Sunday, February 05, 2012
Movies
Seen 3 movies recently.
The romantic fantasy drama The Twilight Saga: Breaking Dawn was fun to watch as a reflection of teenage girls' fantasies about ideal mate. Curiously, it had one ideal male figure (Edward) for girls on pill, with soft demeanour and a sensitive interaction style. It also had a strong hothead (Jacob) to appeal to girls not on the pill and are on their period. I was also surprised by the obsession to make Edward tick all high status marker boxes.
Although it was not realistic, it was the only movie which dealt with serious topics (mate choice, sex, pregrancy a la Rosemary's Baby) and where human beings behaved according to human psychology. (The main reason I don't really like movies is that many make my "people just don't behave that way!" warning lights flash red.)
Action flick Sherlock Holmes: A Game of Shadows offered 2 hours of good entertainment, but I'm already forgetting the plot, which was too inconsistent to stay in memory. The central theme was 'steampunk Lord of the Rings', Sherlock was Gandalf, complete with a sneak into Mordor and meeting with Balrog.
Drama road movie This Must Be The Place told about a super wealthy former rock star. It had post-singularity feel, as most people in the movie had all their material meets met, and they mainly drifted in existential void, seeking ways to amuse themselves. Having no material competition left and not that much need for workplace style co-operation, they used disproportionate effort to control the frame of conversation and refuse to answer questions straight.
Saturday, January 21, 2012
Finnish presidential elections
The biggest foreign policy question facing Finland is the future of Eurozone.
Our elected representativescan guarantee junk bonds with 20% of our GDP have already pledged 26% of our GDP to junk bond funds, and allow European Central Bank to create 5% inflation with bailouts and quantitative easing.
The politicians can also say "no" to worst excesses, and keep Eurozone as a group of countries which are small enough to default individually; that is a stregth. Greece default means more evolution through trial and error and fewer single points of failure.
EU and euro have been positive forces thus far, but now I see more threats than opportunities in tighter integration.
During Finland's EU negotiations, Paavo Väyrynen demonstrated both ability to oppose EU and also pragmatism (unlike Timo Soini) to admit defeat after the vote had been cast against his views and join again the negotiation tables where decisions are made.
Our elected representatives
The politicians can also say "no" to worst excesses, and keep Eurozone as a group of countries which are small enough to default individually; that is a stregth. Greece default means more evolution through trial and error and fewer single points of failure.
EU and euro have been positive forces thus far, but now I see more threats than opportunities in tighter integration.
During Finland's EU negotiations, Paavo Väyrynen demonstrated both ability to oppose EU and also pragmatism (unlike Timo Soini) to admit defeat after the vote had been cast against his views and join again the negotiation tables where decisions are made.
Saturday, January 07, 2012
Helsinki, a nest of vice
Today I met a streetwalker for the first time in Finland, when walking in Helsinki city center at 2 am. After identifying her from stockings and small pants despite -7 Celsius, I made eye contact. "Hello little one", she said with thick accent. I grumbled "hello." She continued "is the little one feeling cold?", at which point I was already past her. Motherly context may not be the most effective at rousing the flames of passion, but probably she knows something I don't about the kinds of persons who actually pay up.
Someday, I'll lose my virginity after paying for it. I won't report it here, because maintaining privacy requires reciprocal silence. It won't solve my social skills developmental task, but it is actionable and it is remotely possible that I'll learn something useful in the process.
Saturday, December 31, 2011
Review of 2011 and goals for 2012
Review of past year's goals
Lose weight to 55kg (BMI 20.7): Failed. The weight bottomed at 56kg. Then I moved to Helsinki, fattening to 60kg during the 2 months I travelled 5 hours a day, leaving little energy for exercise and gulping beer on evenings to wash out the "can you be so pissed off you die" feeling.
Main events:
- Got fired.
- Got a new job from Helsinki.
- No longer working with a dying technology.
- Bought an apartment.
- Got cynical, noticing that the only effect from 4.5 years of work was the balance on my bank account.
- Studied investing to find out how to increase the balance without working.
- Made progress in pole dancing during the 3 non-work months.
- Had fun during 3 summery non-work months, and unparalleled amount of social interaction by participating in The Club's event. No new social skills milestones reached, though.
- Wrote a very early prototype of a teaching game for Chinese, and an unpromising business plan for productizing it.
- Noticed that I'm too lazy punk to develop it while holding a job, abandoning it.
Overall, I'll remember 2011 as the year I studied investing, it is the only change which will still have effect in 2021. Nothing much lost or gained in other fronts.
Goals for the next year:
- Diet to 55kg.
- Re-establish social life in Helsinki.
- Start a regular sports hobby to stay fit.
Sunday, December 25, 2011
Drum'n'bass evening@Venue
The biggest difference between Tampere and Helsinki rave parties are in security arrangements. At Venue, there were 4 security guards present, one of them huge freezer-refridgerator combination with tattoos. They had radio phones. At one point in the evening, one of them pimp walked into the bar room, shoulders wide, his whole body language screaming "I guard here!"
In Tampere, there were less guards, they tended to be regular guys - just taller, they didn't have special equipment and they mainly stayed on the background.
When exiting the bar at 03.45, police patrols and guards were visibly present around Kamppi. I took a taxi home, since the night routes of buses were cancelled for Christmas. When I mentioned the taxi driver about tighter security at Venue, he first emphasized that in his opinion any conflicts should be solved primarily by talking. Immediately after that, he played his part in reifying the badass violent reputation of security guards by telling how the steroid beasts have very short fuse, how a customer died in the hands of a security guard, and how he the taxi driver himself had 4 years of karate training.
