# Quotes: Mostly with Economic or Academic Twists

## Sam Clemens' version of the Hobson's Choice

“If you don’t read the newspaper, you are uninformed. If you do read the newspaper, you are misinformed.” --- Mark Twain

## No. 43: Never Poetic --- Sometimes Right

He [Buffett] also praised President George W. Bush for coming to the financial system's rescue at the height of the credit crisis in 2008 with what Buffett called the 10 smartest words in economic history: "If money isn't loosened up, this sucker could go down." --- CNBC reporting on OmahaStock 2013

## Game Theory Termination?

"Successful investing is anticipating the anticipations of others." --- John Maynard Keynes (via Josh Brown).

Can we use the ideas of game theory to show there is no infinite regress..."anticipating the anticipation of the anticipation of ...? Seems like a project.

## Wisdom of Crowds?

"In individuals, insanity is rare; but in groups, parties, nations and epochs it is the rule" – Nietzsche

## Occam Inversion

"Elaborate models can give an impression of providing results that are in fact not justified, whereas, with simpler models, it is more apparent if the results are not justified. The elaborate models are like black boxes which are supposed to give you the answers. And you do not know if anything goes wrong." --- Charles Stein in his Singapore Interview well begun but rerouted by Singlish at the end.

## Time Integrity

"A wizard is never late, nor is he early, he arrives precisely when he means to." ----- Gandalf, Lord of the Rings

An amazing number of people seem to think that they are wizards.

## No Simple Guides ...

...Greek stock market had risen by 30% last year despite a contracting economy while in Shanghai stocks were down all year as the Chinese economy grew by 7%. --- Josh Brown recalling his conversation with Steve Leisman, 3/9/2013.

The tenuous connection between economic growth and equity returns is often a surprise to optimists who still think the world makes sense--- more details in a nice piece in The Economist.

## "Price Fixing" --- Hello?

"For example, State Farm, by far the country’s largest insurer and a
well-managed company besides, incurred an underwriting loss in eight of the eleven years ending in 2011. (Their financials for 2012 are not yet available.) There are a lot of ways to lose money in insurance, and the industry never ceases searching for new ones?"
--- Warren Buffett, Letter to Shareholders (3/1/2013)

I am reminded of American Airlines' Crandal (a Wharton Alum) who constantly preached in public how damaging pricing had become in the air travel industry. He was right. Buffett is also right when he says (sotto voce): "My friends in the insurance club, can't we all get along? And --- Shush brother!--- there is no anti-trust problem to someone thinking out loud in public.

## Reflection

"The first Star Trek episode aired closer in time to the ratification of the 19th Amendment --- guaranteeing women in the US the right to vote --- than to today." --- public source cartoonists Randall Munroe (aka XKCD, via Dean Foster)

I've often used this structure to help put things in perspective. For example, the time when I graduated from college was closer to the Crash of '29 than to the present.

## Bottom Line

“You never know what someone is worth until they declare bankruptcy” --- "Anonymous" quoted by the often discomforting James Altucher

## Bottoms of Another Kind

“You could be the best artist in the world,” he said, “but if you don’t know anyone then nobody will know you.” --- Spencer Tunick, famous photographer of massive groups of people au naturale. He may also be the world's greatest networking genius; he could call Madonna or Putin and they would take the call (well, maybe Putin would just do a call-back).

## "Short Term" Monopoly--- Strategic Success

“Strategy is antitrust with a minus sign in front of it.” Columbia Law School and Business School professor Tim Wu.

## As Koba Said... Or Didn't

“A single death is a tragedy, a million dead is a statistic.”  --- widely attributed to Stalin, but there is no evidence that he ever said it. It can be traced to Erich Maria Remarque, the pacifist author of Im Westen Nicht Neues.

When the publisher Robert Giroux asked T.S. Eliot if he subscribed to the adage that most editors are failed writers, Eliot said that he did. But then he kindly added, "So are most writers" --- lifted from a piece in the WSJ 1/18/13

## Insight at Long Last

"Human beings...you gotta give them a break. They're all a mixed bag." -- Gordon Gecko, fictional investment banker in Wall Street 2, speaking to his daughter in the last line of the movie.

## Constructive Comment

“There has never been a statue erected to honor a critic.” --- Zig Ziglar, super salesman and motivational coach. RIP 2012.

## What a President of Princeton Pondered in 1920

"I cannot bear to think that our young men are merely living four years in a country club and spending their lives wholly in a spirit of calculation and snobbishness." ---  John Grier Hibben, President of Princeton University on reading Fitzgerald's This Side of Paradise (1920).

## Eric Barker on Motivation (and Dan Pink's Drive)

For jobs that require creativity and problem solving, research shows we’re motivated by a desire for autonomy, mastery and purpose. Money is really only a motivator for work that does not inspire passion or deep thought. The single best motivator is progress, and the best predictor of success is “grit.”

## Changing TImes, Changing Snacks

"You are what you Tweet." --- Kelly Evans (CNBC). Quoted by Josh Brown. Now how about re-Tweets?

## Malthusian Messages

Paul Ehrlich had written in The Population Bomb (1968) that it was "a fantasy" that India would "ever" feed itself. By 1974 India was self-sufficient in the production of all cereals. (from an article in the Atlantic Monthly on Nobel Laureate Borlaug).

## Accused Joker

"I have been accused of being a joker. But the most successful art to me involves humor." — Undated interview, circa 1970s; published in Man Ray: Photographer, 1981.

## Duration Risk

"Someone is buying that debt. What's going to happen when growth picks up and interest rates rise? There's going to be a reversal and people will have losses." --- Lloyd Blankfein at The New York Times' Dealbook Conference 12-12-12.

A bond with duration 15 will go down 15% in price if interest rates go up 1%. Bond rates are now lower than in any time in the history of the United States. Most likely, bond rates will go up. Most likely, people will lose massive amounts of money on bonds.

