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Investment Strategy

-6 Clarity 22 January 2016 02:26AM

Raison d'être


My original reason for risking my money for more, and the reason I tell myself, is that the marginal value of losing just about any amount of my money at the moment is negligible. I am fairly austere in my consumption habits and have no big ticket debt. Though, having lots and lots of money would certainly improve my options in life.

 

History


I am a bad gambler, better and investor. I lost thousands using the Martingale betting strategy which seemed to work on short-time line simulations that I tried, but failed to work in real life. I now understand why it doesn't work fortunately. I lost thousands on poker, which I’m awful at. Now, I’ve lost thousands on speculating in stocks.

 

Insight


I understand why I lost money when I gambled. It’s less clear to me now as a speculator. My consistent failure has resigned me to avoid any active management of my money making by investing for the foreseeable future because maybe I'm just a gambler and rationalizing all my irrationality in finance away. I was hoping someone here could help me understand what’s going on?

Strategy

My current stock portfolio is down 6000 dollars. My prior is that I have just been the liquidity in the market. My basic strategy has been buying mainstream stocks whose price has tanked for one reason or another (in the hope of a turnaround, or capitalising on people’s fear causing them to dump the stock below its actual value. And, to buy a few biotech stocks that seem high potential. This is all on the ASX cause it’s a hassle to open accounts to trade internationally:


Performance: underpriced

* BHP Billiton crashed due to low oil and an environmental disaster in brazil

* Slater and Gordan crashed due to getting class action law-suited by its own investors (ironic, since slater and gordan specialises in just that) through its main competitor

* Woolworths crashed due to price war with competitor and weaker profits

 


Growth: High potential, tractable and neglected

* Bionics limited is putting through some psychiatric medications in trials and I thought it would almost be good philanthropy to sponsor it since it’s quite novel compared to existing treatments

* Integral diagnostics is mainly owned by doctors who own clinics that order the machines so I feel like it’s undervalued by people not connected to it

* Regis healthcare gives me cheap exposure to the aging population market

* Tissue Therapies sounded like it was about a wound healing thing from a superhero comic but turned out to just be some niche diabetic product

* Donfang modern agriculture grows mandarins or oranges in China, and I wanted exposure to China and thought it was interesting that they’re listed on the Australian stock exchange

 


Portfolio optimization

 


Outcomes

I’ve either made a significant loss on each of these, over the course of a month, or basically no change in the price. The exception is tissue therapies that I bought ages ago and lost lots on too. I was going for long term appreciation anyway, so maybe things are okay? Help me become stronger! The first stock I picked I did extensive quantitative research on the fundamentals. However, I couldn't integrate all the information I collated into a single indicator for what decision I should make and I still don't know what that would look like so I just had to go with my gut. I made a loss anyway despite having found evidence that the team involved were actually quite pathetic because I already did all the research and thought it sad if I didn’t participate (plus shorting seemed to complicating!). I know technical analysis is bullshit, and I don’t see how any inefficiencies in machine learning of stock data that I could replicate in a timely manner with my average brain haven’t already been taken advantage of by existing quants.

 

Ask me anything.

-16 sunflowers 16 February 2015 04:32AM

Less Wrong,

Before posting this, I debated myself as follows:

"Should I create a new username?"

Motivations (normal):  I have not posted here in a long time.  There are honest, good reasons to start on an interesting forum with a "clean slate."  One reason is that I have changed so many of my opinions since I last posted.  This is not a big deal.  I am recently 25.

Motivations (abnormal):  OH MY GOD SOCIETY ANXIETY NEW SITUATION AAHHHHHHH.

Motivations (selfish):  Less Wrong is full of experts whose internet names I keep coincidentally running into...

A pleasant surprise:  Absolutely everybody I've been speaking with lately is entirely surprised that I had social anxiety all along.

My therapy:  honesty.  Weaknesses of honesty:  obvious.  Strengths of honesty:  also obvious.  For radical honesty, non-obvious to non-rationalists.