Probably Helsinki night is more dangerous, as all night shifters feel the need to emphasize their capability for violence. I have to admit that I don't like Kamppi and railway station late at night. I wonder if it is due to diversity, or because larger density of people directly means larger amount of scum per square kilometer.
Wednesday, December 21, 2011
Sunday, November 27, 2011
The move to Espoo is now complete.
Wednesday, November 09, 2011
6.66%, the number of the Italian 10-year bond yield
Story thus far:
Fundamentals:
- Italy amassed public debt 120% of GDP
- Berlusconi focused on organizing bunga bunga parties
- Feeble attempts to balance the budget were met with mass demonstrations and political opposition
Market mechanics:
- MF global went bankrupt because their Italian bonds lost too much in mark-to-market value (value, which someone is ready to pay if they sold the Italian bonds now on market). MF used criminal ways and took reckless risks, so without Italian bonds they would have eventually found another tree to hang themselves.
- Jefferies, a financial firm, was suspected to be fatally exposed to Italian bonds. They disclosed information about their Italian bond ownership and also sold them. They turned out fine.
- Fire sales of Italian bonds to avoid scrutiny. Nominal Italian bond yield explodes. At least temporarily, yields are past the point of no return, after which savings and cuts no longer solve the problem, as interest accumulates too fast.
Rejected solutions:
- Italy balances budget - if they could, they would have already done that
- EFSF: European countries just don't have enough money to bail out Italy while staying solvent
Next steps:
- ECB prints money and causes high inflation
OR
- Eurozone turns into nineties depression historical re-enactment society
OR
- Italy converts debt to liras and devaluates
Thursday, October 20, 2011
Simo jumps out of burning platform
Sunday, October 02, 2011
A true story of grit in education and life: The complex analysis class of 1999
Summary: Grit is the character trait of persisting in the face of hardship. My high school class faced an unintentional test of grit. Life outcomes differ starkly between the 4 who passed and the 12 who didn't.
Duckworth's grit scale is a short self-assessment quiz for persistence, with questions like "I finish whatever I begin" or "I often set a goal but later choose to pursue a different one." It has been tested to work immensely well in the military:
(HT: Steven Hsu, Aretae)
Päivölä is a math-oriented high school. Before entry, candidates are screened for mathematical aptitude. The special sauce of the school were university-level math courses. Initially all 16 of us attended unimath. The school was still in formation: We were just the second boarding year-class there. Teaching was a bit shaky and there were few exercise sessions. Consequently students kept dropping out of unimath. The school was designed to teach the top as much as they could handle, so little was done to address those who dropped out. It was an unintentional test of grit: persisting despite woefully inadequate background and few exercise sessions.
In the last spring, there were 5 people in unimath: me, Vesa, Tuomas, Mikko and Jussi. The final course taught complex analysis. I was the last one who dropped out of unimath. At that point, 1/3 of the course had passed and I was completely dropping out of cart at lectures, not understanding much anything.
It was preceeded by 6-month limbo of linear algebra and calculus. During the limbo, lack of preliminary knowledge and mathematical maturity meant increasingly severe dropping-outs (not understanding anything about the taught topic). The first lecture where I completerly dropped from cart was about QR decomposition and numerically more stable way to solve linear equations, so complex analysis dropping-out was anything but surprise or whim.
This divided the class into 4 who passed the grit test, and 12 who didn't. It was not just about talent, because everyone had been screened at entrance.
CS lore describes programming students "hitting the wall" during teaching. Some understand the subject swimmingly, while others struggle even after explanations. Some consider this "IQ in action": Either you have innate ability to get it, or you don't, in which case you need a lot more exercise to learn it.
Little research has been done about this. Dehnadi and Bornat assumed that setting a variable is one such wall. They measure one's grasp of variable assignment with questions like below.

The students had not yet been taught programming, so it was enough to use any consistent mental model. For example, the mental model "assignment moves the values from left to right" produces answer "a=10, b=10". The consistently wrong need to learn just one thing to get all correct.
44% answered the test consistently, and the test predicted well if the students would pass or fail their first programming course(*):

(*) Some attempts to replicate failed to find correlation, and a meta-analysis with improved test protocol found clear but weaker correlation.
The first time I hit it was at a physics lecture. A visiting Russian lectured about mechanics. Unlike in earlier lecutres, there were no numbers involved: the masses of the objects were m and M. I had all the required background (high school mechanics; math problems without numbers) but still couldn't answer a single exercise. Afterwards, I heard others commenting happily that at last someone was lecturing things properly. Before that, I had always been on the other side of The Wall, delighted to skip slack.
Out of the 4 gritty and talented ones, 75% are now in managerial roles. Vesa is a vice president at Pohjola Insurance. Mikko has worked for 6 years in various managerial roles in Nokia. Tuomas is an assistant professor and has 30 publications. The only remaining professional is Jussi, but he is quite short (under 160cm). Jussi still has a PhD degree, so he is not a total loser even by the yardstick of this group, unlike me.
Only 25% of the remaining 12 ones have done well in career. Jani already had industrial-strength programming skill when he entered the high school at age 15, so he was right to ignore the class. Tarmo and Tommidefy the complex analysis cutoff limit.
The grit scale
Duckworth's grit scale is a short self-assessment quiz for persistence, with questions like "I finish whatever I begin" or "I often set a goal but later choose to pursue a different one." It has been tested to work immensely well in the military:
Duckworth and her collaborators gave their grit test to more than 1,200 freshman cadets as they entered West Point and embarked on the grueling summer training course known as Beast Barracks. The military has developed its own complex evaluation, called the Whole Candidate Score, to judge incoming cadets and predict which of them will survive the demands of West Point; it includes academic grades, a gauge of physical fitness and a Leadership Potential Score. But at the end of Beast Barracks, the more accurate predictor of which cadets persisted and which ones dropped out turned out to be Duckworth’s 12-item grit questionnaire.