No one knows when this is likely to happen, but the odds are that it will happen by 2017. Sell your bonds? Yes please do, but the bonds will still exist. Someone will own them when the piper is to be paid. Future financial loses of considerable magnitude are "baked into the cake." These should almost be viewed as a public liability.

The flip side? If you are a corporate treasurer --- even one sitting on a mountain of cash --- you serve your firm best by issuing long term debt. You may not get the benefit right away, but you will be beneficiary of the future duration losses of the credit holders.

The alternative? Growth does not resume. Interest rates continue for a long, long time to be so low that there are negative real yields. The grand bond-holding institutions do not get sunk, but all of the risk averse savers do get boiled by degrees.

The "disciplined" 50-50 equity/bond holders are only 50% boiled.

If you must own bonds, "Stay, short, my Friend." (e.g. duration <3), or best yet, "Stay Hungry, Stay Foolish"

## Worth Stealing?

Erick Falkenstein used the phrase "intellectual equivalent of Stockholm syndrome" and I love the implied meme. The rest of the sentence, "not so much" as my young friends say.

Can you really quote somebody when you real must rip the phrase out of context? It's a moral conundrum.

## Another 1% --- For What?

"In candor, I should add that I see no circumstance under which rebalancing through an adviser charging 1% could possibly add value." --- Jack Bogle, responding to a question.

It is profoundly amazing to me that people pay investment advisors the fees they pay. If I were going to buy an apartment building (a small one!), I'd need professional advice on legal structure, taxation, financing structure, etc. but to pay someone to tell me to ``shift my allocation" from 70-30 to 75-25? That's nuts.

## Holy Smokes

"The cigarette is the deadliest artifact in the history of human civilization," --- Robert Proctor of Stanford University. "It killed about 100m people in the 20th Century." (quoted recently)

## War

"Every war is ironic because every war is worse than expected. Every war constitutes an irony of situation because its means are so melodramatically disproportionate to its presumed ends" -- Paul Fussell (1924 -- 2012) a man of letters, most famous for fiction and non-fiction focused on the Great War (1914--1918) quoted via AP

## Bucket List

"...me he propuesto ser capaz de entender una película en inglés antes de morirme." --- Heartfelt comment on a blog for Spanish speakers who want to learn English.

## Carlos Fuentes (11/11/1928 -- 5/15/2012)

"There must be something beyond slaughter and barbarism to support the existence of mankind and we must all help search for it." --- Sent by Fuentes via Twitter, his last public statement.

## Reputation

Shakespeare speaking through Iago sees reputation as “an idle and most false imposition: oft got without merit, and lost without deserving.”

Quoted in The Economist (5/18/2012) in a laudatory article about Jamie Dimond where the stress was on "lost without deserving," though I see no evidence that Dimond is any well less regarded now than before the London Whale. Still, it's a serious test.

"The inherent vice of capitalism is the unequal sharing of the blessings. The inherent blessing of socialism is the equal sharing of misery." — Winston Churchill, via Ed George.

Personal Note: Another downside of "socialism" as instituted in the real world is the incorporation of "connections" as a medium of exchange, a store of value, and (almost) a unit of account --- i.e. money in the bank.

Connections are valuable in any system of government, but in the most extreme forms of socialism (or tribalism) connections become the coin of the realm.

## Cycle Time

"The future is here. It’s just not widely distributed yet."  —William Gibson, from his novel Neuromancer (1984) where he also coined the term “cyberspace.”

Personal note: Cycle time is way down. If "it's cool," it goes global in how long? Days? Minutes? Facebook and Twitter now metronome the world at a damn quick pace!

## Harald Bohr on Teaching

Harald Bohr,was a brilliant lecturer but his brother Niels Bohr was a terrible lecturer. Harald was once asked to explain the difference between his style and his brother's.

He said, "At each point in my lecture I speak only about those things which I have explained before, but Niels usually talks about matters that he means to explain later." (Source:Gino Segre, Faust in Copenhagen, p.53.)

Personal Note: This quote has helped me with a long standing problem. How can good researchers who want to communicate still give crappy lectures? Generously, one could say they have not read Chekov. To remold the familiar Chekov quote in an active voice: If you use a shotgun in the third act, you have to hang it on the mantle piece in the first act.

There are many paths to the crappy lecture. Lets take one step at a time.

## Oracle on Bonds

"Right now, bonds should come with a warning label." ---Warren Buffett, from the 2011 Letter to Shareholders.

## Getting to the Point

"Those who seek happiness in pleasure, wealth, glory, power, and heroics are as naive as a child who tries to catch a rainbow and wear it as a coat." ---Dilgo Khynte Rinpoche

## From Angst to Pay Dirt

"Value is about the anxiety of the seller. It's compensation for taking on that anxiety, and the research problem is always whether that anxiety is a derivative of transitory or permanent factors — whether it will damage the enterprise that's been afflicted — the company, the industry, the sector — in a lasting way or not. That's the research problem. " --- Lew Sanders, in an interview on value investing.

Personal Note: For a while in the late '80s, Lew Sanders was my boss.

## True to Breed..

"As sociologists Richard Arum and Josipa Roksa noted in their recent study, Academically Adrift, students’ cognitive performance is, on average, mediocre..."  --- AAUP Report on Academia and the Great Recession.

Years ago I began to think that mediocrity was somehow linked with the average --- or perhaps the median. What a relief to know that his suspicion has now been born out by sociological research.

## Saying "No Thanks" to Bonds (Feb 2012)

“We are literally running out of superlatives to describe how much we hate bonds. Yields are pitiful, dangers of even a slight recovery that could wreak havoc for long-duration portfolios loom, and monetary policies globally certainly have added to the specter of rising yields.” --- Jeremy Grantham, GMO’s investment outlook for 2012

"Bonds promoted as offering risk-free returns are now priced to deliver return-free risk." --- Warren Buffett, quoting the late investment banker Shelby Cullom Davis.

