Personal Savings, Financial Freedom

“The first thing to understand is the non-linear relationship between “cash in personal savings” and “financial freedom”:

There’s a line you cross where your savings alone will fund a reasonably lavish lifestyle. At the risk of sounding like George Bush, this is a Freedom Line — freedom from restrictions about what you can do with your life, family, and career.

My observations:

  1. A movement from left of the line to right of the line changes your life fundamentally, giving you the freedom to do whatever makes you happy, forever.
  2. If you’re crossing from left to right, it doesn’t matter how far to the right you go. (Sure, $100m is a different lifestyle than $10m, but it’s not as critical to lifestyle or happiness as just crossing the line.)”

(From https://blog.asmartbear.com/rich-vs-king-sold-company.html)

Ensemble vs Time Risk

“The conclusion of the book addresses why “ensemble risk” cannot be treated the same as “time risk.” The difference can be understood by considering a game of Russian roulette with a bullet in one of six chambers. The rules are that if the “house” pulls the trigger and you live, you get $6 million. If one hundred people play, we can say that the expected payoff for each averages out to $5 million. But we can’t say that the expected payoff for a single person playing one hundred times is $500 million. Instead, we expect, with near certainty, that he will be dead. And if he dies on the second trigger pull, he does not get to play the other ninety-eight times. This demonstrates why an individual cannot expect to get the “average” return from the market: at some point, he will lose enough that he will “cry uncle” and leave the market. Taleb contends that social scientists repeatedly confuse ensemble risk and time risk, leading to, for instance, their condemnation of risk aversion as “irrational.”The conclusion of the book addresses why “ensemble risk” cannot be treated the same as “time risk.” The difference can be understood by considering a game of Russian roulette with a bullet in one of six chambers. The rules are that if the “house” pulls the trigger and you live, you get $6 million. If one hundred people play, we can say that the expected payoff for each averages out to $5 million. But we can’t say that the expected payoff for a single person playing one hundred times is $500 million. Instead, we expect, with near certainty, that he will be dead. And if he dies on the second trigger pull, he does not get to play the other ninety-eight times. This demonstrates why an individual cannot expect to get the “average” return from the market: at some point, he will lose enough that he will “cry uncle” and leave the market. Taleb contends that social scientists repeatedly confuse ensemble risk and time risk, leading to, for instance, their condemnation of risk aversion as “irrational.””

(From https://mises.org/wire/under-skin)

Asymmetric Information and Entrepreneurship

“1. Signaling. When you look for a job you “signal” your ability to employers via a resume with a list of your educational qualifications and work history. Signaling is a fancy academic term to describe how one party (in this case someone who wants a job) credibly conveys information to another party (a potential employer).
2. Capable. People choose to be entrepreneurs when they feel that they are more capable than what employers can tell from their resume or an interview. So, entrepreneurs start ventures because they can’t signal their worth to potential employers.
3. Better Pay. Overall, when people choose entrepreneurship they earn 7% more than they would have in a corporate job. That’s because in companies pay is usually set by observable signals (your education and experience/work history).
4. Less Predictable Pay. But the downside of being an entrepreneur is that as a group their pay is more variable – some make less than if they worked at a company, some much more.
5. Smarter. Entrepreneurs score higher on cognitive ability tests than their educational credentials would predict. And their cognitive ability is higher than those with the same educational and work credentials who choose to work in a company.
6. Immigrants and Funding. Signaling (or the lack of it) may explain why some groups such as immigrants, with less credible signals to existing companies (unknown schools, no license to practice, unverifiable job history, etc.) tend to gravitate toward entrepreneurship. And why funding from families and friends is a dominant source of financing for early-stage ventures (because friends and family know an entrepreneur’s ability better than any resume can convey).
7. Entrepreneurs defer getting more formal education because they correctly expect their productivity will be higher than the market can infer from just their educational qualifications. (There are no signals for entrepreneurial skills.)”