(HT: Steven Hsu, Aretae)
The complex analysis class of 1999
Päivölä is a math-oriented high school. Before entry, candidates are screened for mathematical aptitude. The special sauce of the school were university-level math courses. Initially all 16 of us attended unimath. The school was still in formation: We were just the second boarding year-class there. Teaching was a bit shaky and there were few exercise sessions. Consequently students kept dropping out of unimath. The school was designed to teach the top as much as they could handle, so little was done to address those who dropped out. It was an unintentional test of grit: persisting despite woefully inadequate background and few exercise sessions.
In the last spring, there were 5 people in unimath: me, Vesa, Tuomas, Mikko and Jussi. The final course taught complex analysis. I was the last one who dropped out of unimath. At that point, 1/3 of the course had passed and I was completely dropping out of cart at lectures, not understanding much anything.
It was preceeded by 6-month limbo of linear algebra and calculus. During the limbo, lack of preliminary knowledge and mathematical maturity meant increasingly severe dropping-outs (not understanding anything about the taught topic). The first lecture where I completerly dropped from cart was about QR decomposition and numerically more stable way to solve linear equations, so complex analysis dropping-out was anything but surprise or whim.
This divided the class into 4 who passed the grit test, and 12 who didn't. It was not just about talent, because everyone had been screened at entrance.
The wall of abstraction
CS lore describes programming students "hitting the wall" during teaching. Some understand the subject swimmingly, while others struggle even after explanations. Some consider this "IQ in action": Either you have innate ability to get it, or you don't, in which case you need a lot more exercise to learn it.
Little research has been done about this. Dehnadi and Bornat assumed that setting a variable is one such wall. They measure one's grasp of variable assignment with questions like below.

The students had not yet been taught programming, so it was enough to use any consistent mental model. For example, the mental model "assignment moves the values from left to right" produces answer "a=10, b=10". The consistently wrong need to learn just one thing to get all correct.
44% answered the test consistently, and the test predicted well if the students would pass or fail their first programming course(*):

(*) Some attempts to replicate failed to find correlation, and a meta-analysis with improved test protocol found clear but weaker correlation.
Hitting the wall
The first time I hit it was at a physics lecture. A visiting Russian lectured about mechanics. Unlike in earlier lecutres, there were no numbers involved: the masses of the objects were m and M. I had all the required background (high school mechanics; math problems without numbers) but still couldn't answer a single exercise. Afterwards, I heard others commenting happily that at last someone was lecturing things properly. Before that, I had always been on the other side of The Wall, delighted to skip slack.
Life outcomes
Out of the 4 gritty and talented ones, 75% are now in managerial roles. Vesa is a vice president at Pohjola Insurance. Mikko has worked for 6 years in various managerial roles in Nokia. Tuomas is an assistant professor and has 30 publications. The only remaining professional is Jussi, but he is quite short (under 160cm). Jussi still has a PhD degree, so he is not a total loser even by the yardstick of this group, unlike me.
Only 25% of the remaining 12 ones have done well in career. Jani already had industrial-strength programming skill when he entered the high school at age 15, so he was right to ignore the class. Tarmo and Tommidefy the complex analysis cutoff limit.
Monday, September 12, 2011
Too lazy to work, too chicken to steal
Summary: This post tells a formula for deciding when to quit your day job.
First we define Enough money. It is the monthly sum, which allows you to buy most things you want, so that not working increases your standard of living more than extra income from your day job.
Mortgage is such a huge factor that we exclude it from Enough and account it separately as Debt Costs. It covers both interest and repayments.
Secondly, we assume that investments are the basis of your new income. Investing is the only way to pay once and get money back for the rest of your life with minimal effort, either as dividends, interest or rent. Historically 4% withdrawal rate has proven robust. Even after you spend 4% each year, your pot still grows enough to resist inflation. We also assume 25% tax rate, which is the average of dividend and capital gains tax rates.
You can quit your day job when:
Debt Costs + Savings / 12 * 0.75 * 0.04 + Side Income >= Enough
Debt Costs + Savings / 400 + Side Income >= Enough
Notes about the formula:
First we define Enough money. It is the monthly sum, which allows you to buy most things you want, so that not working increases your standard of living more than extra income from your day job.
Mortgage is such a huge factor that we exclude it from Enough and account it separately as Debt Costs. It covers both interest and repayments.
Secondly, we assume that investments are the basis of your new income. Investing is the only way to pay once and get money back for the rest of your life with minimal effort, either as dividends, interest or rent. Historically 4% withdrawal rate has proven robust. Even after you spend 4% each year, your pot still grows enough to resist inflation. We also assume 25% tax rate, which is the average of dividend and capital gains tax rates.
You can quit your day job when:
Debt Costs + Savings / 12 * 0.75 * 0.04 + Side Income >= Enough
Debt Costs + Savings / 400 + Side Income >= Enough
Notes about the formula:
- You need to own 400 euros to get 1 euro of monthy income. 400 comes from multiplying the constant factors. Only with compound interest and lots of waiting is it realistic to get these kinds of multipliers.
- To get there quickly, you need side income schemes. For example €100 of monthly ad income from a blog corresponds to €40000 of savings. While writing interesting content is hard, it is probably easier than to save €10000/year for 4 years.
