Monday, March 31, 2008

Rural Adventures (Part 2)

Do you take your internet for granted? Do you know how many megs of data do you download every day? When you go to ESPN.com and they're streaming video ads and SportsCenter clips, do you even think about the megabits that you're downloading?

Probably not. You pay a monthly fee, and it's all free from there. Zero marginal cost so download all you want.

But, what about people in rural communities or less-developed countries?

My parents can't get high-speed internet where they live, in rural Western KY. Time Warner has yet to extend to their area. Cingular has 0 bars in their house. The telephone lines aren't good enough for dial-up, you can't even get a 28.8k connection with a modem. My parents aren't poor, but rural Kentucky as a whole is pretty poor and the infrastructure reflects this.

So, my dad and his neighbor decided to split the cost of using satellite internet.

They use HughesNet, which competes with BlueSky and similar companies. (BlueSky has run out of connections for this area, but HughesNet offers connections all over the world).

To get 1.5 Mbps speed, you have to pay $80/month, plus $300 for the satellite, modem, and installation.
This is expensive anyway, but then there's another catch: with the 1.5Mbps plan, you can only download 425 MB per day. So, my dad pays $40 and theoretically gets about 212 megs per day to himself.

If you surf a lot, and stream YouTube videos, ESPN ads, etc. you will use up your bandwidth VERY quickly. The punishment for this from the internet provider is 24 hours of severely reduced bandwidth. You'll feel the wrath of 56k internet.

All the companies have this basic caveat.

When thinking about development, either in the U.S. or internationally, many people try to find ways to link poor people to the Internet. This increases access to information, makes people smarter, etc. But, this is expensive. Knowing that Eastern Kentucky is in a worse situation than Western KY, I suddenly feel for the people who are too remote to have internet access. The internet that is available to them is too expensive to use. I know that ex-Governor Fletcher started an initiative to get all the rural areas access to the internet, but didn't quite succeed.

3rd world countries have the same issue. A nation's entire access is usually entirely dependent on satellites. If a satellite connection goes down, the country is left in the dark. I saw this in Moldova and Azerbaijan quite a bit.

But, that's an aspect of life in rural America that I hadn't thought about before and you might not have either.

Sunday, March 30, 2008

Rural Adventures (Part 1)

We're weekending at my parents' place just outside Eddyville, KY home of Ty Rogers, the kid from Western Kentucky who hit "the shot" to beat Drake.

Both sides of my family put on a baby shower for Joni on Saturday in Madisonville. My dad and I dropped her off, then we went on our own adventure: to find our roots. (NO, we did not see Hillary Clinton who was in town, though we drove past the school where she was speaking.)

I mentioned before that our future son Elias is partly named after Eli Tapp, one of the first Tapps to settle in West KY from Virginia & North Carolina in the early 1800s. Eli's grave is in a Tapp Cemetery somewhere in remote Hopkins County.

With some GPS coordinates and Google Maps, we found the location online and drove out to the boonies. We eventually found the cemetery, an old rod-iron fenced in location in the middle of a cornfield. We hiked through the field and made our way into the cemetery, long overgrown by weeds. Click the pic to enlarge and see the structures in the far distance.

Here are some pictures of Eli and his first wife Sarah Lunsford's gravestones. Eli was born December 7, 1797 and died May 9, 1852.

One of his children's families are also buried in the cemetery. Here's a picture of dad outside the cemetery.

We also drove a good ways into Webster County to find one of Eli's brother's grave, in another remote Tapp Cemetery. While unsuccessful, the long drive was a reminder of how much land was owned among the Tapps back in the 1800s. The majority of Hopkins and Webster, and a good deal of Union and Henderson counties were owned by Tapps.

It was fun to trespass on someone's cornfield to see the grave of my great, great, great grandfather in the land of the Tapps.

Wednesday, March 26, 2008

Basketball Wednesday- Coaching Ratings!

Long overdue are the 3rd annual Tapp Coaching Ratings. If you've forgotten how this works, I've measured coaching performance from 1998 for every coach that's won a championship, plus a couple others. I created a formula to calculate the TCR: (Winning % * 100) + (2 * Tourny Performance) + (3 * NBA 1st Round picks). Divide this by the # of years coached from '98-'07.

