David Walsh

A key feature of the markets Walsh and his partners invest in is that they are characterised by randomly “independent events”. Specifically, the occurrence of one event does not influence the chance of the other and they therefore have “finite variance”, or limited downside risk.

“Gambling has the huge benefit of having independent events – I cannot get blown up by the black swans that plague financial markets.”

He says deploying mathematics in “equities markets that may have infinite variance outcomes makes working out probabilities much harder”.

“You don’t know whether you are summing a sequence of fractions that add to one or if they add to infinity, because financial markets have non-independent [or potentially related] events,” he says.

The bankable independence of results in gambling markets is the “component of our strategy that gives me the most security”, Walsh says.

“It is even better in games like black jack, where the events are not only independent but also negatively correlated – your chance of winning goes up if you lost the previous hand because there are an excess of cards remaining that are advantageous to you.”

He is critical of the billionaires printed in financial markets who “often make money in the low-probability, high-opportunity outcomes that are essentially exhibiting ‘correlated parlays’ [where one event significantly influences the probability of another].

“Correlated parlays make people look smart and can create a whole bunch of rich folks, but there was probably nothing but pathologies in the financial data.”

From a profile of David Walsh, a guy who made a fortune using quantitative models to gamble professionally. Walsh seems to have a healthy appreciation for the role luck has played in his success and is redeploying much of his fortune to build an eccentric art museum in Tasmania.

It's his explanation of his success that is worth studying.

Asked about exactly what his team’s “edge” has been over the years, Walsh distils [sic] it down to embracing the wisdom of crowds.

“You can work out some complex algorithm to predict horse racing odds using multinominal logistic regression,” Walsh says. “But the result would significantly underperform the public odds.

“The key is that the public odds must be included in your model. The best models are not predictive models per se, but ‘perturbation’ models that start with the assumption that the public is right and then work out what small errors they might make.

“The public odds are not just an important signal – they are a remarkably efficient signal.”

He cites the example of the former Russian chess grandmaster Boris Spassky, who played and lost to the Russian public in a game of chess.

He describes the public’s ability to make accurate collective decisions as an “emergent strategy”, like birds flocking or democracies (which form not in the mind of one individual, but through the interactions of many).

“I am saying there is wisdom in crowds beyond the point you can model without explicitly incorporating it.”

How does this system work in practice? “Let’s talk about Sydney race night on Saturday,” Walsh explains.

“We might have a model of what we think the probabilities should be that includes the public odds.

“We essentially wager on those events that have better chances than the public thinks, which gives us a positive return expectation.”

Actually, Love Actually...

I’m sure many of these takedowns of Love, Actually have been around since the movie first came out, but this is the first season I’ve really noticed them all. The movie had already evolved from surprise hit to unabashed guilty pleasure, a sort of annual holiday ritual up there with A Christmas Story or Miracle on 34th Street. Who among us has not read, on social media, someone declaring their unembarrassed delight at discovering Love, Actually playing on TV, even though the movie has become so popular that it really wasn’t a guilty pleasure.

And now, the backlash.

A romcom in which two characters find love because they are both interesting, clever, funny, accomplished, kind, confident, attractive—insert your favorite adjective here—and play equal parts in winning of the affection of the other would not only fail to scratch this itch, it would be depressing. We don’t go to movies to watch people more interesting, clever, funny etc etc than ourselves achieve love and happiness in a context very much like that of our real lives—that’s what we are watching in our real lives. We go to movies to be reassured that we can have those things without being transformed ourselves. The viewer-identification characters here, then, need to seem basically good and genial—we’re not going to project ourselves onto someone actively unlikable—but also bland and passive enough that they don’t leave us feeling like true love is for people with desirable characteristics we conspicuously lack.

If there’s something to this hypothesis, then, the women in movies like Love, Actually are just as underdeveloped and lacking in agency as women in (say) macho action movies, but for completely different reasons. In the male-targeted fantasy, women are essentially prizes to be won by the hero the male viewer identifies with. In the female-targeted fantasy, they’re equally ciphers because these are fundamentally not fantasies of self-transformation, which means the viewer-identification figure needs to be a vacuum anyone can step into as they already are. In movies about external goals, we can accept needing to become better in some way (through our onscreen surrogates) over the course of the film in order to achieve them. But people want to be loved for who they already are—to find the person who wants just what we already have, rather than becoming what the other person needs. That, in a way, is the most fantastical element: It is the external trappings of love without (at least for the character the viewer identifies with) the selflessness or transformative process that real love and real relationships—even more than Jedi training or a semester at Hogwarts—always entail.

Here’s one in a different voice, the voice of Jezebel, goddess of female wrath.