- Side income schemes also provide cover, if you have to explain, what you did for the past few years.
- Cheaper apartment speeds up the plan by years. There can be €100000 difference in apartment prices between Helsinki and Oulu city centers. If you value big city life, you probably prefer working to idle life in Oulu. Debt Costs depends very much on your lifestyle.
- If you are near retiring, you can withdraw more. Multiply your monthly pension by 400 to see how much less you need to own at retirement.
- If side income raises the sum past Enough, you should save the difference to gradually phase out the necessity of side income schemes. Otherwise, you either are not lazy enough for this plan, or have set Enough sum too low.
- Enough sum raises with inflation.
Sunday, September 04, 2011
Work and idleness 4/4: Individualist take
If it's not personal what you do for 40 hours a week, then what is? Individualism has two sets of attitudes towards work.
The ideal condition is to do what you love. This is based on the idea that you should express yourself and reach your potetial. Your unique life is an identity project, where you work towards reaching your highest potential.
For the rest of us, work is just a way to earn money. Self-actualization is pushed to leisure, for example holiday trips. Work is a little despicaple sign of slave mentality and lack of wealth, visible in phrases like "office drone" or "grease monkey". It is the opposite of life. How tough guy you are is measured by how much money you get, how much ass you kick and how little you give to others.
For both earners and self-actualizers, the impact of work on others is irrelevant.
Individualists admire people who have found "cheat codes of reality" and don't need to work, for example poker professionals, and also people who game the system to distribute income to them.
Societies embracing individualist attitudes run into problems, when having a work ethic becomes contemptible. Not everyone can be idle.
Most people seem to follow individualist work ethic. Citizens vote governments, which allow them to free ride on social benefits, which are never high enough. Governments take debt to fund social spending. Sovereign debt crisis follows.
The ideal condition is to do what you love. This is based on the idea that you should express yourself and reach your potetial. Your unique life is an identity project, where you work towards reaching your highest potential.
For the rest of us, work is just a way to earn money. Self-actualization is pushed to leisure, for example holiday trips. Work is a little despicaple sign of slave mentality and lack of wealth, visible in phrases like "office drone" or "grease monkey". It is the opposite of life. How tough guy you are is measured by how much money you get, how much ass you kick and how little you give to others.
For both earners and self-actualizers, the impact of work on others is irrelevant.
Individualists admire people who have found "cheat codes of reality" and don't need to work, for example poker professionals, and also people who game the system to distribute income to them.
Problem: Free riders
Societies embracing individualist attitudes run into problems, when having a work ethic becomes contemptible. Not everyone can be idle.
Most people seem to follow individualist work ethic. Citizens vote governments, which allow them to free ride on social benefits, which are never high enough. Governments take debt to fund social spending. Sovereign debt crisis follows.
Work and idleness 3/4: Transhumanist take
During the last 200 years, technology has lifted the Western masses from rags to affluence. The logical end of this trend is Iain Banks' Culture, where robots do all the work, but we are not there yet. Work should maintain and improve the standards of living and guard against risks like nuclear war, which may stop us from reaching singularity. Workers can be classified based on whether they advance this goal.
Maintainers keep the system running at current level. For example postal workers maintain capability to send packets, and soldiers guard against foreign army burning down the nation. We would notice very soon if these people stopped working.
Improvers make technological and political progress happen. For example researchers may develop a cure for cancer, or a politician may remove a wasteful regulation. We would notice big difference in 20 years if these people stopped working.
Leeches neither maintain or improve other people's standards of living. This includes not just people who live on income transfers (it doesn't matter if it comes from state or from dividends of inherited wealth) but also workers who have little impact. We wouldn't notice any difference if these people stopped working.
In the long run, more and more people can neither maintain nor improve standads of living better than robots. In that case it's ok to relax and take it easy, but anyone reading this blog can't use stupidity as an excuse.
Technology enables "hard" efficiency, for example food production no longer requires 50% of the workforce to labor at farms. This frees resources also to "soft" wants and needs, like better human rights, social safety net, education, healthcare etc. No matter if your values are hard or soft, efficiency powered by technology delivers it. (But it doesn't deliver relative wants, like being wealthier than the Joneses.)
Politics must ensure that greater efficiency does not translate into more efficient slaughter in gas chambers, etc.
Enlightenment and knowledge help spot opportunities to organize things differently.
It is practically impossible to talk with most people about transhumanist impact of work. It is too abstract topic for someone who usually talks about cars and apartments. Also most people only care about how much they and their ingroup get, making it heresy to talk about outgroup's interests. People with a mortgage and a family to provide for couldn't care less if a project produces nothing and it is clear from day 1.
Nowadays transhumanism is to me mainly quiantly naive idealism of the youth.
Maintainers keep the system running at current level. For example postal workers maintain capability to send packets, and soldiers guard against foreign army burning down the nation. We would notice very soon if these people stopped working.
Improvers make technological and political progress happen. For example researchers may develop a cure for cancer, or a politician may remove a wasteful regulation. We would notice big difference in 20 years if these people stopped working.
Leeches neither maintain or improve other people's standards of living. This includes not just people who live on income transfers (it doesn't matter if it comes from state or from dividends of inherited wealth) but also workers who have little impact. We wouldn't notice any difference if these people stopped working.
In the long run, more and more people can neither maintain nor improve standads of living better than robots. In that case it's ok to relax and take it easy, but anyone reading this blog can't use stupidity as an excuse.
Virtues: Efficiency and enlightenment
Technology enables "hard" efficiency, for example food production no longer requires 50% of the workforce to labor at farms. This frees resources also to "soft" wants and needs, like better human rights, social safety net, education, healthcare etc. No matter if your values are hard or soft, efficiency powered by technology delivers it. (But it doesn't deliver relative wants, like being wealthier than the Joneses.)