(I have not seen a therapist in about 10 years.  My therapy is, to put it shortly, in the style of Bertrand Russell.  Sort of.)

Well, I'm back.  Let's see how much better I have become.  I promise that I did not give myself time to read my old posts.  Anybody who is sufficiently interested in me will always be able to find out what I was like anyway.  My greatest protection is that I am not that interesting.  That's risky.  I have preferred the simple life for a reason.  That reason has been bad.

Anxiety is irrational.  It leads you to overestimate the degree to which people are interested in you.  Anxiety is rational.  It is an evolutionary vestige, reflecting a typical spectrum disorder, and is therefore likely to have been subject to selective effects, like overly aggressive dogs, and so forth.  Real life paradoxes.  Tricky things.  They can drive you absolutely bonkers.

I give Less Wrong my total honesty.  I will decline only with generalized rationales, only to protect the rights of others.  These include ordinary rights to privacy.  Again, anxiety.  None of my friends have known me as long as I have been away from Less Wrong.  Still, if I want to say "ask me anything," my reasons for declining, should I decline, will be "ordinary."  I will therefore decline in polite, normal ways, and simplify answers in polite, normal ways.  This took recent training:  even after holding a steady, normal job for quite some time, in which I was "very good."  It is blue collar.  Nothing exciting.  I will be leaving shortly.

I've come a long, long way my last post in a lot of ways.  I remember one stupid mistake which kept me from posting on Less Wrong for a while:  I came back - for a second - not too long ago, having read a few things about population genetics, and then I made an argument that was obviously stupid.  (From memory and shame:  I forgot about matrilineal descent.)

I have read the sequences.  I remember them, from long ago, unusually well lately.  They seem to be popping back up a lot.  You can quote them to me.  Do not assume I know anything.  I've learned to be a little more patient.

I've learned a lot about the private sector which I "knew but didn't <em>know</em>."  Like LaTex, HTML, and category theory (biological) and category theory (mathematical).  I am still working full time in a blue collar job.  I will find the time to learn.  The question is, where to start...

Bad answers:  school.  (not yet.  I know.  I have a university subscription.  It's practically free.  I have access.)

Bad answers:  textbooks.  (I've read them.  I prefer the real articles.  I already know the only category theory (mathematics) textbook I need.  To me, that's obvious. It's even more obvious to me than propositions like, "now's a good time to sleep.")

Good answers:  "what?"

This Q and A will be conducted in the style of Robert Sapolsky.  My plagiarisms are honest.  You may request sources to any answer.

I will sleep.  That's healthy.  Much more healthy than I ever really understood.  I'll check in tomorrow.

If nothing else, I do like jokes.  You are allowed to treat this post with the full force of intellectual cruelty.

I was not always nice.  I have done it to strangers.  I do regret it now.  Still, it can be funny.  So, fire away!

 

______________

 

That concludes my first Less Wrong experiment.  Like any bad experiment, it confirms what I know, because I know what a self-fulfilling prophecy is.

From now on, I will post on the presumption that I am not anonymous.

Continue.

(Note:  as an analytical social hyperanxious who envied "normal functioning," I do not believe that I can hide.  I can only expect people to be exactly as nice as they always were.  There are no demands, in the world of hyperanxious honesty.  Only requests.)

______________

Now, to begin another experiment:  I am not anonymous, and I am also not here for therapy.  That is what friends are for.  I have my therapy.  You know, family and stuff.  Same honesty, new constraint, which, as promised, only random people on the internet may introduce.

Less Wrong just filtered what it can and cannot hear.  It has done this before.  Not its fault.  Mine.  I accepted "random internet responsibilities."  I must now accept "people who are not me" constraints.  Those, are rules.  I am good at formalisms....

Continue as before.  Ask me anything.

______________

The second experimental result:  I have failed to elicit interest.  Per the original posts, I accept the responsibilities of a writer, though I am no writer.  Per ordinary standards of intellectual honesty, I will emphasize:  this is an experiment.  Less Wrong determines the parameters as it goes.  The experiment will continue on the following lines:

My failures:  clear communication.