In keeping with that theme, Alan Rickman's secretary is just constantly pointing at her vagina and licking her own face, like she's a porn actress who forgot she was doing a mainstream movie. Or, more accurately, like the character is a porn actress who forgot she was working in a real office. I don't mean that there's anything wrong with porn actresses, or that the actress who plays Alan Rickman's secretary is anything but lovely here, I mean that LOVE ACTUALLY SEES NO PROBLEM WITH TREATING ITS FEMALE CHARACTERS LIKE GIANT BIPEDAL VAGINAS IN SWEATER VESTS.

(Also, she's still looking for a venue for the holiday party and it's only three weeks before Christmas!?!?! This is why you shouldn't hire any non-sentient organ to do clerical work. No matter how sexy it is.)

Anyway, the flirtation is a problem because Alan Rickman is married to Emma Thompson, but don't worry—she wears foundation garments and talks too much (see above) and therefore deserves to die alone with nothing but Joni Mitchell for comfort.

Laura Linney, the only other female character with some semblance of an inner life, meets a similar fate.

This is a movie made for women by a man.

But it’s not just women who have issues with the movie. In The Atlantic, Christopher Orr declares Love, Actually Is the Least Romantic Film of All Time:

Of the movie’s seven romantic plotlines, too, I think one is rather endearing. Having Martin Freeman and Joanna Page discover they're attracted to one another in the midst of pretty much the least romantic activity possible—being ordered into a variety of rushed, pseudo-erotic poses on a movie set—is a clever conceit, and tidily executed.

As for the rest of the film—which is to say, the bulk of the film—I think it offers up at least three disturbing lessons about love. First, that love is overwhelmingly a product of physical attraction and requires virtually no verbal communication or intellectual/emotional affinity of any kind. Second, that the principal barrier to consummating a relationship is mustering the nerve to say “I love you”—preferably with some grand gesture—and that once you manage that, you’re basically on the fast track to nuptial bliss. And third, that any actual obstacle to romantic fulfillment, however surmountable, is not worth the effort it would require to overcome.

Is giving cash really the optimal gift?

Tis the season for exchanging gifts. One popular strain of economics thinking that has gotten a lot of play in recent years is that choosing a surprise gift for someone else is an economically suboptimal tradition. It's hard to know the optimal gift for maximizing the happiness of another person, leading to lots of regifting or returns, and choosing a gift for someone usually strokes the ego of the giver more than it optimizes for the happiness of the recipient. So many have suggested that the best gift is to just give a person cash and let them choose what they want.

It turns out most economists disagree with this line of thinking. Most of them agree, gift-giving is not about income redistribution, it's a way of signaling the value of your interpersonal relationship, and spending the time to select a gift for someone is a better way of achieving that than just handing over an envelope of cash. And what of the value to the gift giver? That utility should not be discarded so lightly, nor should one underestimate the value of surprise or novelty.

I enjoyed this comment from Austan Goolsbee from the University of Chicago:

Instead of proposing to your wife w/diamond ring [sic], you offer a gift card of equal value. Efficient--if you don't count your hospital bills

This is reassuring. I'm sure my brother will love the nose hair clipper I picked out for him.

John Jeremiah Sullivan on David Foster Wallace

I don't know how it is that I missed this the first time around: John Jeremiah Sullivan, one of my favorite essayists, writing about David Foster Wallace, another of my favorite essayists. I'm hardly unique in counting both among my favorite writers.

People who've never read a word he wrote know his style, the so-called quirks, a bag of typographical tricks ripped from the eighteenth-century comic novel and recontextualized: the footnotes and skeptical parentheticals, clauses that compulsively double back, feeling for weaknesses in themselves. It's true these match the idiosyncrasies of his manner of speech and thought. (We know this especially well now that all those YouTube videos of him at readings and in interviews have become familiar—oddly so: For someone who clearly squirmed under the eye of scrutiny like a stuck bug, Wallace submitted and subjected himself to so much of it. He had more author photos than any of his peers. He was nothing if not a torn person.)

The point is that his style did more than reflect his habit of mind; it was an expression of an unusually coherent sensibility. Wallace was a relentless reviser and could have streamlined all of those syntactically baroque paragraphs. He didn't think the world worked that way. The truth, or rather truth-seeking, didn't sound like that. It was self-critical—self-interrogating, even—on the catch for its own tricks of self-evasion. It's worth noting, in that regard, that The New Yorker, which published some of his best fiction, never did any of his nonfiction. No shame to Wallace or The New Yorker, it's simply a technically interesting fact: He couldn't have changed his voice to suit the magazine's famous house style. The "plain style" is about erasing yourself as a writer and laying claim to a kind of invisible narrative authority, the idea being that the writer's mind and personality are manifest in every line, without the vulgarity of having to tell the reader it's happening. But Wallace's relentlessly first-person strategies didn't proceed from narcissism, far from it—they were signs of philosophical stubbornness. (His father, a professional philosopher, studied with Wittgenstein's last assistant; Wallace himself as an undergraduate made an actual intervening contribution—recently published as Fate, Time, and Language—to the debate over free will.) He looked at the plain style and saw that the impetus of it, in the end, is to sell the reader something. Not in a crass sense, but in a rhetorical sense. The well-tempered magazine feature, for all its pleasures, is a kind of fascist wedge that seeks to make you forget its problems, half-truths, and arbitrary decisions, and swallow its nonexistent imprimatur. Wallace could never exempt himself or his reporting from the range of things that would be subject to scrutiny.