Tourny performance is as follows: 1 point for making the NCAA, 2 for the 2nd round, 4 for Sweet 16, 8 for Elite 8, 12 for Final 4, 16 for Runner-up and 20 for National Champ. -5 points for not making the tourny. In order to get credit for a first-round draft pick, the coach had to recruit and coach the kid. So, Bill Self has yet to put many of his own recruits in the draft.

Like John Hollinger at ESPN, this formula is shamefully arbitrary and simply reflects what I think coaches are measured by. That said, we can apply the formula to the coaches and see how it has changed from last season:

1. Coach K
2. Roy Williams
3. Tom Izzo
4. Jim Calhoun
5. Billy Donovan
6. Tubby Smith*
7. Lute Olsen
8. Gary Williams
9. Mark Few
10. Bill Self
11. Jim Boeheim
12. Rick Pitino

* Randolph Morris counted toward Tubby this season since he wasn't drafted but was signed 1 week after the tourny ended by the NY Knicks, and was considered to be a first-rounder had he been draft eligible.

The formula reflects consistency. Donovan and Calhoun have won 2 titles each over this span, but their teams have been wildly inconsistent, with trips to the NIT. The top 3 coaches, Tubby Smith, and Mark Few have yet to miss the tourny during this span.

Billy Donovan passed up Tubby Smith after last year's championship run and draft bonanza. I will add Ben Howland and Thad Matta to the list next year.
Coach K is way ahead of everyone. Bill Self will likely jump much higher after this season's tourny run is over.

Tuesday, March 25, 2008

Book Review (#10 of 2008)

How can we give poor kids a million bucks? Is Wal-Mart evil and would Jesus shop there? Why are gas prices so high? Is liberal Massachusetts a more family-friendly place than the South? Should Christians care about global warming and the environment? What about illegal immigration?

Good Intentions: Nine Hot-Button Issues Viewed Through the Eyes of Faith is co-authored by a Christian economist and a journalist.

The economist happens to have been a mentor/colleague of mine at Baylor, Dr. Charles North. Dr. North is an economist lawyer, a very smart guy. He helped me with some of my projects at Baylor even though I never had him for a class. I could always go to him with questions.

This is a simple and very easy-to-read look at some political/economic issues. Some simple explanations and some attempts to look at both sides of the story, while maintaining the importance of what the Bible says.

I give the book 4 stars of 5. It doesn't have a bibliography, which makes it a pain to look up all the sources it cites. It also assumes global warming is man-made and leaves out some important arguments about the costs of illegal immigration. I would recommend it for church small groups as well as social work students who have never had an economics class. It should lead to great discussions. More info can be found on the book's website.

Poignant Post

A U.S. soldier and Iraq blogger wrote this post today to mark the 4,000 soldier death toll in Iraq and I thought it was well-stated so I'm linking to it. Here is an excerpt:

It was supposed to be "a cakewalk." It was supposed to be a "slam dunk." But it hasn't been. Instead, I've watched marriages crumble, family bonds erode, and human minds slide into decay and instability. Meanwhile, the civilized world hems and haws. It urges us to leave, urges us to stay "for the troops." Let me tell you this: the jump to fifteen-month tours wasn't done at my request. And our Vice President be damned, nobody who "volunteered," as he so callously reminds us, ever volunteered to die. And all the while, the exceptionalists who sold us this bloody venture go on to posh jobs in the corporate sector, and write self-serving memoirs designed to absolve themselves of any blame.

Monday, March 24, 2008

Fooled by Randomness- March Madness edition (how to fill out your brackets...again)

A few weeks ago I reviewed a book by the same title as my post that had changed my life. Apparently, it didn't change it enough for I found myself and thousands others fooled by the randomness that is the NCAA tournament.

There are a lot of websites out there trying to help you fill out a more accurate bracket. Everyone is looking for a pattern or statistical explanation to previous tournaments to help them predict outcomes of future tournaments. I joined the quest and, judging from the emails I've received from PhDs, students, and other bracketologists, I did so much more rigorously than others out there.

