Saturday, November 03, 2007

The Ineffectiveness of Labor Unions

Remember a few weeks ago when the United Auto Workers had their strike fiasco with Chrysler?

Now, just weeks after that, Chrysler is cutting 12,000 jobs and models from their inventory.

This is the effectiveness of irrational greed in the marketplace, or lack thereof.

Thursday, November 01, 2007

10 Debunked Myths on Cognitive Science

A fairly quick read that describes...exactly what the title says it does!

Read the article.

Wednesday, October 31, 2007

Today’s Gamer, Tomorrow’s Strategic Leader

An interesting article caught my eye through one of my news aggregators over at From the article:

Video games have become problem-solving exercises wrapped in the veneer of an exotic adventure.

Certainly a first line that intrigues and piques one’s curiosity, let alone the affect the headline has on someone. Reading on:

Video games have become problem-solving exercises wrapped in the veneer of an exotic adventure. In today's fast and rapidly-changing business environment, the strategic skills they teach are more important than ever.

The article goes on to debate, through the perspective of the two authors of the book Got Game: How the Gamer Generation is Reshaping Business Forever. The authors state that instead of being like television where people are the bystander, gaming offers a suspension of disbelief and includes the gamer into the world of the game—they become a willing participant.

As such, the gamer must think strategically in interacting with their environment, propelled to win.

These skills, the article states, are indispensible to the business world. These traits are even more accentuated in multi-player online environments—the MMOGs like World of Warcraft—such that small team leaders need to leverage the abilities of their teammates in the execution of success.

This culminates in an important point:

Games teach by trial and error. Consequently, gamers learn that failure is a necessary and unequivocal part of the path to success. This is a message that is often lost in the real world, because repetitions are few and far between and therefore the stakes are too high during each attempt. In games, repetition is high and immediate feedback is provided to the gamer. While failure in the real world is disheartening, in games it serves as an encouragement to try harder. This attitude towards failure eventually permeates life outside of the game. The result is that the gaming generation is willing to take more risks and be more entrepreneurial than previous generations.

The kicker?

80 percent of managers in the US under the age of 35 had significant video game experience and that gamers had a more positive outlook on life than non-gamers. Gamers tended to prefer multitasking to individual assignments, to stave off boredom.

Monday, October 29, 2007

“Time Machine,” Two Races, and Spam

Ever get a spam email? Does the below sound like promises that they throw around frequently?

Men will have symmetrical facial features, deeper voices and bigger penises, according to Curry in a report commissioned for men's satellite TV channel Bravo.

Women will all have glossy hair, smooth hairless skin, large eyes and pert breasts, according to Curry.

According to an evolutionary theorist from the London School of Economics…in several thousand years, this could be you! That is, unless, you end up being part of that other race.

The Silicon Ball of Finance

Recently I posted a story here about complex algorithms being used to predict acts of terrorism and advise military and state leadership in the conduct of matters of diplomacy. An obvious extension of using such sets of mathematical formulas would be to predict how to win the lottery, as I mentioned in that post.

My view of the lottery, though, has changed since I devised my original concept on the matter: The lottery is a tax on poor people and those with a lesser amount of economic and financial knowledge.

What the lottery-winning seeking public should do, instead, is to use the stock market.

So, without further ado…who is better in the game of investments: A computer or a person?

Let’s start by defining a couple types of investing: There are those that believe in and practice the fundamentals: Observing P/E ratios and, essentially, applying a series of formulas to a company, an industry, their stock picks, etc. Fundamentals’ investing is in my opinion, just that: The fundamentals of investing.

Take a man like Warren Buffet: He is the epitome of someone who believes in behavioral finance. When I was much younger I remember a commercial for some large Wall Street Trading firm which stressed that after they looked at a stock, they would go and investigate it in-depth: Interview managers, examine infrastructure, and perform other in-depth activities which filled in the blanks that a fundamental stock pick couldn’t do.

The comparison and contrast is a simple one: Fundamental investing is a very logical, linear, rational method of investing. Behavioral investing, on the other hand, has a million shades of human emotion involved and, therefore, is open to the irrationalities which we are prone to as humans.

And that’s it: A computer program which attempted to account for the human aspect a investing would need to be exceedingly complex.

The odd part of this whole stock market thing? The irrationalities which incite risk in the system is why the stock market goes up as much as it does over time and is why any money put into the stock market as a portion of Gross Domestic Product adds to GDP by factor of 400 percent; in other words, when constructing the value of GDP if you put $100 into it as a form of investments—anything in the stock market—it is calculated to increase as a portion of GDP at a rate of 4 to 1, making that $100 investment worth $400 in terms of GDP; contrast that against the 1:1 ratio of government spending.