Politics must ensure that greater efficiency does not translate into more efficient slaughter in gas chambers, etc.
Enlightenment and knowledge help spot opportunities to organize things differently.
Problem: It's not possible to be the only transhumanist around
It is practically impossible to talk with most people about transhumanist impact of work. It is too abstract topic for someone who usually talks about cars and apartments. Also most people only care about how much they and their ingroup get, making it heresy to talk about outgroup's interests. People with a mortgage and a family to provide for couldn't care less if a project produces nothing and it is clear from day 1.
Nowadays transhumanism is to me mainly quiantly naive idealism of the youth.
Wednesday, August 24, 2011
Still haven't bought any stock
Summary: This post tells a formula for deciding if you should postpone purchases in times of a looming crisis.
Update: Added a paragraph on probabilities.
After I finished reading Saarion sijoituskirja, the Arvopaperi OMXH index showed that Finnish stock prices had moved -10% since 1.1.2011. I postponed purchasing stocks because of the following calculation. It had two scenarios:
(1) Greece crisis becomes acute with probability P(crisis).
(2) Orderly recovery happens with probability P(recovery) = 1 - P(crisis).
Let the change in stock prices be C(crisis) or C(recovery). We should postpone purchases if
P(crisis) * C(crisis) + P(recovery) * C(recovery) < 0
When Lehman Brothers collapsed, the prices decreased by 40%. Let C(crisis) = -40%. By contrast C(recovery) = 10% - 20% since recovery is usually slower.
We can pick stock price changes from historical data. Regarding probabilities, let's look at the equation at 0 when it doesn't matter whether we postpone investment or not.
P(crisis) * C(crisis) + (1 - P(crisis)) * C(recovery) = 0
P(crisis) * C(crisis) + C(recovery) - P(crisis) * C(recovery) = 0
P(crisis) ( C(crisis) - C(recovery) ) = - C(recovery)
P(crisis) = C(recovery) / (C(recovery) - C(crisis))
With C(recovery) = 15% and C(crisis) = -40%, the equation gives P(crisis)= 15% / 55% = 27%. This means that we should postpone investment, if we estimate that P(crisis) > 27%. We should invest now if we estimate that P(crisis) < 27%. It doesn't matter if we invest or not if we estimate that P(crisis) = 27%.
What in fact happened was that Greek crisis materialized but it was an orderly restructuring and prices collapsed only by 20%. The debt and the budget deficit are still simmering.
The situation now is almost the same, but the 'risk scenario' is 2008-style banking crisis. Only this time, goverments are part of the problem and no longer part of the solution. I'm still postponing investment.
If stock prices recover from current -30% to -10% in the next 3 months, then I suck at predicting and am better off investing to index funds. Stock traders divide profit to 'alpha' and 'beta'. 'beta' is the profit from market. You get beta profit from index funds, because stock prices on average rise with economic growth. 'Alpha' is the profit from skill. It is negative if you suck at predicting. Finding your own alpha by making successful and failed predictions is called alpha discovery.
Update: Added a paragraph on probabilities.
After I finished reading Saarion sijoituskirja, the Arvopaperi OMXH index showed that Finnish stock prices had moved -10% since 1.1.2011. I postponed purchasing stocks because of the following calculation. It had two scenarios:
(1) Greece crisis becomes acute with probability P(crisis).
(2) Orderly recovery happens with probability P(recovery) = 1 - P(crisis).
Let the change in stock prices be C(crisis) or C(recovery). We should postpone purchases if
P(crisis) * C(crisis) + P(recovery) * C(recovery) < 0
When Lehman Brothers collapsed, the prices decreased by 40%. Let C(crisis) = -40%. By contrast C(recovery) = 10% - 20% since recovery is usually slower.
Avoiding probability estimates
We can pick stock price changes from historical data. Regarding probabilities, let's look at the equation at 0 when it doesn't matter whether we postpone investment or not.
P(crisis) * C(crisis) + (1 - P(crisis)) * C(recovery) = 0
P(crisis) * C(crisis) + C(recovery) - P(crisis) * C(recovery) = 0
P(crisis) ( C(crisis) - C(recovery) ) = - C(recovery)
P(crisis) = C(recovery) / (C(recovery) - C(crisis))
With C(recovery) = 15% and C(crisis) = -40%, the equation gives P(crisis)= 15% / 55% = 27%. This means that we should postpone investment, if we estimate that P(crisis) > 27%. We should invest now if we estimate that P(crisis) < 27%. It doesn't matter if we invest or not if we estimate that P(crisis) = 27%.
How it turned out
What in fact happened was that Greek crisis materialized but it was an orderly restructuring and prices collapsed only by 20%. The debt and the budget deficit are still simmering.
The situation now is almost the same, but the 'risk scenario' is 2008-style banking crisis. Only this time, goverments are part of the problem and no longer part of the solution. I'm still postponing investment.
If stock prices recover from current -30% to -10% in the next 3 months, then I suck at predicting and am better off investing to index funds. Stock traders divide profit to 'alpha' and 'beta'. 'beta' is the profit from market. You get beta profit from index funds, because stock prices on average rise with economic growth. 'Alpha' is the profit from skill. It is negative if you suck at predicting. Finding your own alpha by making successful and failed predictions is called alpha discovery.