In the book, Taleb decries some use of econometrics as quasi-science. He talks of Wall Street traders who spend long hours looking for any correlations between prices and other events, ranging from the weather to economic variables. Taleb is convinced that there is some price out there whose changes are correlated with the temperature changes in outer Mongolia. Of course, the 2 aren't related-- the relationship is purely random. But, many traders will invest based on these things like it's a sign from God.

Taleb makes the point that sometimes there are so many underlying and unrecorded factors that it's hard to say that past data is useful in understanding anything.

And so it is with NCAA tournament performance. This why the odds of predicting a 100% accurate bracket are somewhere between 1 in 2.1 billion to the trillions depending on who you ask.

Don't get me wrong the "tempo-free" data analysis is right on the money in evaluating team and player performance and is more useful than the dribble from Digger Phelps and Jay Bilas. There's a lot that fans and coaches can learn from it. It's just not useful in predicting tournament wins.

One website put data from a couple sources into a Monte Carlo simulator and simulated the games 10,000 times. According to it, the odds of Siena, Villanova, and San Diego all winning in the first round on the same day were 0.6%. The odds of the entire tournament coming together like it has are approaching astronomical (like it does every year). Do you know what it's called when astronomically improbable events occur? RANDOMNESS.

Of course, these games were simulated using data from the season. I question how rare these events actually are, because as Taleb writes, perhaps past events shouldn't determine the likelihood of an event in the future.

I see this with the point spreads. I started out tracking the predicted point spreads as reported and averaged by Tbeck. Just about every game in the last 2 days of tourny play have been several standard deviations beyond the mean prediction. And this is using "reliable" sources like Sagarin's Pure Points which supposedly get more accurate as the season goes on.

The analysis of past data told me that Davidson, Butler, St. Mary's, and Drake were all really good teams. If you were going to use that fact and choose some upsets, you'd go with them. But, only Davidson really did squat and pulled the "upset." And it upset a Georgetown team that past data told me was underrated itself. Siena, San Diego, and Villanova shouldn't have won. But they did. There's no explanation for this other than randomness. Basketball games have too many unobserved, unquantifiable human factors that go into them to predict accurately.

So, here's my suggestion for filling out your next bracket:
Flip a weighted coin. Go to BracketScience or Wikipedia or someplace and find out how many times each seed has won their game in the first round. Find a computer program to generate a 1 or a 0 based on those odds, like flipping a weighted coin. Fill out the bracket with whatever number it randomly generates. Then, fill out the 9 more you're allotted on ESPN to increase your chances of randomly getting a more accurate bracket than others.

So, will I do my regression analysis and forecasts next year? You bet! Because it's fun, and interesting, and I've made new friends doing it.

Sign of the Times

On Hardin Valley Rd. in Knox Co., we'd seen signs advertising a covered bridge and I'd always wanted to visit it. So, yesterday after a good Easter lunch we decided to drive down the road and see the bridge.

Turns out Covered Bridge is just the name of an exclusive subdivision. They've built a covered bridge over a stream as the park entrance to the subdivision. It's a very expensive development outside the edge of civilization in Knoxville. A Google search reveals that there was no historic bridge there, the developers just decided to do something quaint and I fell for thinking that there was actually an historic bridge.

So, on the way home we were on a country road (that will very soon be stripmalls and more subdivisions leading to the Covered Bridge) and we passed this sign. Click to enlarge.

Friday, March 21, 2008

Lessons from Pizza Hut

Yesterday was my last day. I saw the manager possibly making a drug deal out the back door in the morning. I was ominously warned to watch my back. So, when quitting time came (2 hours later than promised) I was relieved.

Most of the jobs I've worked since age 16 have been low-skill jobs with people who might have a high school education, at most. In Lexington, the job market was such that (10 years ago) it was hard to find a job paying less than $7/hr. In Waco, it was pretty easy to find $7.50/hr in manufacturing. Here, minimum wage is the standard everywhere (it goes up to $6.85 in July). The new Wal-Mart is hiring cashiers at $8/hr, so it's seen as the best way out.

John Scalzi said:
"Being poor is having to live with choices you didn't know you made when you were 14 years old. Being poor is people who have never been poor wondering why you choose to be so."