## Feynman on Experts

"Science is the belief in the ignorance of the experts." --- attributed to Richard Feynman (by Matt Ridley 10/2011)

Heat directed toward the ignorance of experts is nothing new or particularly exciting. Still, Feynman quotes can be head-turners, even when they would be dismissed as adolescent fumings if said by others.

## Every Writer Knows...

“It is very difficult to tell the truth.” --- Lev Nokolaievich Tolstoy

## Tight Writing!

Legend has it that Ernest Hemingway won a bet by writing a six word short story:

"For sale. Baby shoes. Never worn."

I would have paid off on the bet. It's hard to imagine how six words could be more moving. Snopes explores the background to the legend.

## Learn Something Every Day?

"Most economists use information very efficiently. They take what they learned in graduate school and make it last a lifetime." --- Anonymous (and not me, this time)

## Long Dated Options

"Both Charlie and I believe that Black-Scholes produces wildly inappropriate values when applied to long-dated options." --- Warren Buffet in his 2010 Letter to Shareholders.

## Summers’s Law (yes, after Larry --- a son of Wharton)

"This [law] holds that it takes just as much time to write an unimportant paper as an important one. Hence, you might as well work on important topics."

The quote is from Don Davis's useful essay on how to choose a thesis topic, a piece worth reading even by those for whom a thesis is a nostalgic memory.

The puzzle --- of course ---is how one tells what is important. This is highly field specific and even personal. Also, we can all list past examples of apparently unimportant investigations that eventually had huge impact. Still, if we are honest with ourselves, we see that such examples are largely sophistic.

In our hearts, we all have some pretty clear sense of the problems that are "more important" and those that are "less important," so I'd say,

"Estimate the gradient and go up hill as consistently as you can!"

Also, if you are ever lucky enough to identify a "really big problem" for which you have a well-informed approach, don't sit on your hands.

## Did Buffett Really Say That?

“Rule No. 1 - Never Lose Money.  Rule No. 2 - When you do lose money, call in Becky Quick and the camera crew for some folksy chit chat over root beer floats.” - Warren Buffett

Well, No. It's one of a nice set of "quotes" that echo real ones but which are more properly a product of the fertile imagination of the ReformedBroker.

## Txebixev's Inequality?

I thought I knew all of the spellings of Chebyshev until I saw the Catalan translation of Gabor Lugosi's Concentration Inequality paper. In Catalan, the letter x is used to convey the "sh" phoneme, so this rendering does not sound as strange as it looks.

## No Bold Inferences SVP

“Sometimes, the best thing we can do is not learn from what just happened.” --- Jonah Lehrer

## To Generalize ... In Blake's Sense

I always cringe when I hear someone say "Germans always follow the rules" or "Frenchmen only care about their stomachs."

You can imagine a sequence of such statements, and in such a sequence these two will surely seem tame. Most adult memories can call up analogous assertions that are poisonous. We make asses (or worse) of ourselves when we speak of people as members of a collective.

William Blake, the romantic poet, said: "To generalize is to be an idiot."

Presumably, Blake was concerned with poetic distinctions and (again presumably) he hated to see his beloved distinctions blurred. Still, even for the non-poet, Blake offers good advice.

We all see more clearly when we focus on the individual, the specific, or even the rare. We all write more effectively when we create distinctions. It is criminal to erode or corrupt them.

Caveat: In mathematics, generalization has a technical meaning. It really means the relaxation of assumptions, and this is bundled up with the dual task of articulation of distinctions. This is a noble endeavor, and generalization in the mathematical sense deserves full immunity from Blake's condemnation --- even if we agree that there are many mathematical generalizations without a pulse.

## Culprit Found Out

"It was probably John Dryden, we learn, who originated the prejudice against ending sentences with prepositions." --- Essayist Barton Swaim in a WSJ book review. (Thanks to Ed George for the link).

## Cutting Down on Mental Overhead

"By relieving the brain of all unnecessary work, a good notation sets it free to concentrate on more advanced problems, and, in effect, increases the mental power of the race." --- Alfred North Whitehead, writing in An Introduction to Mathematics (and quoted by Terrence Tao who has a nice essay on good notation).

Also, Abadir and Magnus have concrete recommendations that focus on econometrics and statistics.

## A Diagram of Some Kind

"At Princeton High School I had the same English teacher for the first three years. Her name was Olive McKee. She put a great deal of emphasis on writing. In the average week, she would have us do three compositions. We could write anything we wanted to—poetry, fiction, or a story about a real person. But what it had to have, even if it was a poem, was a diagram of some kind that showed the structure of what we had done. You had to turn that in with your piece." --- John McPhee, in a recent interview in the Paris Review.

Such an exercise that would profit most mathematical expositors. We tend to think that we are exceptionally clear --- even when we are exceptionally muddy. A "diagram of some kind" may be the tool that can shake the scales off our eyes. Naturally, the authors who would benefit the most from a diagram are precisely those who would resist it the most.

## Something Off Base?

Q: "Why do computer scientists so often mix up  Halloween and Christmas?"

A: "Because 31 Oct = 25 Dec." --- Modified from ancient sources.

By the way, 42 really is a remarkable number as the Wiki explains. Among many other charms, 42 in base 2 is 101010.

## Dog That Did Not Bark

"Albert Einstein introduced ${\Lambda}$ into the field equations of general relativity for two fundamental reasons. One is that the equations allowed it to be there. For a very rough analogy, the integral of a function like ${f(x) = 3x^2}$ is not just ${F(x) = x^3}$ but rather F(x) +C where C can be any constant. It may be simplest to think that C would cancel to zero, but it could be anything." --- From an essay by K. W. Regan on the cosmological constant Lambda.