My "root cause theory":  Generalized Anxiety Disorder

My constraints:  the lack of expertise to make that call.

My second constraint:  sufficient knowledge and skill to avoid learning precisely what I need to.

My "primary" motivation:  from memory, Less Wrong is full of people with similar intellectual interests.

My prediction:  "self help" threads will be similar to mine, in some ways, albeit much better written.

My control:  I have not ever read a self help thread.

Limitation:  Why should Less Wrong believe that?

Ask me anything.  Or not.  Some experiments fail, others succeed.

Overcoming Decision Anxiety

14 TimMartin 11 September 2014 04:22AM

I get pretty anxious about open-ended decisions. I often spend an unacceptable amount of time agonizing over things like what design options to get on a custom suit, or what kind of job I want to pursue, or what apartment I want to live in. Some of these decisions are obviously important ones, with implications for my future happiness. However, in general my sense of anxiety is poorly calibrated with the importance of the decision. This makes life harder than it has to be, and lowers my productivity.


I moved apartments recently, and I decided that this would be a good time to address my anxiety about open-ended decisions. My hope is to present some ideas that will be helpful for others with similar anxieties, or to stimulate helpful discussion.


Solutions

 

Exposure therapy

One promising way of dealing with decision anxiety is to practice making decisions without worrying about them quite so much. Match your clothes together in a new way, even if you're not 100% sure that you like the resulting outfit. Buy a new set of headphones, even if it isn't the “perfect choice.” Aim for good enough. Remind yourself that life will be okay if your clothes are slightly mismatched for one day.

This is basically exposure therapy – exposing oneself to a slightly aversive stimulus while remaining calm about it. Doing something you're (mildly) afraid to do can have a tremendously positive impact when you try it and realize that it wasn't all that bad. Of course, you can always start small and build up to bolder activities as your anxieties diminish.

For the past several months, I had been practicing this with small decisions. With the move approaching in July, I needed some more tricks for dealing with a bigger, more important decision.

Reasoning with yourself

It helps to think up reasons why your anxieties aren't justified. As in actual, honest-to-goodness reasons that you think are true. Check out this conversation between my System 1 and System 2 that happened just after my roommates and I made a decision on an apartment:

System 1: Oh man, this neighborhood [the old neighborhood] is such a great place to go for walks. It's so scenic and calm. I'm going to miss that. The new neighborhood isn't as pretty.
System 2: Well that's true, but how many walks did we actually take in five years living in the old neighborhood? If I recall correctly, we didn't even take two per year.
System 1: Well, yeah... but...
System 2: So maybe “how good the neighborhood is for taking walks” isn't actually that important to us. At least not to the extent that you're feeling. There were things that we really liked about our old living situation, but taking walks really wasn't one of them.
System 1: Yeah, you may be right...

Of course, this “conversation” took place after the decision had already been made. But making a difficult decision often entails second-guessing oneself, and this too can be a source of great anxiety. As in the above, I find that poking holes in my own anxieties really makes me feel better. I do this by being a good skeptic and turning on my critical thinking skills – only instead of, say, debunking an article on pseudoscience, I'm debunking my own worries about how bad things are going to be. This helps me remain calm.

Re-calibration

The last piece of this process is something that should help when making future decisions. I reasoned that if my System 1 feels anxiety about things that aren't very important – if it is, as I said, poorly calibrated – then I perhaps I can re-calibrate it.

Before moving apartments, I decided to make predictions about what aspects of the new living situation would affect my happiness. “How good the neighborhood is for walks” may not be important to me, but surely there are some factors that are important. So I wrote down things that I thought would be good and bad about the new place. I also rated them on how good or bad I thought they would be.

In several months, I plan to go back over that list and compare my predicted feelings to my actual feelings. What was I right about? This will hopefully give my System 1 a strong impetus to re-calibrate, and only feel anxious about aspects of a decision that are strongly correlated with my future happiness.

