the same building blocks and we are rapidly learning how to create different materials from scratch by combining atomic structures in new ways.  Equally we now know that the alchemist was correct: we can turn any form of matter into any other form by re-arranging the lego blocks.  Eventually we may even be able to turn the lightest elements in the Periodic Table into the heaviest: hydrogen to gold or plutonium.

    So there you have it: you can take hydrogen (the most common element in the universe) and turn it into a loaf of bread or a kidney dialysis machine.  If the futurists are right, then at some stage in the hopefully not too distant future, we will have the ability to satisfy the hunger of every empty belly and cure every disease and ill.

    But look what science and industry has so far achieved for us. Yes, there has been a trickle down effect but we have inequality on an obscene, epic scale.

    The problem is that our economic and political systems have taken Darwinism as their model. Survival of the fittest; grab all you can for yourself.  So every time a new paradigm opens up before us, it swallowed by sharks whose power, greed and ambition ensures that it will be patented and owned by a tiny minority.

    The internet should have helped to spread peace and prosperity: instead it gave us Amazon and Facebook and a repressive bunch of clowns in countries like China who smothered it or perverted it for their own gain.

    Blockchain was devised by a crew of idealists who assumed a distributed ledger would put the man in the Congo on a par with the man in Silicon Valley.

    Instead Blockchain is being monopolised by the usual genre of greedy and venal “entreprenooooors” and “thought leaders” to line their own pockets.

    And so it will continue until we grow a whole new ethos, a whole new economic and political model.

  • Don’t Go Down the Rabbit Hole

    Don’t Go Down the Rabbit Hole

    “Alice was beginning to get very tired of sitting by her sister on the bank and of having nothing to do…..when suddenly a White Rabbit with pink eyes ran close by her. Alice started to her feet, for it flashed across her mind that she had never before seen a rabbit with either a waistcoat-pocket, or a watch to take out of it, and burning with curiosity, she ran across the field after it, and was just in time to see it pop down a large rabbit-hole under the hedge.

    In another moment down went Alice after it, never once considering how in the world she was to get out again.”

    Charles Lutwidge 1898, better known by his pen name Lewis Carroll went to Westminster School and Christ Church College Oxford. When I have dinner in the magnificent “Harry Potter” dining hall, I usually take time to stare up at the beautiful “Alice Window”.

    What does it mean to “go down the rabbit hole”? According to one source it is to enter into a situation or begin a process or journey that is particularly strange, problematic, difficult, complex, or chaotic, especially one that becomes increasingly so as it develops or unfolds.

    That definition is an excellent one.

    I cannot prevent myself from disappearing down the rabbit hole whenever the opportunity presents itself and nor would I wish to. One of the great advantages of age (I

    am 62) is that some of us come to know ourselves. I certainly have. I am not always very pleased with what I have found but at least I have done my best in recent years to lessen my very worst characteristics. I’m not so convinced about the plasticity of the brain but I do my best to act as if it were true.

    My interest is in “knowledge”.

    My particular fascination is in the nature of consciousness and the “meaning” (or otherwise) of reality. It has always been so, although I did not always recognise it. If it is to be found anywhere the answer lies in science and the philosophy of science. While the number may not be 42, the “Answer to the Ultimate Question of Life, the Universe, and Everything“, will indeed be calculated by an enormous supercomputer. Except of course “Unfortunately, no one knows what the question is.”

    If I had to name a single book I have found most influential in my life it would be David Deutsch “The Fabric of Reality“. Followed perhaps by Voltaire’s Candide. I will leave my readers to figure out why or read the books for themselves.

    So, let me give a concrete example. I had been trading volatility. I disappeared down the rabbit hole and am still speaking from an underground labyrinth. The trouble is of course it never really stops. I spent months with Python and Excel creating various trading systems. I spent weeks recreating volatility indices and ETFs.

    And then I took a dark turn down the options fork somewhere deep, deep down in the rabbit hole.

    I bought VIX options data from CBOE. I spent weeks understanding it, cleaning it up and manipulating it into a useable format with Pandas and Python. I spent more weeks designing and testing all manner of options systems on the data. Could I use options to hedge my short volatility position in XIV? And then the chaos and madness really set in. I decided to try and fabricate “fake” options data from the spot prices of the S&P 500 index. More weeks of intense fun with the wonderful Pandas (thanks Wes McKinney you are one of my heroes). Endless hours of fun playing with Black Scholes, monte carlo, binomial models.

    But no time is truly wasted unless you really want to make money fast. It lead me into deep speculation on my favourite topics. Predictability, randomness, determinism and on. As did my endless months experimenting with machine learning. The small minority of followers who have “followed” this article so far will be wondering where the ramble ends and what is my point. Well it’s back to philosophy I fear. And the temple of Appollo at Delphi. Socrates said that the unexamined life is not worth living – a gloss perhaps on “know thyself”. I know myself: I know that I love rabbit holes.

    Happiness is being fully engaged in something you find fascinating.

    Looking out at the blogosphere I suspect that those who create great wealth from finance are people who do NOT go down rabbit holes. Or if they do, then they are people who are sensible (or clever enough) to make the journey pay. And kudos to such people. Perhaps the biggest problem in the financial world is that a large percentage of its population is made up of people who would not recognise a rabbit hole if they were to break their leg in one. And such people have no interest in disappearing down it.

    And as for me? Well I’m just an aging cynic. I trade a bit, I scribble down a few thoughts. But mostly I disappear down the rabbit hole for months at a time.

  • Right Honourable Gentlemen

    Right Honourable Gentlemen

    There can hardly be a sight so little edifying as the Right Honourable Gentlemen of the House of Commons in full debate.  One has to be thankful we have debate I suppose, and that we do not have to suffer “Putin on The Ritz” as do the modern serfs in the 21st Century Russian Empire.

    We are all monsters.

    But still, the sight of His Right Honourable Bigness from Self-Important-Smugness-in-The Marshes really isn’t much fun.

    Before the advent of televised debate one may have been forgiven the assumption that dignity and decorum prevailed in the sacred debating chamber here at the epicentre of democracy.

    Not so. It is every bit as vicious in there as a meeting of the Parish Council or the Women’s Institute. Bossy self important people score points off each other using ridicule and scorn. And apparently they are paid to do so by the people foolish enough to elect them.

    I’m afraid it all goes back to the origins of violence.

    However good natured and pacific we may be as individuals, get us in a crowd and we turn into monsters.  The will of the people be damned – Not In My Back Yard thank you!

    There may not be much to be done. Given the platform and the provocation most of us would probably behave in exactly the same way.

    We may think we are different. We may hope so. But like rats in a cage, when the chips are down it seems we humans will fight to the death for self interest and a place on the Titanic’s last remaining lifeboat.

    Unfortunately none are blameless. We may become irritated in church at sickly smiles or the petty pecking order, we get road rage, our family can irritate us to death.  Awareness is certainly a help. Thinking and pausing before you speak another. Or delaying sending that email for an hour.  Can we change our minds? Can we become nicer people? Opinion is very divided but it does no harm to try.