(From https://steveblank.com/2018/04/11/why-entrepreneurs-start-companies-rather-than-join-them/)

Learning Through Hacking

“That hacking produces better comprehension than passive, linear reading fits with what we know about learning. Barbara Oakley, Herbert Simon, Cal Newport, and Anders Ericsson all describe how solid understanding emerges from active exploration, critical examination, repetition, and synthesis. Hacking beats passive reading on three out of four of these criteria:

  1. Active exploration: When you hack, you want to eventually produce a change in the codebase. This desire guides your path through the code. When you read passively you let the code’s linear flow guide you.
  2. Critical examination: When you hack, you evaluate existing code in light of the change you want to make. Deciding what to use and remove keeps you from accepting the existing system as canon. When you read linearly, you lack a goal against which you can critically examine the existing code.
  3. Synthesis: To change the program as you desire, you synthesize existing code with new code.
  4. Repetition: Neither hacking nor linear reading involve useful repetition, unless you treat your change to make like a kata and mindfully re-implement it multiple times.

Learning through hacking also leverages the natural structure of a codebase. Good books guide their readers through series of questions and their answers, but codebases are inherently non-linear, like a map. You can ask an infinite number of questions of a map. How far is it from A to B? Which is the nearest town to C? But you can’t expect a map to tell you what questions to ask, and it makes no sense to read a map linearly from top to bottom, left to right.

Reframing reading as ‘navigation’ suggests that our conventional discussions of clean code and interfaces ignore the things that actually make unfamiliar code accessible to outsiders. Clean, solidified abstractions are like well-marked, easy-to-follow paths through a forest — very useful if they lead in the direction we need to go, but less useful when we want to blaze arbitrary new paths through the forest.”

(From http://akkartik.name/post/comprehension)

Stories and Infinite Choice

“What about games that use a novel-world and its characters? The reduction of a novel to a game seems to me a basic error, a sterile attempt to crossbreed species. Games are wonderful things in their own right, and ought to be invented in their own right. Stories aren’t games, and the more they resemble them the weaker they are as stories.

The complex role games that are played jointly, and played to play, not to win, are excellent entertainment, but still, I don’t think they result in story — not without changing the rules from game rules to story options. Any game, to be a game, must limit the possible moves. Story is the product of a universe in which the choices, though they may not seem so, are infinite.

What about interactive fiction? Well, if you like it, fine. It seems to me essentially a social activity. Like game-playing, it can’t result in a work of art. Writers need readers, they collaborate in a sense with their readers; but to let readers control the story is to cease to be a writer in order to be a group facilitator or member. Fine, if that’s what you want to be.

If, however, you’re a writer, and have a story you want to write, the job is your responsibility. You’re not dealing with information which can be shared and passed around; you’re dealing with a vision — your vision. It’s up to you to capture that vision in words. Nobody else can do it.

Changing a story around at the readers’ whim is at best a game. (Making major changes in a story because an agent or editor wants it to be different is not a game, but the loss of the author’s authority — or authenticity, if you will; but that’s a separate issue.) The trajectory of a story, once found, can’t be fiddled with arbitrarily; if it is, it’s lost. A story is its own truth — a subjective truth. The story as work of art can exist only on and in its own terms.”

(From http://www.ursulakleguin.com/Note-ArtInfoTheftConfusion-Part2.html)

Problem Solving in Abundance vs Scarcity

“I’m writing this in 2016. Now we’re living in a future that most developers in the 80’s would not have imagined.

Today we store our programs in repositories that keep a complete copy of every version of every file, on each computer that uses that code. Today we avoid conflicts with the copies of programming languages like Perl, Ruby, Python and NodeJS, that are built into our operating systems by keeping personal copies of their entire toolchains, including libraries – and frequently multiple versions because specific applications that we use are pinned to specific versions of the languages they’re written in.

Persistent storage is so cheap that when NodeJS’ npm utility installs a dependency, it also installs all of the dependency’s dependencies. So if you have 23 dependencies that all depend on left-pad, you’re going to have 23 copies of left-pad installed. To an 80’s programmer this sounds awful – crazy wasteful, but it saves npm from Microsoft Windows-style DLL Hell.

We have so much storage, memory, CPU power and bandwidth at our disposal that with Vagrant we copy entire installations of operating systems to our computers and run them simultaneously with the computer’s native OS.

And blockchain – the new sexy in the tech world – is a cryptographically secure distributed journaled database (which means you have a very high level of confidence that its transactions are accurate and complete, that you can see its history, and that there are many copies). Back in the resource scarcity days you’d assume that “distributed” meant pieces of it were scattered all over the place. Distributed today means that everyone has a copy of the whole thing, which is kept in sync. Because storage and bandwidth are so cheap and plentiful, why wouldn’t you?”

(From https://romkey.com/2016/08/18/abundance-scarcity-problem-solving/)