Pattern Addicts

When sitting at a roulette table where the option is red or black, and spinning... a series of reds in a row may make the chancer think, “it has got to be black next”. 

But no. This is called the Gambler’s Fallacy, “more frequent in the past means less frequent in the future (or vice versa)”. 

The roulette table has no memory. It is a pure-play live-in-the-moment fanatic. The chance is the same every time. 

This is not something that is natural to us pattern addicts who thrive on story telling. Even trained statisticians are not intuitive statisticians. You bend your heart and mind to accept the rules of chance. Override what seems to be true, to accept randomness. 

Our lives are short, and they may be too short to gather sufficient evidence. When we have enough evidence, it may no longer be relevant, because the driving forces have changed. Significant data mud wrestles with relevant data. 

You can harness randomness to help you make decisions, if you can admit that going right or left doesn’t fundamentally matter. What matters is going. Sometimes waiting for further evidence is just waiting. 

The trick is to overcome the debilitating fear of randomness.

Survival of the Flexible

Many of us like to think that there is our own version of something controlling everything, and that allows us to find comfort. I moved away from being religious, but I still had the idea that there was a bias to good. That gave me comfort partly because of the possibility that you can control stuff. 

Gradually, I started to get more comfort than that, from the idea of randomness. The simple driver that stuff happens because stuff happens. 

There are different types of randomness. Part of the complexity depends on the constraints. When you roll a dice, there are only 6 possible outcomes. For a coin, it is two. The Rubik’s cube is incredibly complex, with 43 quintillion (18 zeros) combinations. That is a finite... but mindbogglingly large number. By adding a layer of pattern recognition, you can still learn to create a sense of control. 

Another level of randomness is simply a pulse. The mere existence of life and change. It does not have to have intent other than a will to survive. To cope with change. That does not require insight into the future. If you have sufficient biodiversity, you can cope with most changes in an evolutionary sense. 

You just don’t know which of the survivors will be the strongest in hindsight. That depends on what happens. Even if you see the result, and played again, a different scenario would unfold. That is complexity that responds to flexibility rather than control. Reacting and adjusting. Survival of the flexible. 

Create excess control and single solutions create the unintended consequences of mono-culture. Where we do not know that what we are doing is horribly wrong, until it is too late.

Lessons Learned

Looking back far enough, there are lots of examples of extreme events (high impact, low probability). Numbers we use for risk analysis make better questions than answers, because they never include the full picture. A great book to read to give you a little bit of humility is the story of Long-Term Capital Management, titled “When Genius Fails”. It is an important book to read for those who think they have cracked the code. Thinking in “distributions” (a range of possibility) rather than simple numbers is vital. Howard Marks implores that we, “always remember the six-foot man who drowned in a river that was five-foot deep on average”. It is not just the average that matters. The statistical term is moments. You have to think in moments. How the range of possibility is made up. That includes thinking about tail risk, and what isn’t in the numbers (yet). In scenario testing, you need to plan for what could happen, not just a single path. In the same way as looking at what did happen is not enough. What could have happened? You need to plan for your plan not covering everything. With hindsight, we think we understand the world. We think the lessons we learn through mistakes mean, “if I had done it this way, this is how it would have played out.” In reality, if you had the chance again, everything would be completely different. 

Lessons from Rivers Crossed

 

Big Picture

No one has a view of the whole picture, or the ability to process it. We do not know in advance what the correct destination is, or what our future choices will be. We make our choices based on what we already know, with a limited glimpse forward of the possible consequences of our actions. There are individuals whose choices go against the grain, but if you look at a big enough picture, prejudices and bias starts to show. Daniel Kahneman and Amos Tversky opened up the field of Behavioural Finance and the study of cognitive biases. When you look at groups and group decisions, you can get a sense of how our processes work. This doesn’t mean we aren’t individuals. But we are individuals who don’t live in isolation. Our choices are affected by the choices of those around us. They are affected by the constraints of physics, time, and our very human limits. Context is everything when grasping at the randomness, ambiguity, and complexity of wrestling with personal choices and understanding. 

