Posts filed under “Philosophy”

On Executive Compensation & Wealth Transfer

Today’s QOTD:

“Middle-class America experienced a lost decade in their retirement accounts, whereas executives enjoyed record compensation packages through the subterfuge of stock option programs. There has been a massive wealth transfer from middle-class America’s retirement accounts to the bank accounts of the privileged few. The social consequences of this wealth transfer bear scrutiny.”

-Albert Meyer, Bastiat Capital (NYT)

For more on how executive compensation has run amuck in America, read Roger Lowenstein’s 2004 book, Origins of the Crash: The Great Bubble and Its Undoing.

Category: Corporate Management, Options, Philosophy

Tool’s Lesson on Fibonacci: Think ‘Laterally’

This was originally posted by Kent Thune at The Financial Philosopher.

Whether you are an investment trader, a music fan, a mathematician, a curious observer wishing to learn more about human nature, or any combination thereof, you will appreciate this lesson on the Fibonacci Sequence (more on this after the YouTube link):

The video, created by a college student to help explain the Fibonacci sequence, features images of space from the Hubble Telescope and music from the cerebral and progressive hard rock band Tool.  What makes the video and song incredibly compelling is the lyrics, which teach a lesson on pattern recognition.

For those non-traders and non-mathematicians out there, a Fibonacci sequence is a series of numbers where, after two starting values, each number is the sum of the two preceding numbers.  For example, the number sequence 2, 3, 5, 8 and 13 are a Fibonacci sequence (2+3=5, 3+5=8, 5+8=13, and so on).

Making the video and song more interesting is that the cadence of the lyrics (number of syllables of succeeding verses) follows a Fibonacci sequence.  What’s more, the meaning and lesson of the lyrics implies that humans are hopelessly addicted to looking for patterns everywhere they turn:  The “over-thinking” and “over-analyzing,” as the lyrics suggest, have an effect of dulling intuitive thought and often results in missed opportunities.

Pattern Recognition: Strength, Weakness or Both?

Philosopher and mathematician, T.L. Fine, once said, “A keen eye for pattern will find it anywhere.” This profound statement is neither a compliment nor an affront to humankind but it suggests that a fundamental awareness of the human tendency for pattern recognition allows for a healthy balance of intuitive thought and science.

Pattern recognition is a means of making sense of randomness.  This search for understanding, which is rooted in the desire for control and safety, can be self-defeating.   Wanting to find patterns can be considered thinking “inside the box,” but the answers are not always in the box.  Additionally, being comfortable without having answers can often open doors to new ideas, new opportunities and success.  Therefore asking questions is more important than having answers.  As 19th century philosopher and spiritual leader Jiddu Krishnamurti once said, “Freedom from the desire for an answer is essential to the understanding of a problem.”

Balance Linear And Lateral: Seek But Remain Open to Discovery

Returning to the message within the Tool song, aptly named Lateralus, too many people think and live linearly (in straight lines, black and white, inside the box), whereas thinking and living laterally (randomness, color, outside the box)–embracing the unknown–is healthy.

Perhaps the wisest solution is to balance the linear with the lateral.  There is no stopping your nature to seek and find patterns; and to eliminate this nature is nothing less than attempting to become something other than a human being.  Just be aware of your nature, and its potential limitations, and you’ll open doors to intuitive thought–expand beyond the narrow-minded linear thought–balance responsibility with adventure–seek but remain open to discovery.

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Kent Thune is an investment adviser, free-lance writer and blog author of The Financial Philosopher, where his philosophical musings guide readers to think independently and to place “meaning before money, purpose before planning.”

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Category: Philosophy, Psychology

Birthdays and Investment Risk

Birthdays and Investment Risk By John Mauldin April 4, 2011 > “Tail risk (the risk of large losses) is dramatically underestimated by many investors and the tools we have available to manage such risks are hopelessly inadequate. Financial theory which is taught at business schools and universities all over the world is plainly wrong.” This…Read More

Category: Investing, Philosophy, Quantitative, Think Tank

What is Consciousness ?

Cool stuff from Information is Beautiful: > click for interactive version

Category: Philosophy, Weekend

What is the Half Life of Your Favorite Technology?

I mentioned this on Bloomberg early this morning, but its worth exploring further: What is the average half life of your favorite technology? We operate under the false assumption of substance and solidity, when in reality, things are deeply in flux. Everything changes, nothing lasts. The various technologies we use are physical manifestations of ideas,…Read More

Category: Cycles, Philosophy, Technology

How To Have A Rational Discussion

Thought Catalog explains how to have a Rational Discussion: > Hat tip Simolean Sense

Category: Philosophy, Psychology, Science

Stumbling, Imperfectable Creature Like Ourselves

Quote of the day from the piece From Hiroshima to Fukushima. > “The problem is not that another backup generator is needed, or that the safety rules aren’t tight enough, or that the pit for the nuclear waste is in the wrong geological location, or that controls on proliferation are lax. It is that a…Read More

Category: Energy, Philosophy, Psychology

Music Industry = Egypt

Interesting quote of the from Bob Lefsetz: EGYPT: “We were there first, music fans already revolted.  They killed not only the album, but the major labels.  We’re living in an era of chaos.  To complain is to be Mubarak.  The audience was oppressed for too long, given an opportunity to go its own way, it…Read More

Category: Music, Philosophy, Technology

Friday Philosophy

A bit of Friday philosophy: Most of us will morph through different phases of our life, as we grow and live and learn. Its not quite a caterpillar to butterfly metamorphosis, but it represents specific changes in what we know, do, feel and think. A little introspection, perhaps some insight gleaned through hard work and…Read More

Category: Philosophy, Weblogs

Once again, with feeling: The most over-analyzed, over-emphasized, least-understood data point of the month comes out today. I guess we could probably add “over-traded” to that list. Why do am I critical of how we discuss this point? Consider these reasons: 1) The overall trend in hiring is what matters, not a single snapshot 2)…Read More

Category: Data Analysis, Employment, Philosophy