This suggests a curious research strategy. Take any model and look for its "flexibilities" and then contemplate the new richer model. This may lead to nothing, but you can't tell until you look.

## Two Steps: Grand kids of Children

"You really get to enjoy your children when they become grandparents." --- Rosalie Feinsod (at about age 90) via a friend of this page. This is a line to ponder.

I am also reminded of a lunch time comment of my colleague Larry Shepp: "Grand kids are great, and the only way I know to get them is to have kids."

## What You Did Not Know You Knew...

"Mayday" is actually "M'aidez" (or, "help me" in French)  --- So obvious but so little known!

You can find this in the article in the venerable Wikipedia in the article on "SOS" which has tons of other amusing information.

BTW, in Cancun (but not the rest of Mexico) you can dial 911 for help. The standard help number in Mexico is 066.This is "news you can use" --- but only in an emergency.

## Clueless on Wall Street? (10/29/2011)

“We are the 99% that will no longer tolerate the greed and corruption of the 1%.” ---- The most consistent tag-line of the "Occupy Wall Street" crowd.

No doubt about it, I love a fine sit-in. I was a senior at Cornell in '71 and protesting the Vietnam war was not a question but an obligation.

Still, the OWS adventure, seems to lack a sustainable theme. Perhaps its biggest attraction is the opportunity to live cheaply and safely in a tent in the heart of NYC during a lovely Indian summer. One can take in the Met, MoMA, and have an experience to last a lifetime .I would have grabbed that opportunity as a 20 year old. It seems appealing now.

Is OWS a real social movement?

One benchmark for economic marches is the Bonus March in the spring of 1932. (Sidebar: most marches take place in the spring --- OWS is strange in several respects.). The Bonus March was not a media event, it was a sincere call for help that was well deserved. The Bonus March should touch any well-informed human heart. The march was also put down by the US Army --- some would say with brutality. Douglas MacArthur generaled the dirty work.

For all the pathos of the Bonus March, it had no material, economic effect.

So, what effect do you expect from a media event with no visible integrity --- one that boasts a cheerful ignorance of any economic timelines (or payment schedules), and one that bases its claim on our attention on what looks like nothing more than naive self-righteousness and the magic of NYC in the fall?

The judgment of the American public is unpredictable and the emergence of social media may change some rules, but anyone who expects the OWS adventure to be more than a tempest in a teapot owes us some linkage to the historical record.

## One Can Be Enough

I have discovered that it is enough when a single note is beautifully played. --- Arvo Pärt, Estonian composer of very modern music.

## Six for Six

"Les mathématiques sont comme le porc; tout en est bon." --- Lagrange (by attribution ---original source not located --- thanks due Lyle Ungar)

In Faulty Towers faux-French: "Zee mathematics are like zee pig; all of it iz good."

(Photo Credit: Shot by Pat from her phone in front of a restaurant in Evanston IL (10/2011). We liked he look of his place, but we already had reservations elsewhere).

## Got the Bug?

"Gold Mine: A hole with a liar standing next to it." --- Mark Twain (undocumented attribution).

Also, check out the piece, "You can tell you are a gold bug if ..." at ReformedBroker.

## Willing Suspension of Disbelief

"When you're watching Shakespeare and the actor says he's a king, you just make-believe, the suspension of disbelief is willing. To enjoy the play, you need to feel like this guy who's done three appearances on "Law & Order" and a Viagra commercial is actually a king. If you don't, you can't follow the play". --- Penn (of Penn and Teller) writing in the WSJ 9/2011)

## Financial Genius

"The musicologist Ludwig von Köchel systematized, cataloged and published the musical output of Wolfgang Amadeus Mozart—he's the "K" that denotes a particular Mozart composition. Köchel was a botanist and mineralogist as well as musical scholar, but Mozart was the genius. In the matter of income and wealth, savings, and investment, the Köchels are the Friedmans and Schumpeters and Hayeks. The Mozarts are the Fultons and Edisons and Jobses." --- James Grant (writing in the WSJ 9/2011)

## Pair off in Groups

"There are 10 kinds of people in the world, those who understand binary and those who don't." --- Jonathan Kariv (Penn Student)

## One Step at a Time

"First you must learn the material; then you can afford the luxury of understanding it." --- Anonymous Web Wag.

I agree with intention of the Web Wag's assertion, though I would add some detail.

There can be honest debate about the order and proportion of "intuition" and "formalism" as one goes about learning of mathematics. For my money, it at least makes sense to be damn sure that everyone is at least clear about the meaning of the assertions before launching into some great exposition about the intuitive ideas.

My own experience is that one builds intuition and mastery of the details in a stair-step process.

My preferred process is to consider "model problems" where intuition and logic need not wait too long to make friends with each other.

My own experience is also that if someone cannot define for me the terms in an assertion, I simply cannot understand what is being talked about --- even if I have a great will to do so.

There are some few people (I've known perhaps three) who seen to have a legitimate intuition in some problems where they still have only a "modest" mastery of the "formalities." These are rare birds.

Most people who claim to have "intuition" without having any real formal understanding are mostly kidding themselves. Their "intuition" disappears quickly when the time comes to solve any honest problem.

Caveat: I am thinking about this as a mathematician engaged with the question of how one learns and does mathematics. History surely provides many examples of physical scientists (and others) who had great intuitive insights that were years ahead of formal explanations. If you are on that bus, I am happy just to wave.

## How Many is Experts Do We Need?

"Japan’s science ministry has dispatched more than 200 tsunami experts to map where and how high the waves came during the tsunami."--- USA Today 4/24/2011.

By my calculations, this is about 150 more than the number of tsunami experts the world requires.

