Gauging of interest: LW stock picking?
EDIT: Based on criticism below, I am reconsidering how to proceed with this idea (or something in the neighbourhood).
A topic that has been on my mind recently is where, in our complicated lives, there might be low-hanging fruit ready to be picked by a motivated rationalist. Actual, practical, dollars-and-cents fruit.
In possibly-related news, here is how the writer of About.com's beginner's guide to investing describes the stock market:
Imagine you are partners in a private business with a man named Mr. Market. Each day, he comes to your office or home and offers to buy your interest in the company or sell you his [the choice is yours]. The catch is, Mr. Market is an emotional wreck. At times, he suffers from excessive highs and at others, suicidal lows. When he is on one of his manic highs, his offering price for the business is high as well, because everything in his world at the time is cheery. His outlook for the company is wonderful, so he is only willing to sell you his stake in the company at a premium. At other times, his mood goes south and all he sees is a dismal future for the company. In fact, he is so concerned, he is willing to sell you his part of the company for far less than it is worth. All the while, the underlying value of the company may not have changed - just Mr. Market's mood.
I have heard this narrative many times before, and I'd like to test whether it is accurate - and in particular, whether LWers can consistently beat the market.
The skeptic may well ask: why should LWers have an advantage? Why not go to the professionals - investment advisors? Also, isn't there a whole chapter in Kahneman about how even smart people suck at picking stocks? And what do you, simplicio, know about this anyway?
LWers may have an advantage by virtue of being educated about such topics as cognitive biases, sunk cost fallacy, probabilistic prediction, and expected utility - topics with which investment advisors et al. may or may not be familiar on a gut level. I am not sure if we're any better, but I'd like to test it. Also, if LW turns out to be any good at offering such advice, that advice would presumably be free, unlike that of yon advisor (fees tend to kill returns on investment - just ask anybody who uses Intrade). As for what I personally know - not very much yet. But I find competition very stimulating.
Accordingly, my proposal is for a contest: over the course of 2013, I will set up & maintain a Google Drive spreadsheet. This spreadsheet will be shared with contest participants. Each participant will have say $5,000 of play money to use "buying" (or "selling") stocks on the exchange of their choice. Contestants will record the date of purchase or sale, quantity, and preferably provide comments regarding why they are buying or selling.
At the end of this contest (Dec 31, 2013?), I will commit to Paypal the winner (defined as the person with the highest market valuation of play assets as of midnight on that date) the equivalent of $50 CAD in their local currency. In the unlikely event that I win, I will donate that $50 to the Against Malaria Foundation. (Above commitment does not take effect until I actually gauge interest in this contest, figure out an end date & rules etc., and decide to proceed. If anyone else wants to throw money in the pot, please do.)
The purposes of this post are therefore:
- to find out who is interested - please leave a comment below, and e-mail me at ispollock [at] gmail.com if you want in;
- to solicit constructive and destructive criticism of the project, especially from any local experienced investors (in particular, perhaps a one-year timeframe is too short for a meaningful contest? Also, real-world experience of transaction costs in buying and selling would be extremely helpful);
- to ask if anyone knows of a better software platform for the contest than Google Drive, or knows of any extremely helpful resources I should be reading/linking to.
Consciousness of simulations & uploads: a reductio
Related articles: Nonperson predicates, Zombies! Zombies?, & many more.
ETA: This argument appears to be a rehash of the Chinese room, which I had previously thought had nothing to do with consciousness, only intelligence. I nonetheless find this one instructive in that it makes certain things explicit which the Chinese room seems to gloss over.
ETA2: I think I may have made a mistake in this post. That mistake was in realizing what ontology functionalism would imply, and thinking that ontology too weird to be true. An argument from incredulity, essentially. Double oops.
Consciousness belongs to a class of topics I think of as my 'sore teeth.' I find myself thinking about them all the time: in the middle of bathing, running, cooking. I keep thinking about consciousness because no matter how much I read on the subject, I find I am still confused.
A Challenge for LessWrong
The user divia, in her most excellent post on spaced repetition software, quotes Paul Buchheit as saying
"Good enough" is the enemy of "At all"!
This is an important truth which bears repetition, and to which I shall return.
"Rationalists should win"
Many hands have been wrung hereabouts on the subject of rationality's instrumental value (or lack thereof) in the everyday lives of LWers. Are we winning? Some consider this doubtful.1
Now, I have a couple of issues with the question being framed in such a way.
- Benefits of rationality are often negative benefits - in the sense that they will involve not being stupid as opposed to being especially smart. But "Why I didn't take on that crippling mortgage" doesn't make a very good post.
- Weapons-grade rationality à la LessWrong is a refinement to the reactor-grade rationality practiced by self-described skeptics - for most cases, it is not a quantum leap forward. The general skeptic community is already winning in certain senses (e.g., a non-religious outlook correlates strongly with income and level of education), although causal direction is hard to determine.
- Truth-seeking is ethical for its own sake.
- I, for one, am having a hell of a good time! I count that as a win.
Nonrandom acts of rationality
The LessWrong community finds itself in the fairly privileged position of being (1) mostly financially well-off; (2) well-educated and articulate; (3) connected; (4) of non-trivial size. Therefore, I would like to suggest a project for any & all users who might be interested.