Big Picture

 

Point of Focus

Some of our waves of money anxiety are memories. Both of our own experiences and those of the bubble we are born into and raised in. These thoughts that push our decisions in various directions may not even be things we are aware of. The Yoga Sutras call memory waves Smriti, and they can be mighty obstacles. Smriti are not all negative. Some generational strengths get hidden beneath dirt, waiting to be rediscovered and polished. Beneath both the positive and negative lies the permanent. The point of focus that lets us unravel all the randomness, complexity, and ambiguity. Becoming aware of our subconscious, conscious and dreams and building a daily practice around that point.

Relative Size of Sun, Earth and Moon

Plan for Being Wrong

This Covid crisis was not a Black Swan. A Black Swan is something that has never been seen before, and all the evidence has been in the other direction. Every White Swan increases the conviction that all Swans are white. All the evidence confirms a belief that is fundamentally wrong. There have been pandemics before, and there were plenty of people talking about it before 2019. Hans Rosling’s book “Factfulness” (2018) listed Pandemic as one of the 5 big risks the world faces, along with Poverty, Financial Meltdown, Climate Change and World War. Financial Meltdown, Poverty, Climate Change and War are not Back Swans either. Read the book “The Black Swan” by Nassim Taleb. By definition, you can’t predict a Black Swan. You can predict that there will be Black Swans that upend our world view. You can build shock absorbers and plan for the fact that things will not go according to plan. A more important question than “Am I right?” is “what are the consequences if I am wrong?”. Plan for being wrong. Plan for adjusting the way you see the world as you engage with it.

Drawing Breath

You don’t learn much about whether a process works, when it is working. The most powerful creative forces are time and consistency. But for the long term to be long term, the process needs to be able to adapt, adjust, and accommodate. Strength, flexibility, and control in the face of randomness, complexity, and ambiguity. Like gaps in music, real mastery lies in the ability to draw breath and gain perspective. To step back and gain a broader view of how everything is connected. To use disruption as a learning opportunity. 5Rhythms is a movement meditation developed by Gabrielle Roth in the 1970s. It takes you through Waves to release obstructions and inspire creativity. You move through flow, staccato, chaos, lyrical, and stillness. The key is movement, and being still is part of that. This too will pass.

5Rhythms

Bad Beat

When I was 25, I was still living in a student style shared house. The back garden needed mowing, but I was a cheapskate. I am still a cheapskate. Instead of buying a lawn mower, I bought a machete. I left the machete on the kitchen table. At that time, a group of friends and I were very into poker. The more you play poker, the more likely you are to learn that anything that has a remote possibility of happening, will happen regularly. If you play regularly. When only one card in a deck of 52 will make you lose, and that is the card that comes. This is called a 'Bad Beat'. I didn't need a lawnmower, because friends who had Bad Beats would take turns on the back garden. Until they (and I) learnt the lesson that you should never put the things that really matter at risk. Only sit at the table with what you are prepared to lose. Even a 'Bad Beat' is just another hand.

Organised Chaos

A big part of our strength as humans comes from our forgetfulness and our detachment from our memories. Things are there, but only if they are triggered. Our creativity comes from connecting things that wouldn't normally be connected. We don't figure it out, we feel it out. Artificial Intelligence first beat people at Chess by crunching the numbers. It took it to the next level by beating humans in Go by learning to learn. Where we still excel is at bringing our special form of crazy to the table. No one sees the world as we do. A computer couldn't because it would have to forget everything else it knew. Even then, it is not clear what we remember and what we don't. It depends on our mood and which thoughts and feelings happen to bump into each other on the street. We add the logic and rigour later. If we feel like it.