Sunday, August 07, 2011
Thursday, July 28, 2011
Prize for screening out mass killers
Legal weapons were used at Jokela and Kauhajoki school shootings and Oslo attack. The shooters had to get gun license first. The permitting process provides a checkpoint for screening out potential mass killers. Currently no effective screening exists to separate mass killers from the responsible and sane; therefore a prize is neeeded to give psychologists, criminologists and medical professionals incentives to create a test to screen out mass killers.
The prize would be based on pessimistic assumptions:
The Finnish permitting process already screens out 2/3 of the criminals who would kill.
Update: The author of the linked article got his statistics wrong. He compares people with gun license killing with guns they own against kills by people without gun license using all methods. Gun kills are just a fraction of all kills, so it is an apples-to-oranges comparison.
Rules for the screening tests:
How prize money would be distributed:
The institute administering the test would have to be international to get adequate sample size. It would also publish all physiological measures about the mass killers, and preferably also from other violent criminals and some voluntary controls without criminal record.
Without trying arrangements like this prize, we'll never know if modern psychology can screen out potential mass killers. What can be lost by trying?
The prize would be based on pessimistic assumptions:
- There are going to be more mass killings. Ways to prevent mass killings are not known.
- Special brain function is needed for the monstrous lack of empathy which enables mass killings without war trauma, or delusionality where the murderer thinks he is an action hero tasked with saving the world by killing masses of nameless goons.
- This brain damage may show up in hormone levels, genes regulating brain function, etc.
- Shooting back is an effective way to stop an ongoing mass killing, for example Hyvinkää shooting stopped after the police returned fire. Effective screening paves the way for responsible and sane armed population. Should mass killers move to illegal guns (most regular gun kills are already done with illegal guns in Finland) then damage control through concealed carry permits is the only effective measure.
Update: The author of the linked article got his statistics wrong. He compares people with gun license killing with guns they own against kills by people without gun license using all methods. Gun kills are just a fraction of all kills, so it is an apples-to-oranges comparison.
Rules for the screening tests:
- The tests can be based on any set of physiological measures like blood sample, genetic profile, saliva, urine, body height, etc.
- The tests consist of a scoring algorithm for calculating pass/fail and a list of physiological measurements.
- The tests can announce false positive for at most 10% of the population.
How prize money would be distributed:
- After a mass killer is caught alive or dead, available physiological measures are taken. This enourages tests, which can be performed on the dead like blood samples, genetic profiles etc.
- After each killing incident, 20% of the prize money is given for the tests which were positive for the killer. 80% remains in the fund for future killings.
- The number of false positives is inversely proportional to the prize money. For example, a test flagging 0.01% of the population earns 100 times more than a test flagging 1% of the population.
- Because of moral hazard, any research team with any links to the killer can't get prize money.
The institute administering the test would have to be international to get adequate sample size. It would also publish all physiological measures about the mass killers, and preferably also from other violent criminals and some voluntary controls without criminal record.
Without trying arrangements like this prize, we'll never know if modern psychology can screen out potential mass killers. What can be lost by trying?
Tuesday, July 26, 2011
About The Book
Summary: Breivik's book contains several fabricated statistics. This casts doubt on the truthfulness of his autobiographical claims.
ABB did not just reach wrong conclusion - namely, that political terror works. It doesn't. Even the Soviet communists who fought a civil war to gain power found terror strikes counterproductive.
His book is also worthless as a reference on the state of Islam and moral decay in Europe, as it is full of fabrications and factual errors. This is a pity as I'd very much like to see a well-researched "big picture" overview without liberal "don't worry, everything is ok" head-patting. I cross-checked some statistical claims about Finland.
The first claim which caught my doubt was the claim in p. 1173 that 35% of Finns get a sexually transmitted disease in their lifetime. Turns out that 15% of Finns had contracted an STD in their lifetime in 1992. Chlamydia was just as high in 1987 as in 2003, gonorrhea almost vanished and others are too small to meter, casting doubt on that 35% figure.
At p. 564, a table lists the Muslim share of the population for various European states. It claims that in 2009, 2% - 3% of people in Finland were Muslims. Wikipedia puts the estimate at 0.8% in 2006. This is a horrible mistake, as the whole book is about the Islamization of Europe
At p. 719, there is a discussion of social capital and trust, and claim that Norway, Sweden, Denmark and Finland top the list. This claim is true.
At p. 735, there is a table quantifying the levels of multicultural indoctrination in each country. The chapter doesn't tell how the numbers were calculated nor cite references. Conclusion: fabricated.
In p. 923, they put the level of Muslims in Finland at 2% - 4% of the population rather than 0.8%.
In p. 972, there is oil production amounts in different countries. The figure
is in line with an online source. Also other figures in this chapter seem factual.
At p. 1190, he claims that the "historic concentration of the Nordic genotype" in Finland was 85% at 1900, 75% at 1950, and 55% at 2010. Again there are no references or description of what is "nordic genotype". I seriously doubt if the genetic makeup of Finns has changed by 30% in 100 years. We haven't had that much immigration.
At p. 1223, there is a table listing countries in order of GNP. While the list seems genuine, it is interpreted wrong. He says "The International Monetary Fund ranking of the countries with highest GNP shows that the top 10 list is dominated by countries with an exceptional degree of social cohesion." The real conclusion from the table is that there are many ways to get high GNP per capita. 3 couuntries have oil. 3 countries have high social cohesion. Good capitalist economy has brough US and Singapore to the list. US is the antithesis of social cohesion and still on the list.
Conclusion: 2 figures don't match with official ones, 2 figures seem outright fabricated as there is no methodology mentioned, 1 is true but sloppily interpreted.