Many of the people at Pizza Hut are single mothers who have been abused their whole lives. Sadly, they are still being abused at work but have simply learned to live with it. They might complain, but they don't leave outright because they have nowhere else to go. Many have seen several manager changes and each new manager apparently brings his/her own abuse. They seem to find comfort in the knowledge that all of them are going through the same thing.

The hard part was that I saw how managers who were a little more clever than their workers could take advantage of them (sometimes illegally), particularly the less-intelligent ones--coercing them to work an extra shift by threatening them, shortchanging them on their delivery run money, even outright not paying them.

For example, one cook wasn't put into the timecard system until 4 days after he was hired. He was told that they'd make sure his first 4 days were accounted for on his paycheck. They didn't, and he's still trying to get his money.

For me, they said they were out of I-9 and W-4 forms, and to wait until "tomorrow" to fill them out. Knowing what this would lead to (no paycheck), I printed them off the internet and gave them to them myself after a couple days of "tomorrow"s. They seem to know when a new worker won't be around long, so they try to milk that worker for whatever they can.

The veteran employees have enough clout not to get taken advantage of, and sometimes the managers are afraid of them because those employees have the dirt on them. Newer and more naive folks like myself are seen as easy targets.

These folks don't know much about the economic forces that affect them, or about politics. They don't really have the time or luxury to know or care. At the Pizza Hut, the difference between a regular worker and a manager is just a dollar an hour ($7 vs. $6). If you have multiple kids and don't get timely child support (which is only about $100/month in some cases) then you're still heavily reliant upon food stamps and the EITC.

In the end, all of my co-workers asked me not to leave because they saw I was a hard worker, willing to do whatever was asked, and that I treated them fairly. They knew that I also understood their plight. I didn't go behind their backs, and was usually pretty likable. But, all of them told me that my job wasn't worth it and that they all wish that they could leave too.
It bothered some of them to see how the manager could take advantage of me and try to cheat me. But, they'd seen it so often that they'd just gotten used to it. The lesson they gave me was that if you can afford to leave the Pizza Hut, you should do it ASAP. They all want to but, for whatever reason, they just can't leave.

Thursday, March 20, 2008

You Know You're in East Tennessee When...

We live and work in Clinton, TN. Population: 9409.

You Know You're in East Tennessee When...


Everything is bright orange and has a UT on it. Everything everywhere. People don't actually keep up with the sports teams that much, the bright orange is more like an American flag is for everyone else.

You Know You're in East Tennessee When...

You have a conversation that goes like this:
Coworker: Do you smoke?
Me: No.
Coworker: Why not, what's wrong with you? (implying I have some physical ailment to keep me from smoking)
Me: Nothing. Um, it's just too expensive to smoke these days.
Coworker (looking at me like I'm crazy): Well, duh, that's why I only smoke the cheap ones!

Everyone smokes here. Everyone. We've met people who quit smoking temporarily b/c they were pregnant. Joni's WIC counselor almost hugged her when Joni told her she'd never smoked. They'd never heard anyone say that before.


You know you're in East Tennessee when...

You see a bumper sticker with the Confederate flag on it that says "My forefathers fought the first terrorists." And you see it and others like it quite frequently.

You know you're in East Tennessee when...

You see a sign for a church called Old Way Baptist Church, under which is written: "Walk in the old way, where is the good way."

You know you're in East Tennessee when...

People look to Wal Mart for their (economic) salvation, and see it as a sign of blessing on their community.

You know you're in East Tennessee when...

You have this conversation:
Coworker: "You got any ladies?"
Me: Uh... what?
Coworker: "Do you got ladies?"
Me: Uh...well, I'm married.
Coworker: "No, I mean ladies. For the salad."
Me: Oh, you mean lettuce?
Coworker: "Yeah! Ladies!" ("lettuce" sounds like "ladies").
Me: No, I ain't got any.

Wednesday, March 19, 2008

Quitting my Job

So, on Friday I'm quitting my job at Pizza Hut after 2 weeks of working there. Why would someone do this?

Well, one of the 10 Principles of Economics is that rational people think at the margin. When the marginal cost of an action exceeds the marginal benefit of the action, you don't take the action.