## Our Future

"Remember, children are our future, and the majority of them are B students. If that doesn't scare you, it probably should." —Scott Adams (Creator of "Dilbert.") WSJ 4/13/2011.

## As Yogi Berra Said --- Probably Not --- But Credit Him Anyway

"The thing about the unexpected is that it's likely to surprise you."

## New Improved: Hand Grenades post the Pineapple

"Later research showed that the segmentation did not improve fragmentation. Improved-fragmentation designs would later be made with the notches on the inside, but at the time, this would have been too expensive to produce." --- from the Wikipedia article on hand grenades. It seems that the "pineapples" of WW2 had cosmetic appeal, but the modern (externally smooth, internally notched) grenade will fragment far more effectively.

## Hobgoblin of Small Minds

“Whatever you do, be consistent in your methods regarding momentum/mean-reversion, and only change methods if your current method is working well.” --- David Merkel, quoted at Abnormal Returns.

Yes, he was kidding.

## Best CEOs and Benchmarks

"Many of our CEOs are independently wealthy and work only because they love what they do. They are volunteers, not mercenaries." --- Warren Buffett, 2010 Letter to Shareholders.

From the same letter we have a small poke into the academic eye: Speaking of the judgment of asset managers, the Wizard of Omaha says "How the record has been achieved is crucial, as is the manager’s understanding of – and sensitivity to – risk (which in no way should be measured by beta, the choice of too many academics).

For the record, the generous Wizard gets my vote; beta suffers from the peso problem --- and the disease is progressive.

## History's Ultimate Lesson

"The only thing we learn from history is that we learn nothing from history." --- Friedrich Hegel (or perhaps someone else --- the story is a little muddy ---even if the quote is crisp).

## Worst than Nothing ...

“In terms of risk control, you’re worse off thinking you have a model and relying on it than in simply realizing there isn’t one.” --- Emanuel Derman

## Propoxyphene in the Balance

"It looks like it offers placebo benefits with opioid risks." --- Sean Hennessey, UPenn epidemiologist (February, 2011). See "Worst Drug Ever"

Ouch! No utility theory needed here.

"Gold historically leads major moves in other commodities by an average of 10 months." --- Ned Davis Research (2/2011).

I generally like Ned Davis, but this seems too naive to be useful. Still, until you look, you don't get a vote and I have not looked.

## Cheese Hunt

"For large cap stocks, price momentum and insider trading historically provided the most explanatory power among the six factors and are weighted heavily in the current optimized score. Among the small cap universe, the earnings and fundamental factors joined with insider trading and price momentum to explain returns." --- Gradient Analytics (research report 2/2011)

## Gustatory Prowess

"Anyone can cook!" --- Auguste Gusteau in Ratatouille. Sadly, Auguste was not a good cook.

## Writer's Block --- Evidence for a Cure

Many writers have offered advice about how to overcome writers' block, and there is a research paper from the VA Hospital in Brookline MA that gives the best evidence of the effectiveness of the treatments. Take a look; the paper is as brief as any I know. Due to the unusual nature of the paper, it is published along with the referee report.

"When's the best time to buy? Travel experts have long said Tuesday is when sales are most often in place, which is true. An analysis of domestic fares shows that Wednesday also has good—and occasionally better—ticket prices." WSJ 1/28/2011

## ISM and Energy Sector Returns

“Energy is historically the best performing sector when the ISM is above 50" --- Goldman Sachs commodities strategist, speaking October 2010.

Well, you have to give the rascal credit. Energy has led the pack in 1Q2011 as the ISM moved convincingly through 50. Materials and Industrials nipped at Energy's heals, but other sectors were left in the dust --- especially utilities and consumer staples.

Oh, and the idea that the consensus is always wrong? Every wire house was negative on utilities out of the 2011 gate --- and they were all RIGHT.

## Steepening Yield Curve?

"Typically, consumer discretionary, IT, energy, and materials are the top four performing sectors on average when the yield curve is steepening as a result of rising long-end yields." --- Toby Walker (Morgan Stanley Research Report)

## Easy to Forget --- Empowering to Remember

"It’s also best to keep in mind that obtaining a solution is only the short-term goal of solving a mathematical problem.  The long-term goal is to increase your understanding of a subject." --- Terrence Tao, from his Blog.

## Write It Down!

"Every composer knows the anguish and despair occasioned by forgetting ideas which one had no time to write down.".-- Hector Berlioz (quoted by Terrence Tao).

"Every man is, or hopes to be, an Idler". -- Samuel Johnson.

One may note that Sam was a pretty productive guy, but incessant work never diluted his appreciation for the possibility of future idleness.

BTW, the phrase "salad days" is often misused; in fact, it is misused here.

## Touché !

To many market participants, this seemingly random walk is an exercise in frustrated expectations. Let’s call itFooled by Talebto separate the true low correlation, random outcomes from the hard-to-understand but non-random events. --- Barry Ritholtz (11/30/2010)

## Whose Problem is a Weak Dollar?

Long ago John Connally, former governor of Texas and Nixon’s Treasury secretary, had an honest answer. He told a group of European central bankers:

“The dollar is our currency, but it is your problem!”

Incidentally, my father and John Connally were contemporaries at University of Texas Law School, and they helped each other in a few minor ways shortly before and after WWII.

## Tenure Factoid

"As of 2007, 21% of U.S. faculty members were full-time and tenured, down from 37% in 1975." --- WSJ 10/22/2010 Putting a Price on Professors

There are some definitional issues with this statement, but let's take it at face value. It then seems that two factors are at work here. Non Ph.d. granting institutions are making many more term appointments --- those that are not tenure track. Also, Ph. d. granting institutions have seen an explosion in the number of post-doc positions along with a modest contraction in the number of tenure track positions.

## Superb Inversion

"With little power comes little responsibility." --- Shane Jensen 10/19/2010 at lunch.