What about his autobiographical claims? In his communication tips, he emphasizes the need for social proof and looking good: "...it should be a priority to appeal to a broadest selection of European males. Resistance leaders/cell commanders or individual cell operatives must prioritise to arrange and book a professional photo session prior to operation for one or all involved. Resistance leaders of larger networks should also arrange photo sessions with female patriotic models to use in online marketing/recruitment campaigns."
And he sure looks good himself! It reads like straight from Mystery Method. He was a leader of men, running a software company in early 2000s and a distinguished WoW raiding guild in 2005. But the guild he named was actually established only in 2007.
His tribe was also preselected by women: "Although I have had a change of mentality a majority of my friends have not. My stepfather Tore, one of my best friends Marius and my more distant friends Kristoffer, Sturla and Ronny are all living manifestations of the complete breakdown of sexual moral. All five have had more than 300 sexual partners (two of them more than 700)."
Finally, he's protecting us, his loved ones, from the threat of Islam.
ABB did not just reach wrong conclusion - namely, that political terror works. It doesn't. Even the Soviet communists who fought a civil war to gain power found terror strikes counterproductive.
His book is also worthless as a reference on the state of Islam and moral decay in Europe, as it is full of fabrications and factual errors. This is a pity as I'd very much like to see a well-researched "big picture" overview without liberal "don't worry, everything is ok" head-patting. I cross-checked some statistical claims about Finland.
The first claim which caught my doubt was the claim in p. 1173 that 35% of Finns get a sexually transmitted disease in their lifetime. Turns out that 15% of Finns had contracted an STD in their lifetime in 1992. Chlamydia was just as high in 1987 as in 2003, gonorrhea almost vanished and others are too small to meter, casting doubt on that 35% figure.
At p. 564, a table lists the Muslim share of the population for various European states. It claims that in 2009, 2% - 3% of people in Finland were Muslims. Wikipedia puts the estimate at 0.8% in 2006. This is a horrible mistake, as the whole book is about the Islamization of Europe
At p. 719, there is a discussion of social capital and trust, and claim that Norway, Sweden, Denmark and Finland top the list. This claim is true.
At p. 735, there is a table quantifying the levels of multicultural indoctrination in each country. The chapter doesn't tell how the numbers were calculated nor cite references. Conclusion: fabricated.
In p. 923, they put the level of Muslims in Finland at 2% - 4% of the population rather than 0.8%.
In p. 972, there is oil production amounts in different countries. The figure
is in line with an online source. Also other figures in this chapter seem factual.
At p. 1190, he claims that the "historic concentration of the Nordic genotype" in Finland was 85% at 1900, 75% at 1950, and 55% at 2010. Again there are no references or description of what is "nordic genotype". I seriously doubt if the genetic makeup of Finns has changed by 30% in 100 years. We haven't had that much immigration.
At p. 1223, there is a table listing countries in order of GNP. While the list seems genuine, it is interpreted wrong. He says "The International Monetary Fund ranking of the countries with highest GNP shows that the top 10 list is dominated by countries with an exceptional degree of social cohesion." The real conclusion from the table is that there are many ways to get high GNP per capita. 3 couuntries have oil. 3 countries have high social cohesion. Good capitalist economy has brough US and Singapore to the list. US is the antithesis of social cohesion and still on the list.
Conclusion: 2 figures don't match with official ones, 2 figures seem outright fabricated as there is no methodology mentioned, 1 is true but sloppily interpreted.
Social proof
What about his autobiographical claims? In his communication tips, he emphasizes the need for social proof and looking good: "...it should be a priority to appeal to a broadest selection of European males. Resistance leaders/cell commanders or individual cell operatives must prioritise to arrange and book a professional photo session prior to operation for one or all involved. Resistance leaders of larger networks should also arrange photo sessions with female patriotic models to use in online marketing/recruitment campaigns."
And he sure looks good himself! It reads like straight from Mystery Method. He was a leader of men, running a software company in early 2000s and a distinguished WoW raiding guild in 2005. But the guild he named was actually established only in 2007.
His tribe was also preselected by women: "Although I have had a change of mentality a majority of my friends have not. My stepfather Tore, one of my best friends Marius and my more distant friends Kristoffer, Sturla and Ronny are all living manifestations of the complete breakdown of sexual moral. All five have had more than 300 sexual partners (two of them more than 700)."
Finally, he's protecting us, his loved ones, from the threat of Islam.
Saturday, July 23, 2011
Work and idleness 2/4: Conservative take
Someone needs to keep the wheels of modern society running. In conservative ideology, work is a burden and everyone has a duty to carry their fair share. This is achieved by (1) stigmatizing free riders and social bums, (2) exalting work and and by (3) making work tolerable and pleasant with institutions (for example work regulations enforcable in court) and social norms (for example 40-hour work week).
Warning Against Idleness in Saint Paul's 2nd letter to Thessalonians illustrates (1) and (2) perfectly:
The problem with the conservative position is that it no longer matches reality. The Finnish employment rate - the percentage of people aged 16 - 64 who work - was 69% in 2010. Let's assume that nobody under 16 or over 64 works, and that all age brackets contain just as many people, and that the average lifespan is 80 years.
We get that [ 16 * 0% + (64 - 16) * 69% + (80 - 64) * 0% ] / 80 = 41% of Finns work.
It is bullshit to claim that 59% of Finns can't work. My sister was getting paid for watching children as a young teen. I got my first IT summer which included some programming at age 18. But if you ask the credentialists, both work tasks absolutely require a college degree. Also in the countries where pensions are low, old people sure find stamina to work for some supplementary income.
People have made a collective decision to work less as most people get a nice standard of living anyway.