1. I've not become enamored with Clinton, TN and have decided that we should leave here ASAP.
2. I get $1 for every delivery run, be it 1 mile or 15 miles. The $1 is supposed to pay for the gas. Gas is $3.14 a gallon.
3. 1/2 of my deliveries are uphill. During rain storms my tires spin out and the 1-lane roads are just unsafe. 1/5 of my deliveries are to houses with long, steep, or washed-out gravel driveways. So, the punishment on the car is also not worth the $1.
4. I have to constantly worry about getting shortchanged by my managers.
5. I have to constantly worry about being stolen from by my coworkers and managers.
6. The manager of the store is a liar, a cheat, and an alcoholic. See #4 & #5 above.
7. The Pizza Hut has a terrible reputation, has terrible sales numbers, and will likely close within a year barring some drastic change. See #s 4-6 above.
8. I have been working the day shift and sometimes only see a couple deliveries. This means very few tips to supplement the $1 I'm paid for gas.
9. I burn myself every day on pans and hot water. This becomes annoying.
10. I can't think of a 10th thing... so, we'll just stick with 9.

The benefits of the job are the cash tips that I don't have to report and the ease of the routine during downtimes.

So, costs outweigh the benefits. Time to move on to something else. Hopefully. Prayerfully. Soon.

Tuesday, March 18, 2008

How to Pick Your Brackets

So, for the past two years I've been putting together data about the teams entering the NCAA tournament the past 4 seasons. About 60 different variables, every stat you can think of and more.

By using regression analysis and a Tobit model, I have now made an econometric forecast for this year's tournament outcomes based on the profiles of this year's teams.

I'm told my model will be published on BracketScience.com. Hopefully, this will be the start of a second career for me. Since nobody wants to pay me to do econometric analysis I do it anyway on my own for fun.

How does this work?

Well, suppose you had a sort of reverse BracketMaster program, where you could enter in the various historical attributes of teams and how well they did, and let the program figure out which attributes correlated significantly to a team’s performance in the tournament. You could see how those attributes correlated wins holding everything else constant. Attributes such as Effective FG%, Defensive TO%, age of the team, experience of the coach, etc.

Now, suppose you could tell the program the attributes of this year’s teams and it would tell you how many games you could expect each team to win. This is basically what I did.

How did it turn out? Send me $5 and I'll tell you. Or pay $20 to see my bracket on BracketScience.

It's my personal effort to have a completely data-driven bracket, no emotions whatsoever! I have to give a hearty thanks to the head of a certain Economics department at a Big 12 university for generously helping me out. Also a thanks to Jared for reminding me that my adjusted R-squared matters. Thanks to Joni as well for checking my model's predictions for previous tournaments, and also bearing with the countless long hours of working on this both at home and at the office.

Given the attributes and their magnitudes, the model successfully predicts 81% of games the previous 4 years, with 11 of the last 16 Final 4 teams.

I can tell you that the data says that this will be the Year of the Midmajor. Look forward to some big-time upsets and both of my alma maters being in the Sweet 16. It's not what I think; it's what the data say.

Saturday, March 15, 2008

Pizza is Expensive

When you think about eating an expensive dinner, what comes to mind? I think of fillet mignon , or an Outback steak, or a fancy Italian restaurant. What is expensive when buying a meal only for yourself? $10? $20? $30?

My personal thought is if I'm paying more than $12 for a meal for myself it had better be all-you-can-eat, preferably a buffet like Ryan's or Golden Corral. (can I get an amen?)

Delivery pizza is an expensive meal. You don't often think about it as such, but it is.


I think half the time people don't expect the pizza they're ordering to be as expensive as it ends up being and are surprised to hear the total. I heard one caller cancel an order today after he ordered a triple-cheese with extra toppings and heard it would cost him $30.

Cases in point:
Yesterday, a customer ordered a medium pizza. Now, I can polish off a medium in one sitting without problem, and most college-aged guys I know would need 2 to be satisfied.

He ordered it half and half, which immediately doubles the price. He ordered 4 toppings for one half, and 4 for the other. This counted as 8 separate toppings. Plus, he ordered a special sauce for one side. It's about $2 per topping and sauce.