Go

Heads or Tails

If you toss a coin... and call heads... and it lands on heads... you are as 'correct' in your decision as the person who called tails. Your insight added absolutely no value whatsoever. We like to add stories after the fact to make sense of things. We like to think our decisions carry more weight than they do. It makes us feel more in control of the next thing that happens. History does have value, but less in terms of answers than in terms of more beautiful questions. How we want to think about things, rather than what is. The world is complex, ambiguous and uncertain. Our decisions nudge us along, and separating whether that was luck or control is beyond the understanding of the vast majority, if not all, of us. Life lives us as much as we live life. Through storms, droughts, diseases, falls, and victories. The best we can do is cling to each other. Hold each other. Care. Take the next step, together.

Deal

There are four tools to deal with risk - avoid, mitigate, transfer or accept. 'A ship in harbor is safe, but that is not what ships are built for.' Risk is like stress, it isn't that it shouldn't be taken, it is that it should be taken consciously. Our muscles respond to stress. It is what builds strength. Strength is built over time through regular exposure. Avoiding risk altogether is impossible. Life has a way of putting us to the test. We can mitigate it through knowledge and preparation. We can transfer or share it by building support. We can accept it if we build the confidence that we can cope. We can deal.

A painting I did as a schoolboy

5% Okay

Daniel Dennett's book 'Darwin's Dangerous Idea' changed my understanding of evolution. I had heard the idea in 'The Red Queen', but it hadn't sunk in. Survival of the Fittest can suggest we know in advance who the fittest is. That isn't how it works. A lot of random stuff happens. With sufficient diversity, something can survive even if almost everything doesn't. If 5% survives *and can rebuild*, then we can cope with some pretty big knocks. The Red Queen in Wonderland says, 'it takes all the running you can do, to keep in the same place'. The important thing isn't the destination, or even knowing what is going to happen. Too much is uncertain, complex, and ambiguous. We can't know. The important thing is the running. The being. The ability to cope. Always be at least 5% okay.

Alternate History

Stale

'Bernie would've won'. 'Hillary would've won'. It is comforting to think in alternate histories, 'if things had happened differently'. They didn't. Hindsight Bias is the tendency to think where we are now was more predictable than it was. There will always be someone who got it right, particularly if they make lots of predictions, and don't keep fantastic records (especially of their mistakes). To see if someone is good at making decisions, they need a track record. The problem is... a long enough track record requires lots of decisions, and lots of time, to build confidence. There is a trade-off between sufficient evidence, and the evidence being stale. A better starting point is accepting that the world is uncertain, complex and ambiguous. Build resilience, and do the best you can.

"The idea that the future is unpredictable is undermined every day by the ease with which the past is explained."

Daniel Kahneman

Possibility, Decisions and Randomness

What happens is only one version of what could have happened. A combination of what is possible, the decisions we make, and randomness. What can happen is largely determined by our world view and our path. Our world view is determined by where we are born, our genetics, and the experiences that present themselves.  The decisions we make are based on the way we have seen the world. Our memories. Our relationships. How we piece those memories together to build a story to describe who we are and what we want. Throw the story together with our emotions, and we deal with what the world throws at us. We cope. Our emotions dance with the world - affected by what we eat, how we sleep, the space we make, the support we get and how we deal the the story we are one small part of. We take the next step.

 

Decision Making

I am a creature of habit. I like processes and patterns. Things I can understand. When I am part of a team, two things that drive me nuts are a lack of clarity around decision making, and unjustified superiority complexes. Unjustified by who? By me. We don't operate in a functional meritocracy.  I am more than happy to take instructions from someone when: 

1) I am learning from them, 

2) I don't feel like they are simply outsourcing the jobs they don't want to do to me,

3) We like each other, 

4) We share a common purpose

When there are structural reasons why any of these rules don't work, my inner elephant goes on the rampage. I can intellectually try pretend I can carry on doing what needs to be done for other reasons, e.g. money, expectations, patience, accepting that is the way the world works. I know I will fail. Inside me is a raging righteous indignation when I feel like things aren't the way they should be.

Freedom isn't a lack of constraints. Good rules can make the game far more enjoyable. Freedom isn't even free will and the ability to make the decisions. Freedom is a feeling that I am part of something bigger that I believe in. Not just a cog. An integral part of something that matters.