My colleagues say many clever things, but few are suitable for the quotes page. Shane's quote is a classic "inversion," one of a class of quotes illustrated by many examples in my Theory of Quotes.

I did think I knew the context of the original, but I am happy to have checked. My guess was Douglas MacArthur and I was very, very wrong.

## Alcohol --- Al Humm?

"The origin of distilled spirits is far more recent, and is traced to Middle East or China at about 700 AD.  The word alcoholal kohl – is Arabic in origin, like many other words that begin with 'al,' --- like algebra, algorithm, alchemy, and Al Gore." --- from Psychology Today (10/2/010)

This is a "terminal reverse" --- another theme considered in depth in my (still unorganized but many page) Theory of Quotes.

## Perspective

"It is not (about) the money/material issue but your family, your friends, your personal life; time to appreciate the colors, the sunsets, the flowers, the weather, the places, the people," --- Carlos Slim, age 70, the world's most wealthy person, Reuters 9/30/2010

Too some extent, this plays like the scene in the Godfather II, where the retired Don plays with his grandson among the tomato plants. Still, to me, Slim --- like the Don --- has the right view.

There is a time when the optimum strategy is to smell the roses. It's just hard to know the time.

## Irving Kristol (1920-2009)

Famous for many things including the definition of a neoconservative as "a liberal who has been mugged by reality."

"It requires strength of character to act upon one's ideas; it requires no less strength of character to resist being seduced by them."

Kristol's cut on the (possibly) double-edged influence of books:

"After all, if you believe that no one was ever corrupted by a book, you also have to believe that no one was ever improved by a book (or a play or a movie). You have to believe, in other words, that all art is morally trivial and that, consequently, all education is morally irrelevant. No one, not even a university professor, really believes that."

## Whose Ox?

“The list of industrial countries wishing to depreciate their currencies is not matched by a list of emerging economies happy to let their currencies appreciate significantly." --- Mohamed El-Erian (9/2010)

"The BP president said yesterday that the company would survive. That's like someone running over your dog and saying, 'Don't worry, my car is fine.' "—Jimmy Fallon

## At First Confusing

"What LIBOR used to indicate, it really doesn't indicate anywhere near as well as it used to."

This sounds like something Yogi Bera could have said, but Jim Vogel (WSJ 9/6/2010) continued:

"When the system was far more leveraged, stress would appear first in the shortest-term borrowing market, that is --- interbank lending. Now it's far more likely to be seen in longer-term corporate credit spreads or in stock prices."

In the end, the assertion makes linguistic sense, even if it is not entirely convincing. Two questions remain: (1) is it true? (2) if it is true, why is it true?

I'll throw in a third question: (3) if it is true, will it stay true?

## Small and Unseen

"There’s a huge microbial biosphere hidden beneath the surface of the earth – possibly comparable in biomass to the plant life we can see on the surface." -- Jeffrey Marlow writing in the NYTs 9/5/2010.

These little critters live in rocks; they're called chemolithotrophs and they use carbon dioxide and hydrogen to make methane without ever seeing the sun. They may be the antecedents of the lazier critters that do crutch with the sun.

## Hints from the Bard

... our play. Leaps o'er the vaunt and firstlings of those broils, beginning in the middle, starting thence away, to what may be digested in a play.

These lines from the prolog of Troilus and Cressida offer a useful hit to writers of scientific papers. We do have to lay out our terms, but if we are careful we can artfully begin in the middle of things. Like Shakespeare, we also must be mindful of what can be digested.

## Home Cookin' and Eternal Truth

“A downstate Illinois boy loves the Steak ’n Shake as a Puerto Rican loves rice and beans, an Egyptian loves falafel, a Brit loves banger and mash, an Indian loves tikki ki chaat, a Swede loves herring, a Finn loves reindeer jerky, and a Canadian loves bran muffins,” he wrote. “These matters do not involve taste. They involve a deep-seated conviction that a food is absolutely right, and always has been, and always will be.” --- Movie Critic Roger Ebert, survivor of jaw cancer, no longer mechanically able to eat.

## Even Virginia Corn?

"We never repent of having eaten too little."  attributed to Thomas Jefferson circa 1825.

## Sarcopenia

This is still a new word (9/1/2010) but it has a future. It means "loss of muscle" and it is a problem with an aging population, much like osteoporosis, except that sarcopenia puts men as much at risk as women. The word also sparks a debate: "Is the pharmaceutical industry trying to convert a natural condition of aging into a disease that requires regular medication?" It's a good question, but I'd take the pill if it existed.

## No Philosopher's Stone

"My background --- a Ph.D. in economics and having worked at the Fed --- is basically a formula for hating gold." --- Maria Fiorini Ramirez (8/2010)

## Clever Old Coot

“I plan to work past 100 but to do so I may have to learn to think outside the box.” --- Warren Buffett on the occasion of his 80'th birthday. (wsj)

## Unsalted Words of Sam Zell

“I’m not disrespecting anybody. I’m trying to make everybody uncomfortable.” --- Sam Zell, offering perspective on one of the "pep talks" to the staff of the Chicago Tribune.

Choosing a favorite Sam Zell quote is harder than choosing a free toy at FAO Schwarz. Here is a great list. OK, I'll give you one more (if you remember Barry Goldwater --- fondly or not.):

“Extremism in the pursuit of opportunity is not a vice.”

## Straight from the Top Newfie's Mouth

“This was my heart, my choice and my health. I did not sign away my right to get the best possible health care for myself when I entered politics.” --- Danny Williams, long-time Premier of Newfoundland and Labrador, speaking to the Canadian Press from his condominium in Sarasota, Florida, where he was recovering from heart surgery performed in the Sunshine State.