He also ordered a 2-liter of Pepsi, which is $2.50. There is also a $1.50 delivery charge.

Total price: $28.95. For one medium pizza.

His was my last delivery of a long, stormy and foggy night in East TN. I accidentally grabbed a Diet Pepsi for him instead of a Pepsi. I also wasn't given credit card receipts for him, which meant he had to awkwardly sign the plain receipt.

So, I got no tip. His apartment was about 5 miles from the Hut and the Hut gives me $1 to make that trip. So, I felt bad about missing his Pepsi, but his apartment was about 1/2 mile from the nearest convenient store where he could have gotten a 2-liter Pepsi for 69 cents.

Today, a woman used a coupon to order a $12.99 large pizza "made just how you like it!" Actual price of the large pizza: $21. She wasn't pleased when I showed up on her doorstep and needed that amount from her in exchange for the pizza.

Her mistake: The limit is 3 toppings to use the coupon (read the fine print)... she apparently ordered 4, and thus her coupon didn't give her $12.99... oh, plus the $1.50 delivery charge and sales tax.

I see this over and over throughout my day. $30 for 2 medium pizzas. $30 for one large pizza, etc.

The store has seen sales slacking in recent weeks. There are many factors that could contribute to this. But, I wonder if it isn't the slowing economy and higher food & fuel prices and people realizing they have an elastic demand curve for delivery pizza.
Friends don't let friends get delivery pizza. Just trust me (and Troy per yesterday's comments).

Thursday, March 13, 2008

(Under)employed


Yep, I'm Pizza Hut's newest employee. I make $6/hr plus tips, so it's not technically minimum wage. I was hired as a "driver," thinking that's what I'd be doing, but most of the time there's not much driving to be done and I do whatever needs to be done.
Yes, the uniform makes me look fat (the shirt is one size too small but is all they had). I also dislike the odd hat, Joni says it looks like a do-rag. I think it makes me look like a punk and judging from the look on their faces, the customers agree.

It's given me a lot of material for a post coming soon entitled "You know you're in East Tennessee when..."

How I've changed: I don't think I will ever let my family order pizza from anywhere ever again. You shouldn't either. Trust me.

Wednesday, March 12, 2008

Basketball Wednesday - Dean Oliver edition (Book Review #9 of 2008)

Basketball on Paper by Dean Oliver is a MUST read if you're a basketball fan of any era. Dean Oliver is an NBA scout and UNC alum who has revolutionized the way statisticians and REAL analysts watch basketball.

Oliver essentially invented the formulas for efficiency, "tempo-free" stats as they're called. He also created a measure of using a normal bell curve to predict winning percentages and determine player contribution to his team's win/loss record, a "player win percentage." All of his formulas are explained clearly in the book, so you can use them to analyze your favorite players and teams.
The book is very readable, filled with humor and good stories. Oliver is able to go back and look at how the game has changed over the years, and analyze how good players really were/weren't in particular seasons. Which teams really had the best offenses/defenses? Which players were underrated and which were all hype? You can read more about the book at Oliver's website.

Ken Pomeroy has made some of Oliver's work famous, (as everything you see on his site is Oliver's ideas) but there's still no one out there using ALL of the tools that Oliver has invented. If I had access to the data on a daily basis...

Easily one of the top-10 most gratifying books I've ever read. He has changed my life and how I watch and track stats for basketball. If you're a basketball fan, you WON'T regret reading this book.

5 stars out of 5!

Tuesday, March 11, 2008

Book Review (#8 of 2008)

If you're taking Stats 291 at UK or some other college then you should just sell back your textbook and buy this book used instead.

Statistics for People Who (Think They) Hate Statistics by Neil J. Salkind.

I needed to brush up on my stats and bought the first edition for $1.50. Salkind has done a GREAT job of explaining the different t-tests, chi-squared tests, regression analysis, etc. in very simple terms and gives easy-to-follow examples of how to do them on your own. It's written for college kids who are asking "When will I ever need this stuff?" This book would have saved me a headache as a sophomore sitting through 300-person lectures and a lab with a Chinese TA who really didn't speak English.