Rationality & Criminal Law: Some Questions
The following will explore a couple of areas in which I feel that the criminal justice system of many Western countries might be deficient, from the standpoint of rationality. I am very much interested to know your thoughts on these and other questions of the law, as far as they relate to rational considerations.
Moral Luck
Moral luck refers to the phenomenon in which behaviour by an agent is adjudged differently based on factors outside the agent's control.
Suppose that Alice and Yelena, on opposite ends of town, drive home drunk from the bar, and both dazedly speed through a red light, unaware of their surroundings. Yelena gets through nonetheless, but Alice hits a young pedestrian, killing him instantly. Alice is liable to be tried for manslaughter or some similar charge; Yelena, if she is caught, will only receive the drunk driving charge and lose her license.
Raymond, a day after finding out that his ex is now in a relationship with Pardip, accosts Pardip at his home and attempts to stab him in the chest; Pardip smashes a piece of crockery over Raymond's head, knocking him unconscious. Raymond is convicted of attempted murder, receiving typically 3-5 years chez nous (in Canada). If he had succeeded, he would have received a life sentence, with parole in 10-25 years.
Why should Alice be punished by the law and demonized by the public so much more than Yelena, when their actions were identical, differing only by the sheerest accident? Why should Raymond receive a lighter sentence for being an unsuccessful murderer?
Some prima facie plausible justifications:
- Identical behaviour is hard to judge - perhaps Yelena was really keeping a better eye on the road than Alice; perhaps Raymond would have performed a non-fatal stabbing.
- The law needs to crack down harder when there are actual victims, in order to provide the victims and families a sense of justice done.
- This could result in far too many serious, high-level trials.
Trial by Jury; Trial by Judge
Those of us who like classic films may remember 12 Angry Men (1957) with Henry Fonda. This was a remarkably good film about a jury deliberating on the murder trial of a poor young man from a bad neighbourhood, accused of killing his father. It portrays the indifference (one juror wants to be out in time for the baseball game), prejudice and conformity of many of the jurors, and how this is overcome by one man of integrity who decides to insist on a thorough look through the evidence and testimony.
I do not wish to generalize from fictional examples; however, such factors are manifestly at play in real trials, in which Henry Fonda cannot necessarily be relied upon to save the day.
Komponisto has written on the Knox case, in which an Italian jury came to a very questionable (to put it mildly) conclusion based on the evidence presented to them; other examples will doubtless spring to mind (a famous one in this neck of the woods is the Stephen Truscott case - the evidence against Truscott being entirely circumstantial.
More information on trial by jury and its limitations may be found here. Recently the UK has made some moves to trial by judge for certain cases, specifically fraud cases in which jury tampering is a problem.
The justifications cited for trial by jury typically include the egalitarian nature of the practice, in which it can be guaranteed that those making final legal decisions do not form a special class over and above the ordinary citizens whose lives they effect.
A heartening example of this was mentioned in Thomas Levenson's fascinating book Newton and the Counterfeiter. Being sent to Newgate gaol was, infamously in the 17th and 18th centuries, an effective death sentence in and of itself; moreover, a surprisingly large number of crimes at this time were capital crimes (the counterfeiter whom Newton eventually convicted was hanged). In this climate of harsh punishment, juries typically only returned guilty verdicts either when evidence was extremely convincing or when the crime was especially heinous. Effectively, they counteracted the harshness of the legal system by upping the burden of proof for relatively minor crimes.
So juries sometimes provide a safeguard against abuse of justice by elites. However, is this price for democratizing justice too high, given the ease with which citizens naive about the Dark Arts may be manipulated? (Of course, judges are by no means perfect Bayesians either; however, I would expect them to be significantly less gullible.)
Are there any other systems that might be tried, besides these canonical two? What about the question of representation? Does the adversarial system, in which two sides are represented by advocates charged with defending their interests, conduce well to truth and justice, or is there a better alternative? For any alternatives you might consider: are they naive or savvy about human nature? What is the normative role of punishment, exactly?
How would the justice system look if LessWrong had to rewrite it from scratch?
The scourge of perverse-mindedness
This website is devoted to the art of rationality, and as such, is a wonderful corrective to wrong facts and, more importantly, wrong procedures for finding out facts.
There is, however, another type of cognitive phenomenon that I’ve come to consider particularly troublesome, because it militates against rationality in the irrationalist, and fights against contentment and curiousity in the rationalist. For lack of a better word, I’ll call it perverse-mindedness.
The perverse-minded do not necessarily disagree with you about any fact questions. Rather, they feel the wrong emotions about fact questions, usually because they haven’t worked out all the corollaries.
Let’s make this less abstract. I think the following quote is preaching to the choir on a site like LW:
“The universe that we observe has precisely the properties we should expect if there is, at bottom, no design, no purpose, no evil, no good, nothing but pitiless indifference.”
-Richard Dawkins, "God's Utility Function," Scientific American (November, 1995).
Am I posting that quote to disagree with it? No. Every jot and tittle of it is correct. But allow me to quote another point of view on this question.
“We are not born into this world, but grow out of it; for in the same way an apple tree apples, the Earth peoples.”
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