Warning Against Idleness in Saint Paul's 2nd letter to Thessalonians illustrates (1) and (2) perfectly:
... keep away from believers who are living in idleness and not according to the tradition that they received from us. ... we were not idle when we were with you, and we did not eat anyone's bread without paying for it; but with toil and labor we worked night and day, so that we might not burden any of you. This was not because we do not have that right, but in order to give you an example to imitate. For even when we were with you, we gave you this command: Anyone unwilling to work should not eat. For we hear that some of you are living in idleness, mere busybodies, not doing any work. ... Take note of those who do not obey what we say in this letter; have nothing to do with them, so that they may be ashamed. Do not regard them as enemies, but warn them as believers.
The problem with the conservative position is that it no longer matches reality. The Finnish employment rate - the percentage of people aged 16 - 64 who work - was 69% in 2010. Let's assume that nobody under 16 or over 64 works, and that all age brackets contain just as many people, and that the average lifespan is 80 years.
We get that [ 16 * 0% + (64 - 16) * 69% + (80 - 64) * 0% ] / 80 = 41% of Finns work.
It is bullshit to claim that 59% of Finns can't work. My sister was getting paid for watching children as a young teen. I got my first IT summer which included some programming at age 18. But if you ask the credentialists, both work tasks absolutely require a college degree. Also in the countries where pensions are low, old people sure find stamina to work for some supplementary income.
People have made a collective decision to work less as most people get a nice standard of living anyway.
Sunday, July 17, 2011
Work and idleness 1/4: The story of AZ
In Soininvaara's blog, alias "AZ" poked a beehive by admitting that he bums on last resort income out of his own choice, without any sickness or attempt to become employed. When reading this, my first reaction was "why in the hell am I slaving away at the company for 40 hours a week, when he gets for free 960e a month, which is less than I sometimes spent in the most busy months!? What's in it for me in being employed?"
The last resort income requires that you don't have significant property,for example a house; however, you can own a house. This is a possible lifestyle choice for someone who has paid his house already, and wants to drop out and commit hikikomori, expecting that life won't offer many opportunities anymore, for example for me if I fail to up my seduction skills by age 40.
Az says he has Asberger's syndrome and his explanations about philosophical research task reek mild crazines; this tunnel vision phenomena is familiar to me from the days of Finnish Annotator. Watch carefuly for it's cunning, devious bite if you ever become idle for extended periods.
In June, the housing benefit + last resort income was 959,11 euros. The rent 540. For spending 419,11 euros remain. The electricity bill is fully paid by social service agency. Water is included in rent. There are no medical costs, but they would naturally be fully compensated.
With 119 euros you can eat well foodstuffs like porridge, rye bread, carrots, pea soup, soy sauce, pasta etc. If I want to save for something, only those are necessary. It only costs a few euros to buy soap or bags for the vacuum cleaner. What could possibly be necessary expense for those extra hundreds of euros? What's so superhuman in saving them? In my opinion it would be alarming, if a healthy person couldn't live like that for a few months. I'm not addicted to cigarettes. In two months I saved 600 euros. That's a royal sum for example for wandering in Lapland, as I already have equipment from the previous trips.
I have so much experience on what it means to live on the above mentioned benefits and even with reduced benefits down to 250 euros a month that without some specific health issue which the state refuses to refund I simply cannot sign the claim about extreme material poverty of those who live on benefits. It simply isn't true.
The last resort income requires that you don't have significant property,
Az says he has Asberger's syndrome and his explanations about philosophical research task reek mild crazines; this tunnel vision phenomena is familiar to me from the days of Finnish Annotator. Watch carefuly for it's cunning, devious bite if you ever become idle for extended periods.
Sunday, July 10, 2011
Simo the unemployed
The writing was on the wall since Elop's announcement. Back then, the number of projects had already decreased. I had plenty of time to sketch scenarios. The only surprise was timing: the customer was still paying my salary when I got laid off last week.
Plan A: Get a Java programming job from Helsinki
Why Helsinki? My brother and sister moved there within a year. There are 10 times more open programming positions in Helsinki than in Tampere.
Why Java? It was already going strong in 2007 when I was searching the previos job. It is likely to stay relevant also to 2015. Even if Java becomes obsolete, the whole web stack from SQL servers to browsers won't change in one punch. Java is my second strongest language after POSIX C / Symbian C++. The wanted skills in the job ads are suprisingly similar as in 2007 - SQL, Hibernate, Spring, JSP, JSF and various application servers are still going strong - and only Liferay and jQuery are completely new.
Actions taken: Sent job applications, got some books on jQuery and J2EE.
Plan B: Play time by starting a company
The basic idea is to warm up some leftovers from the website I developed in 2005-2006, but with much clearer goals and much better focus on what I am going to sell and to whom. The software would be distributed as an applet which runs in browsers.
The first phase is to develop a free prototype with limited content, to put it online and advertise it a bit. This way, I would find out the number of users a month. With reasonable assumptions about the conversion rate (how many visitors would buy the full version) this gives an estimate of market size and income potential. Is there enough demand for me to make a living out of it?
If there is no demand, then I would get a real job. If there is mediocre demand or the data is ambigous (most probable scenario) then I could spend 6 - 12 months developing the full version. The upfront initial investment would be paid back over many years as a trickle of side income. This way, I could play time until the Finnish IT job market clears out after 1500 laid-off Symbian engineers from Nokia and comparable amount from subcontractors.
Because of Plan B, I have almost no incentive to get a new job quickly. The only thing I want but can't do on income-based unemployment benefit is to buy a house in Helsinki.
Actions taken: I've been unemployed for 4 days and have been developing the prototype in 3 of them.
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