## Self Truths and Half Truths

Pondering out loud about the autobiography in process, he said ---" I’m already constructing the lies I’m going to tell.” --- from an interview with John le Carré

## What Grows and Grows ... Until it Doesn't

"I will go so far as to say that not only growth but capitalism itself may be in part dependent on a growing population." --- Bill Gross in his 9/2009 essay

This is a tempting theme, even if boldly speculative. The tormenting example is Japan. We'll see what happens in Italy, but at least they have immigration.

## Reach for the Top

“It is remarkable that a science which began with the consideration of games of chance should have become the most important object of human knowledge.” (Laplace, 1812, quoted in the IMS Annual Meeting Program 2010).

## Focus, Focus

"You can fool some of the people all the time, and those are the ones you want to concentrate on." --- attributed (by Boca Joe) to George W. Bush but I doubt it. First, it's mean spirited --- and GWB was not --- and it's snappy ---

Another faint attribution that is is not quite related but which I don't want to forget so I will hang it on Yogi Bera: "I don't want to make the wrong mistake."

## Basis for Choice

"Half of the American people have never read a newspaper. Half never voted for President. One hopes it is the same half."--- attributed to Gore Vidal (full source unknown).

## True Test

"When I am working on a problem, I never think about beauty. I only think about how to solve the problem. But when I have finished, if the solution is not beautiful, I know it is wrong." --- Buckminster Fulller (quoted by Jerry Kazdan).

## Ah to be Blessed...

"Logic merely sanctions the conquests of the intuition." --- Jacques Hadamard, as quoted by M. Kline in Mathematical thought from ancient to modern times (New York, 1972).

## Last Work

"I wrote an analytical solution to a sixth order differential equation as a hypergeometric integral, derived asymptotic approximations, matched the boundary conditions, and finally went to a computer to make graphs. The machine took about a minute. Then I solved the whole problem numerically, and the same machine took about two seconds. That was the last analytical work I ever did!" --- R. E. Dickinson (quoted by J.P. Boyd)

The the same essay, Boyd also quips:

In a language of Papua New Guinea, the word "mokita" is used to denote "things we all know but agree not to talk about".

## Not Sexist in 1960 but Now Who Knows?

“Statistical models are like bikinis: what they reveal is suggestive, but what they conceal is vital.” –John Cassidy, passed along by Mark Zhu.

"An academic talk should be like a woman's skirt. Short enough to be interesting and long enough to be decent." --- quoted by Marianna Pensky at the beginning of her Wharton Statistics Department seminar (3/31/2010).

## Relative Merits

"I never really studied business in school. I kind of wish I had, but how boring is that?" --- Mick Jagger

Well, Mick --- Can I call you Mick? --- I did not see the option box ``world's most successful Rock Star" when I filled out the form.

From Sir David Cox I recently (8/2010) learned that Mick Jagger attended LSE but left his studies to pursue his music career. His tutor --- a fellow guitarist --- was sympathetic to the lure of the road, but told Jagger, "Music is great, but you know there is no money in it."

## Lunch!

The history of every major galactic civilization tends to pass through three distinct and recognizable phases, those of Survival, Inquiry and Sophistication, otherwise known as the How, Why, and Where phases. For instance, the first phase is characterized by the question ‘How can we eat?’, the second by the question ‘Why do we eat?’ and the third by the question, ‘Where shall we have lunch?’ (Douglas Adams, “The Hitchhiker’s Guide to the Galaxy“)

No, I have not read the venerable tome, though it appears on my "list" periodically. Why do I like the quote? Obviously because of the very pleasing "lunch culture" that has evolved in our beloved Department of Statistics!

## A Classic that I Missed...

"A good idea has to be relearned every generation." ---- Henry Hazlitt, recently paraphrased in The Economist.

This is news you can use, especially if you are more of a writer than a researcher. Just take an astoundingly brilliant, far reaching vision of some twenty years back, and do it up in modern colors --- with due credit (even lavish praise!) for the original inventor. It's fun, profitable, and a genuine service to the planet. Put this on your to-do list right now!

## Pick Your Price or Have it Picked For You

"If I have 2,000 customers on a given route and 400 different prices, I'm obviously short 1,600 [prices]." --- Robert Crandall, former CEO of American Airlines and Wharton MBA. The lessons of targeted pricing were not lost on him.

## With Relative Ease

"To generalize is to be an idiot. To particularize alone is a distinction of merit." --- William Blake

## No Rules?

"There are three rules for writing the novel. Unfortunately, no one knows what they are". --- W. Somerset Maugham --- and quoted on T. Tao's blog page on writing.

There are multiple tongues in cheeks here. Maugham, Tao, and everyone else who writes carefully has "rules" by the dozens.

## Icahn on Tyranny

"A lot of people die fighting tyranny. The least I can do is vote against it.”– Carl Icahn at Texaco annual meeting. Jan. 20, 1988

## Andy Beal --- Business Hero

It's dangerous to have business heroes. Many fall from grace, and, if you have really looked up to someone, the fall can be heartbreaking. Still, I admit that Andy Beal is a hero of mine.

Beal Bank has its own very interesting model, and it has worked very well. For quotes from Andy Beal, you'll have to read the Forbes piece.

## Dissing the Efficient Market Myth

"My guess is that the myth of the rational market — a myth that is beautiful, comforting and, above all, lucrative — isn’t going away anytime soon." --- Paul Krugman in the NYTs 8/6/09

## Placing VAR

"In short, VaR, we think, is very useless but it’s not very irrelevant".

Huh?

This sounds like something that Yogi Berra would get credit for saying, but it's from an interesting piece at FT Alphaville.

## Time Reversal and Business Models

If newspapers did not already exist, and a guy proposed starting one, you'd say he was nuts. This looks to me like a pretty compelling argument that newspapers (the physical ones) are asymptotically toast.