Future Benefits

I think we each carry in our heads a model of what is possible for us to achieve, and anxiety about the choices we make limits how bold we can be in trying new things. As a result, I think that my attempts to feel less anxiety about decisions will be very valuable to me, and allow me to do things that I couldn't do before. At the same time, I expect that making decisions of all kinds will be a quicker and more pleasant process, which is a great outcome in and of itself.

Hoping to start a discussion about overcoming insecurity

16 ILikeLogic 22 September 2013 08:53PM

Since Jr High at least, I've been frustrated by my insecurity. I don't intend this to be a personally revealing post so I'll just sum it up by saying that being insecure has had a profoundly negative impact on my life. I feel that it is the single biggest reason why I've failed to reach my potential in all ways. That's fine though, I'm not really bitter but I remain very frustrated and I want to solve this problem. I want to 'crack the code', if you will.

I've recently started reading some psychology books (again) which has led to me to revisit a couple of the self-help/psychology books that I used to be very fond of.

I've really been wanting to find a forum where I can discuss this with people who will understand what I'm talking about. Well, the other day, I followed a link to LessWrong, which I was somewhat familiar with because I used to visit and spend time here every now and then, and I remembered that I had read on here about self-help. Also I remember reading about how some of the people here had really liked the meetups because they were able to to talk more freely and be better understood than they normally are. I have had some frustration in discussing emotional topics elsewhere because of the lack of intellectual rigor with which they are often discussed. Like everything else, human emotions 'work a certain way'. Exactly how they work is not something that is perfectly understood by anyone but I find it frustrating when discussing them with people who don't seem to understand that, whatever the rules are, there are rules. So it occurred to me that LessWrong might be a good place to have the kind of discussion that I'd like to have. If you are interested in emotional insecurity in general and my take on it then you may want to read the rest of this post.

I've developed my own understanding of insecurity, which, admittedly, is a synthesis of other people's ideas, but I haven't found any book or therapy or system that puts it all together in a way that I fully agree with.

Here is what I think:

I think that what insecurity is, is inhibition of feelings of disappointment/loss because of an implicitly learned belief that to express these feelings will have negative consequences (ie – it will only make things worse).

I came across this idea after reading some EvPsych theory about the functional purpose of shame. The purpose of shame, it seems, is to signal to the other person that you feel badly and to elicit a rapprochement, a re-initiation of the connection that was broken when the other person broke it (due to anger or rejection or disapproval). Shame is functional. It allows group members to signal how much they value their connections to one another when those connections are temporarily broken. The person who engaged in the behavior that elicited the disapproval/rejection/anger feels a rather intense aversive feeling when the connection is threatened and this is signaled by the signs of distress that accompany properly functioning shame. The other person recognizes that the transgressor regrets the transgression and this appeases their anger. So the whole thing results in everyone feeling better, all connections restored, and the transgressor being a little bit wiser for it all.

I think insecurity develops when a person who has had a connection interrupted, expresses the normal distress and is further punished for that expression. If they are punished enough for expressing this distress they will suppress it, consciously at first and then automatically after the habit is formed. (I remember as a child being proud that I could endure these humiliations without crying. But I was naive, because I believed that if I wasn't reacting to it I wasn't affected by it. Wrong. This was not a good ability to have.) Before long they will be repressing their distress without even being aware that they are doing so. If they are like me they will, later, wake up to the fact that they are anxious and awkward and that these things are making their life a lot worse than it could be.

This is where a couple of the books that I've been reading recently come in. The two books are 'The Neuroscience of Psychotherapy' and 'Unlocking Your Emotional Brain'. At one point in 'The Neuroscience of Psychotherapy' the author (Louis Cozolino) talks about his job as a therapist being to create, in his clients, the expectation of reassurance or soothing, when they are faced with distress. It occurred to me that the anxiety that I was experiencing may be just the memory of a rejection/disapproval followed quickly by inhibition(accomplished via fear or anxiety). Inhibition that became a habit because there was no reassurance or soothing when the rejection/disapproval occurred. And so the idea naturally followed that if I could perhaps, somehow, not inhibit the feeling, and instead jump in and console or reassure or soothe myself in one way or another, then I could break the habit of inhibition and be rid of the anxiety.