I think everyone should understand basic statistics. It allows you to analyze things more clearly and be more critical of studies you see on the news. This was easy and fun to read, hard to find in a stats textbook.

4.5 stars out of 5.

Monday, March 10, 2008

Book Review (#7 of 2008)

I try to read at least one really "smart" book a year. Fortune Magazine rated this book one of the "smartest books of all time," so I guess it counts. This is actually the first book of the year that I read, it was on my Christmas wish list.

Fooled by Randomness: The Hidden Role of Chance in Life and the Markets by Nassim Nicholas Taleb. It and its sequel, The Black Swan, have been on the BusinessWeek bestseller list for the past year. This book has impacted my year more than any other, and changed how I view things.

Taleb is a true eccentric. A mathematician/statistician/options trader who fills every page with parenthetical ramblings. "This eccentric and highly personal exploration of the nature of randomness meanders from the court of Croesus and trading rooms in New York and London to Russian roulette, Monte Carlo engines, and the philosophy of Karl Popper." He quotes heavily from ancient Greek and Persian literature, philosophical works, physics research, psychology journals, and studies in statistics. He inspires you to read difficult texts.

(I think) One of his main points is that we ascribe success to those who have done nothing but been on the right side of the odds. There might be 1,000 new bond traders entering the business after college. If they have a 50% annual success rate purely due to random chance, then after 10 years there will be 2 guys that people will clamor to for advice simply because they "must" have some knowledge to allow them to "beat" the market, when it is all due to randomness. There are 998 other guys who have "blown up" or been fired b/c they lost due to the same randomness, and no one is offering a book deal to them.

I've often wondered what it would be like to be Spock and think purely logical and without emotions. Taleb looks at some research and finds that emotions are what actually help us make decisions. There are times in mathematics when you solve an optimization problem and come up with multiple solutions that would all be equally good. A purely logical person would be unable to decide between the options and would be stuck forever, like a computer program stuck in a loop. Emotions are important.

He gives several real-life examples to illustrate these phenomena. He also delves into the psychology of how successful people in the right circumstances feel inferior and unsuccessful.
He gives examples of firms who bet heavily on a probable outcome, but don't take insurance against the improbable and lose billions (like in our current market troubles).

A question to ask yourself:
Would you play Russian roulette if there was only a 1/6 chance of dying, but a 5/6 chance of winning $1 million for every time you survived? It's pretty good odds. If enough people play then chances are that someone is going to play a lot and end up with several million dollars. But, the vast majority will eventually lose everything. So it is in business when what looks like a good bet might ignore the (sometimes very slim) chance that something will go wrong.

Taleb is also quite critical of modern-day economics, claiming that economists are trying to camouflage their inability to explain things in mathematics that are too limited to do what economists need it to do. I found those criticisms highly interesting.

He is also critical of regression analysis, particularly time-series models because of the problem of stationarity. Over time, there are countless unobserved things that could change, therefore it becomes less likely to learn what you want do by doing a long time series.

I give this book 4.5 stars out of 5. It is a difficult read because of all the parenthetical ramblings, but the points the way the book stretches the mind is definitely outstanding. I'm very eager to read The Black Swan.

Sunday, March 09, 2008

On Hymnals

Today we visited First Baptist Clinton, TN. It's the type of church that has the early service be the "contemporary" and second service the "traditional," but we didn't know that and showed up for the second service. It was a very friendly place, and we enjoyed it.

3 hymns, an offertory, and a sermon. As I was singing from a hymnal, I noticed something very unfamiliar about it-- I realized it had been about 10 years since I'd last used a hymnal!

Now, we've always sung hymns in our churches, but I think it had been 10 years since I'd been to a church that didn't at least have an overhead projector to display the words. Or, if not, it was a Sunday that I was there and they weren't using hymnals.

(In Russia and Moldova, the hymnals don't have music in them. They're just lyric books, and the tunes are memorized by whoever is playing the piano, or the old babushka in the back who remembers it from childhood. [Which is amazing, because there are like 1,000 songs in them.])