By the way, if anyone out there has a manual or guide to The New Yorker famous house style, the “plain style” mentioned above, I would love to read it. For a style that is so famous, I'm surprised the internet doesn't host a summary of its tenets. Occasionally you see bits and pieces of their house style discussed online, but I have yet to find a comprehensive compendium. Perhaps, like the recipe for Coca Cola or Kentucky Fried Chicken, the formula for the house style is jealously guarded in a safe surrounded by the stern and exacting editors of the famed New Yorker copy desk.

Back to David Foster Wallace. Of Wallace's final unfinished but published novel, The Pale King, Sullivan writes:

You'd be forgiven for suspecting that a book about random people who work for the government sounds insufferably tedious. The reason it's not has to do with the word about—it's the wrong word, the wrong preposition. Wallace doesn't write about his characters; he hadn't in a long time. He writes into them. That thing he could do on a tennis court or a cruise ship, or at a porn convention, that made him both an inspiration and a maddening, envy-making presence for the scores like me who learned to do "magazine writing" in his shadow (he was one of those writers who, even when you weren't sounding like him, made you think about how you weren't sounding like him)—Wallace liked to do that, in his fiction, with his characters' interior lives.

Imagine walking into a place, say a mega-chain copy shop in a strip mall. It's early morning, and you're the first customer. You stop under the bright fluorescents and let the doors glide closed behind you, look at the employees in their corporate-blue shirts, mouths open, shuffling around sleepily. You take them in as a unified image, with an impenetrable surface of vague boredom and dissatisfaction that you're content to be on the outside of, and you set to your task, to your copying or whatever. That's precisely the moment when Wallace hits pause, that first little turn into inattention, into self-absorption. He reverses back through it, presses play again. Now it's different. You're in a room with a bunch of human beings. Each of them, like you, is broken and has healed in some funny way. Each of them, even the shallowest, has a novel inside. Each is loved by God or deserves to be. They all have something to do with you: When you let the membrane of your consciousness become porous, permit osmosis, you know it to be true, we have something to do with one another, are part of a narrative—but what? Wallace needed very badly to know. And he sensed that the modern world was bombarding us with scenarios, like the inside of the copy shop, where it was easy to forget the question altogether. We "feel lonely in a crowd," he writes in one of his stories, but we "stop not to dwell on what's brought the crowd into being," with the result that "we are, always, faces in a crowd."

That's what I love in Wallace, noticed details like that, microdescriptions of feeling states that seem suggestive of whole branching social super-systems, sentences that make me feel like, Anyone who doesn't get that is living in a different world. He was the closest thing we had to a recording angel. There are paragraphs in Infinite Jest where he's able to trap things, fleeting qualities of our "moment," things that you weren't sure others felt but suspected they might. To read these is like watching X-rays of the collective unconscious develop.

Sullivan's essay captures so much of what I love about Wallace's writing, and reading this essay renewed within me a sudden and violent longing to hear Wallace on so many topics of today: Federer's long, slow decline, perhaps with an aside into the aesthetic violence of the power groundstroke game of Nadal and Djokovic; the strange cultural rift between the East Coast center of wealth, Wall Street, and the ascendant West Coast cultural influence of the Bay Area; the mind-altering effects of streams of content; the aesthetic fetishism of the Internet as evidenced by the rise of the animated GIF, memetic culture, and millions of photos of bowls of ramen on Instagram; the moral lessons of Breaking Bad.

[As consolation, for those who have not already, pick up a copy of Pulphead: Essays by the aforementioned Sullivan. A list of his essays online is here.]

Gender dimorphism in Disney cartoons

Until I read this article, I didn't know what gender dimorphism meant.

Yes, her eyeball actually has a wider diameter than her wrist.

Giant eyes and tiny hands symbolize femininity in Disneyland.

Click through to see some of the reference images. One could isolate Disney here, but cartoons of a variety of countries have their representational biases. For example, anime features characters with gigantic eyes and miniscule noses.

This is one area where I'd be curious to hear from some actual animators to understand intent. It's possible the daughter in The Incredibles looks a bit too anorexic relative to the other humans in the movie, but perhaps animation's natural propensity to exaggerate just amplifies existing representational tropes.