That brings me to another self-help book, 'Focusing' by Eugene Gendlin, which I read about 20 years ago. The basic idea of 'focusing' is that if you pay attention to the feeling in your body, and don't distract yourself with too much thinking or paying attention to other things but just 'stay with' the feeling in your body then after some time (seconds or just a few minutes usually) you will recognize the feeling and have an insight about what it is that will provide you with immediate relief as the feeling, consciously recognized, runs its proper course. I remember really liking this book when I first read it and tried its ideas. The relief that you can feel is immediate and unmistakable. This is not something where you adopt some positive attitude that you think will benefit you but underneath you still feel anxious and insecure. No, the relief leaves you really feeling good and confident.

When 'Focusing', a book written about 30 years ago, showed up in the “Users Who Bought This Also Bought” on Amazon.com for 'Unlocking Your Emotional Brain', I remembered reading it and naturally got the idea to combine the focusing technique with my idea about jumping in with reassurance.

At about this time (this was fairly recently) I had also started reading 'Unlocking Your Emotional Brain' (still am – I'm about 1/3rd through it). This book is very exciting because it goes into a bit of detail about some of the scientific research on memory re-consolidation that really makes it seem possible to permanently rid one's self of unhelpful automatic emotional reactions. The gist of the memory re-consolidation research is that every time neuronal connections are activated they are vulnerable to change, and will change if a relevant experience that contradicts or modifies the belief on which they are based, happens soon enough after the emotion has been activated. If they are not activated, however, they cannot be changed. So just talking and thinking about feelings without activating them cannot change the learned emotional reactions. The authors have a therapy that they call Coherence Therapy which is designed to take advantage of this. I haven't really read far enough to know the details of their Coherence Therapy but what I have read so far fits in well with my own developing understanding of this.

Also relevant is Arthur Janov's primal therapy. When I read his book, also almost 20 years ago now, I had a strong intuition that he was right, even if his theory to explain it was a bit half-baked and nonsensical. I tried to do Primal Therapy on myself and at times I succeeded. And the change in how I felt was, like with focusing, profound. The change with a good primal was even stronger than with focusing. I felt completely secure and free of anxiety for up to a few days. It was wonderful. It also had a feeling of “this is how it is supposed to be”. So my experience with Primal Therapy (on myself, never with a therapist) also leads me to believe that some experience that involves actually engaging the problematic feelings is necessary to change them.

Well that's about where I stand with it right now. I'm trying to spend some time every day doing my process (a modified form of Focusing). When I have some quiet and a decent block of time (at least 20 minutes uninterrupted but ideally up to an hour) I seem to be having some good success with it but it is also frustrating at times as sometimes it is difficult to get 'movement' in how I feel.

I'd really appreciate anyone's thoughts on this. Thanks in advance.

[Link] Status Anxiety

-5 diegocaleiro 10 June 2013 07:32PM

Alain de Botton speaks about Status Anxiety

There is nowhere where I've witnessed (and felt) more status anxiety expressed and talked about than in Lesswrong. I tried to partly dispel the mith at least as it regards sexuality.

People talk about status in all its forms and shapes a lot here. Which made me wonder, what do you think of Alain de Botton's opinions on "status addiction" in western societies?

 

Social status & testosterone

28 gwern 20 October 2011 02:05PM

We’ve discussed signaling and status endlessly on LW; I think this is right up our vein: a 2011 review of research on the connections between famous male hormone testosterone and various forms of social interaction and especially social status, Eisenegger et al’s “The role of testosterone in social interaction”. (I grabbed this PDF in the short time Elsevier left full-text available, but only now, with some modafinil-powered spare time, have gotten around to excerpting it for you guys.)

