Leak-proofing Your Intuition Pump

Massimo has an interesting item out on how metaphors can be misused in science, with some useful ideas on how to use them effectively.  From Footnotes to Plato:

While discussing some sections of a paper I wrote with Maarten Boudry, we have seen a number of reasons why using machine-information metaphors is bad for science education. As I pointed out before, the full paper also devotes quite a bit of space to arguing that those metaphors haven’t been particularly good in actual scientific research. One of the fascinating things to watch after I posted the first part of this commentary was the number of people who vehemently defended the “biological organisms are machines” take, both here on the blog and on my Twitter feed. It’s like here we are, in the second decade of the 21st century, and there are still a lot of Cartesians around, who have apparently never heard of David Hume. Oh well.

Massimo doesn’t throw the baby out with the bathwater – of course. Metaphors, after all, are some of our most useful intuition pumps.

The Key to Keynes (Or, Applying Kahneman to Markets)

The CFA Institute’s Enterprising Investor publication has a good piece on applying behavioral finance, per Kahneman, to investment decision-making: “The Active Equity Renaissance: Behavioral Financial Markets,” by C. Thomas Howard and Jason Voss.

In effect, it explains why Keynes was right when he wrote, “Successful investing is anticipating the anticipations of others.”

Financial markets are populated by human investors burdened with emotional baggage and associated cognitive errors. In a market context, these errors are amplified because, in the aggregate, they create herding, which leads to wild price swings. Rampaging emotional crowds cause extreme volatility of returns in financial markets. Look no further than equity market price bubbles for evidence of these rampaging emotions.

The article is one in a series that address, for a lay audience, important financial topics (e.g., whether volatility is an appropriate measure of risk) from a behavioral finance point of view. Good conversation starters.


via The Active Equity Renaissance: Behavioral Financial Markets | CFA Institute Enterprising Investor

Evidence mounts that smartphones kill. Literally.

Absinthe_LargePrint tweetTwo acquaintances and one guy I know in passing have overdosed on fentanyl- laced heroin in the past four months. They were acquaintances, not friends, despite our spending a fair bit of time together because 1) like Acheson said, when asked why he stuck with Hiss, I like to think my friendship is not easily gained or withdrawn, and 2) they spent at least 25 percent of our time together staring at their fucking smartphones. Boring.

One guy’s dead, the other was narcanned back to life by his dealer and is back at the scag.

These guys got me thinking that the correlation between increasing social isolation – exacerbated by the machinations of smartphones and social media succubi – and the opioid crisis might be, in part, causal. Here’s a new data point from Scientific American – The Social Life of Opioids. Juxtapose that with Has the Smartphone Destroyed a Generation from the Atlantic and mull it over.

If you can spare the attention.