One hymn this morning was a difficult one; I'm pretty sure I'd never even heard it before. I had to read the music. I realized it had been about 10 years since I had even read real sheet music, and I had some difficulty doing so! I've not served in a choir, so I never had the need to in the past decade.

Is this necessarily a bad thing? I don't think so, but I feel bad about losing the familiarity with reading music. Will we join a church that primarily uses hymnals? Not likely.

Friday, March 07, 2008

My own economic indicator

Inflation is up, growth is down, and employers are cutting workers. This is a wonderfully uncertain time to be unemployed or underemployed.

I receive job notices from several job-finding websites based on criteria I set. I can use the number of job listings as an indicator of the market. Back in December, I was receiving about 30 new positions a week from my Jobster.com search agent. The past two weeks there have been zero new jobs found.

A skim of the local paper seems to support the Jobster observation-- fewer and fewer jobs are being listed, you have to search harder to find them. Some government agencies are in a hiring freeze for 2008 due to budget cuts.

I've heard of forecasters in huge cities using the number of people they see riding with them on trains to work as an indicator of employment growth. I guess this is similar.

Wednesday, March 05, 2008

Basketball Wednesday- BracketScience Edition

March is my favorite month, my favorite time of year. There's tournament play every weekend and it's better than any holiday season.

One of the best sites for thinking about filling out your bracket is Pete Tiernan's BracketScience.com. Pete has been obsessed with what the data says for decades and he writes articles for ESPN Insider. Maybe the coolest feature on any March Madness website is his BracketMaster, where you can input any of 18 characteristics of teams entering the NCAA tournament and see how they fared.
For example, how did 2 seeds who get 60-70% of their scoring from guards and have beaten opponents by an average of 8 points per game perform in the tourny?

Pete looks at something called PASE, Performance Against Seed Expectation. He looks at a team's seed to predict how far they'll go (2 seeds should win three games, 3 seeds should win 2 games, 8 seeds should win one game, etc.) then looks for characteristics of teams that overperform/underperform against that measure.

He has a list of 6 specific attributes that 15 of the last 17 champions have in common. Want to know the list? Go to the website.

I consider Pete a friend. He's provided me with data for my own obsessive research into what the data says. I have a spreadsheet that is about 60 X 256 that will help me fill out my bracket this year.

(If people wonder why I struggle with my Fantasy teams in other sports, it's because I don't have a huge spreadsheet from which to plug into expensive software and do regression analysis on player performance. But, you want me on your team when it comes to a game of Pick 'Em).

So, check out Bracketscience, read Pete's blog and articles (a very reasonable annual fee is necessary for most things). Drop him a line and tell him I sent you!

Monday, March 03, 2008

An update from Afghanistan

Last month, I wrote about a former co-worker who was kidnapped in Afghanistan, and asked for your prayers on her behalf. Today, it's being reported that she is presumed dead. If true, then I'm sure she understands 2 Corinthians 4:17 firsthand.

A friend of mine who met her in Afghanistan eulogized her today in an email:
This woman had lived there 3 years, giving her life to the oppressed Afghani (ethnic Pashtun) women of Kandahar. She, and the other American women on her team, chose to wear the burqa, the full-body robe with only a screen for their eyes, to share in the culture and burden of the local women. She gave up all of her freedom, so the women there would have a chance to receive eternal freedom.


Cyd Mizell was the best of the best. She felt a burden to go, and she went. In January, 500 burqa-clad women marched in protest of her kidnapping, themselves taking on great risk. A 50-year old single woman, she was quite obviously an inspiration to many.

Book Review (#6 of 2008)

Another one of the audiobooks we found for $1.

Honor and Duty by Gus Lee. The fictional story of a Chinese American who gets accepted into West Point, fails to meet his father's expectations, and tries to understand his multi-ethnic identity while preserving his honor.
The audiobook is read by B.D. Wong (cue Law and Order theme music). B.D. is a folk hero on Law & Order: SVU.

B.D. does the best job of reading an audiobook I've ever heard. Accents, voice changes, whispering. All very dramatic, it kept the book interesting.

If you get the book in print, I give it only 1 star out of 5.
If you get the Bradley Darryl Wong audioversion, I give it 2.5 stars out of 5.