## The Elasticity of Investor Caution

"Any onset of increased investor caution elevates risk premiums and, as a consequence, lowers asset values and promotes the liquidation of the debt that supported higher asset prices. This is the reason that history has not dealt kindly with the aftermath of protracted periods of low risk premiums." --- Alan Greenspan, August 2005.

## Great Fortunes

According to Balzac “Behind every great fortune lies a great crime.”

This does seem harsh, but there are enough examples to make one think --- or at least be careful with published praise. I got the quote from Bill Gross's June commentary.

## So Many Czars --- So Little Time

"It took the Romanovs almost 300 years to produce 18 czars. Obama did it in less than 100 days." --- Katherine Mangu-Ward (5/22/09)

## Size of the Financial Sector

"The financial industry grew to a point where it represented 25 percent of the stock market capitalization in the United States and an even higher percentage in some other countries." George Soros 12/8/08

In aggregate all bets net out, so the net revenue to the financial sector comes entirely from transaction costs (including spreads).

Isn't it goofy that capital directed to frictions could ever swell 25% of the total?

## Postpositive

A postpositive is a word, usually an adjective, that is placed after the word to which it relates, as in the newly invented Office of the President Elect.

## What's Misunderstood: GM or History?

"To say that a company that has successfully grown over a period of 65 years—a period marked by two world wars and a major economic depression—will suddenly be unable to adapt to the changing challenge ...flies in the face of common sense." --- Anthony De Lorenzo, "In Defense of the Automobile Industry," Letters to the Editor, The New York Times, December 19, 1973, recently quoted by Emma Rothschild.

Why does not this same logic apply to the former Soviet Union, the Ottoman Empire, or --- more humbly Barings Bank --- or Lehman Brothers?

What defies common sense is to suppose that every shock is survivable or that every enterprise or industry will sensibly adapt. The examples to the contrary would fill an encyclopedia. In fact, they do.

## Logical Enough

"Blasphemy is a Victimless Crime."

Allegedly from a T-shirt worn by Salman Rushdie

## Super Efficient Farms?

"We have one-hundredth as many farmers as we had at the turn of the 20th century. We now 500 times more grain." --- Dennis Gartman, 1/24/09.

I don't think so . It's more likely that we have only about one eighth as many farmers and probably less than 10 times as much grain. What are your estimates?

## Training for "Life"

"Anyone who has been to an English public school will feel comparatively at home in prison." --- Evelyn Waugh in Decline and Fall (1928)

## Jalapeño Conspiracy

Larry N. Holifield, former head of the Mexico City office of the U.S. Drug Enforcement Administration, speaking about a plane crash (12/08) that killed several high officials of the Mexican government:

"People won't believe it was an accident. They think everything down there is a conspiracy because half the time it really is."

## V.A.R --- "To the Wall"

"Value at risk (V.A.R.) as a reliable measure of risk will hopefully be taken out and shot at dawn. "--- GMO Quarterly Letter Q3 2008.

## Sentences

Don DeLillo's memorial characterization of Norman Mailer's chosen task as “figuring out the world, sentence by sentence.”

## Cool Birds!

Try corvids, the bird group which includes crows, rooks, and magpies. Following this up, I learned that blue jays are also of the corvidae group. Ex post this makes sense, but ex ante I would have been way off base.

## Darwin on Exposition

“I sometimes think that general and popular Treatises are almost as important for the progress of science as original work.”

## Mark Twain Introduces a Speaker

Mark Twain introduced the speaker as the “hero of five wars, author of six books and future prime minister of England.”

The year was 1900 and the speaker being introduced by Twain was Winston Churchill --- age 26.

Twain was not a bad prognosticator.

## Logical but Uncommon

"It is never worth a first class man's time to express a majority opinion. By definition, there are plenty of others to do that." --- G. H. Hardy

## Sounds More Like Berkeley?

The official motto of the University of Pennsylvania is

Leges sine moribus vanae,

which is usually translated as "Laws without morals are useless" --- though instead of "useless" you might prefer "vacuous" or "in vain" to echo the "v" of "vanae".

However you translate the motto, the sentiment seems more in tune with Berkeley than with Wharton.

Now here is a puzzle: Did the motto framers "forget" to give a proper attribution to Horace? Google can check that he much earlier said:

Quid leges, sine moribus vanae, proficiunt?

In English this is sometimes translated as "What good can laws be, unless based on the principles of morality?"

Addendum and Attribution : Oops, I wrote this before I discovered that this "attribution story" is already on the web in multiple forms, some in better shape than this. Still, once written, it stays --- but consider this my attribution attribution.

## Perennial Favorites

In the category of Best Abstract for a Paper in Economics: The prize goes to this baby.

Next, everyone's favorite, the mesmerized economists. They provide hours of innocent fun, well worth the minute they may take to download. Don't forget to explore the picture with your mouse. The economist are cutest when watching the index go South!

David MacKay's feature-by-feature comparison of his recent book Information Theory, Inference, and Learning Algorithms with J.K. Rolling's less recent Harry Potter and the Philosopher's Stone.

## "They said it, not me!" --- a few classics:

"I like pigs. Dogs look up to us. Cats look down on us. Pigs treat us as equals." --- Winston Churchill

"Nothing is destroyed until it is replaced." --- Auguste Comte (1798-1857)

"A little sincerity is a dangerous thing, and a great deal of it is absolutely fatal."--- Oscar Wilde

"Never offend people with style when you can offend them with substance." --- Sam Brown

## Missing something?

To keep this page as fresh as possible, it is often restructured --- say by morphing a group of quotes into a rant. but there is also an intermediate (purgatory?) stage:

QUOTES MOST RECENTLY MOVED

Credit Crunch Quotes: 2008, 2009, and Beyond

Among the many rants, I warmly recommend:

Let me know if you fail to find an item that you need, or if you find a link that is broken.