Self-Reflection

The temptation is to take everything that happens as evidence to support whatever we believe. Confirmation Bias. 'I told you so'. When unexpected things happen there are always lessons. Mistakes are how we learn. They are the engine of how we improve. The answers aren't normally immediately obvious. If they were, we probably would have been prepared.

'Whenever we are surprised by something, even if we admit that we made a mistake, we say, ‘Oh I’ll never make that mistake again.’ But, in fact, what you should learn when you make a mistake because you did not anticipate something is that the world is difficult to anticipate. That’s the correct lesson to learn from surprises: that the world is surprising.'

Daniel Kahneman

Take any 'I predicted this' with a pinch of salt. There will always be someone who got it right. Rather than looking for people who get predictions correct, I think the best approach is self-reflection. How unprepared was I for what happened? How can I be more resilient in the future? What lessons can I learn before venturing to teach others? What can I learn from them first, before I share insights I think I have?

The problem with the 'I told you so' approach is that it leads to doubling down on answers rather than finding more beautiful questions.

A pinch of salt, self-reflection and more beautiful questions.

Being Right

Predicting something correctly only gives the illusion of 'being right'. The world is far more uncertain than that. Nate Silver of fivethirtyeight.com gives roughly equal chances to Hillary Clinton (a) Winning Solidly, (b) Winning by a large margin, and (c) a close call where Trump could win. This means he thinks Clinton is a strong favourite, but he is far more nervous than most people thinking Clinton being favourite means she will win. Daniel Kahneman points out in 'Thinking Fast and Slow' that even statisticians aren't intuitive statisticians. We are far too willing to believe things without sufficient evidence. We overestimate our control over the world. We underestimate randomness. We don't think in 'alternate possible paths'. Even if Clinton wins, I feel very uncomfortable that he got this close. I think the world will go on either way, but Brexit and the US election make it very clear that we have some soul searching to do.

Mistakes, Repetition and Resilience

The driving force behind evolution is mistakes and repetition. Almost perfect copies again and again, with room to breathe and room to expand. When something, when anything, goes horribly wrong and there is sufficient variation... there will be survivors. The number one rule is to survive. That doesn't mean knowing what will happen. It means knowing something will happen. Plans only help for the things you understand, resilience helps for the things you don't. With humans came consciousness. With communication came shared consciousness. We can now make plans and try bend the world to our will, but we should keep that humility. The humility that comes with knowing that we don't know.

Unintended Consequences

The Butterfly Effect is the idea that if you went back in time and bumped one Butterfly, the knock on effects would change everything in the future. The future is incredibly sensitive to every action. Daniel Dennett suggests more than that. All you'd have to do is press play again. Life is complicated, uncertain and ambiguous - the role of randomness in determining our path can't be understated. Plans may help us take the next step, but require much more than a pinch of salt. Decisions have unintended consequences. Resilience and custodianship are far more realistic aims than bending the world to our will.

Better than the Book

The book was better. The book was probably better. The book gets more time to build the characters and can add more information. It isn't on the clock. If you have read Game of Thrones or The Lord of the Rings, and then watched the TV Series or Movie, you will see how plots have to change slightly. Characters get joined. The 'facts' largely stay the same, but to make the story flow, things have to change. Conn Iggulden does the same thing with his historic novels about Genghis Khan, Julius Caesar and the War of the Roses. In the appendix, he explains the changes he has made to make the story flow. The combinations. The alterations. The ordering of events.

Life is better than the book. There is more space to add details. There is less need for consistency in order for the story to flow. We tend to add the story afterwards as we explain our lives. As we talk to our friends. As we justify what we have done. As we plan what we are going to do. 

While looking for the way things are connected, I am also trying hard to let go of plot. To let go of pattern. To let go of connections that don't matter. To revel in glorious inconsistency. There is a lot of noise. A lot of things happen for no reason. There isn't always a string of causes. There isn't always an intent. Sometimes things just are.

We are natural story tellers. Life is far more interesting than that. It can let go of narratives. It can do things out of character.

Life provides the tools. We create our own stories.

Nature without Narrative