1 Abstract

Although animal researchers established the role of testosterone as a ‘social hormone’ decades ago, the investigation of its causal influence on human social behaviors has only recently begun. Here, we review and discuss recent studies showing the causal effects of testosterone on social interactions in animals and humans, and outline the basic neurobiological mechanisms that might underlie these effects. Based on these recent findings, we argue that the role of testosterone in human social behavior might be best understood in terms of the search for, and maintenance of, social status.

continue reading »

Mental Rebooting: "Your Brain on Porn"...

11 [deleted] 15 October 2011 05:14PM

... or "How to Operate Your Limbic System", or "A Practical Guide to Superstimulus". That's how I see it, anyway.

Your Brain on Porn is a website mainly dedicated to exposing the addictive aspects of pornographyinterpreting this in light of the blind idiot god; and then forming a community around "rebooting", or prolonged abstinence that allows the brain to re-sensitize itself to, at the least, non-fetishistic sexual pleasure. By consistently NOT accessing whatever circuit is driving one's, well, drive, one sends this loop into atrophy. Eventually, one becomes able to quit. And then one finds alternatives.

Here is why I find this site so valuable: frequently during the arguments the site owner sets up, he doesn't just bring up pornography as the culprit here. To form his clauses he draws upon research on  addictions to junk food, or video games, and then tries to draw parallels to porn's effects: the escalating need of novelty due to rapidly declining pleasure response.

So I don't think it stops with porn. For me, any superstimulus is a bad superstimulus, despite the fact that some sirens are more necessary to listen to than others. It could be worth reflecting on what would actually count as a superstimulus; and then asking if one would benefit from a long hiatus from that stimulus. I'm not sure how long that cycle would be, but many "rebooters" proclaim seeing effects after three weeks, up to three months. It might not be enough to simply manage akrasia, as there could still be a chronic sensitivity problem in place. That would require time.

Here's what I thought of, so far.

Superstimulus List:

  • Porn.
  • Tab explosions and social networks -- the online kind. (This could be the most challenging one: More often than not, a computer is needed for productivity. Who can afford taking a three-month break?)
  • Video games.
  • Disorganizations, mess, and clutter.
  • Junk food. (I'm tentative about this one, because I'm still trying to figure out what counts as "junk". As far as I've seen, this word usually gets ascribed to high calorie, high fat foods... but that possibly doesn't matter, as I see proportionally high-fat content paleo diets. Or it's a combination of fat and sugar that becomes addictive, but either/or is manageable.)
  • Loud music. (Shameless speculation.)
  • Much of advertising today seems to focus on getting our attention with superstimulus. Thus, being mindful when one is exposed could minimize possible effects.
Replacements:
  • Touch. If you really need to show some love,  Karezza  is popular amongst those who have rebooted.
  • Meditation and N-Back. Since this really does require mental discipline, it would be worth practising these attention-management strategies.
  • Exercise.
  • Fasting. (In small doses,  it's probably healthier than you think  and, broadly speaking, also results in some sort of re-sensitization. [scroll down])
Potential Benefits:
  • Reduction of social anxiety. (Socially dominant monkeys have a greater density of dopamine receptors in the striatum than their less-dominant counterparts. I'm not saying that abstaining from porn will turn you into the CEO of a corporation with three girlfriends and a gimp -- I wish! -- but it sure as hell wouldn't hurt.)
  • Clearer focus. (This may come from lack of wont than an actual greater ability to focus, which is fine.)
  • Greater motivation.
Think of it like this: if all your adaptive needs are fulfilled, what incentive is there for your body to maximize your fitness? For all  it  knows, you've done a great job: you are now in the dreaded Comfort Zone.
Abstinence puts one outside of the realm of comfort, but not to the point of putting one in harm's way. It requires no "push", just self-awareness; something I would consider as the lowest hanging fruit of self-improvement.
None of these lists are exhaustive. The whole principle could be unsound; I am only a third into  just trying it  and this excludes Internet use management.