# Quotes: Mostly with Economic or Academic Twists

## Wee Dram

"In Scotland, the second most famous myth is summer."  --Anonymous.

## Compactness --- Mathematical or Not?

"The lunatic, the lover, and the poet / Are of imagination all compact."  --- Midsummer Night's Dream 5.1 (7-9).

## Six Bits of Buffett --- Feb 28, 2015

"In the world of business, bad news often surfaces serially: You see a cockroach in your kitchen; as the days go by, you meet his relatives."

"Charlie and I frequently get approached about acquisitions that don’t come close to meeting our tests: We’ve found that if you advertise an interest in buying collies, a lot of people will call hoping to sell you their cocker spaniels."

"When we differ, Charlie usually ends the conversation by saying: “Warren, think it over and you’ll agree with me because you’re smart and I’m right.

"As Yogi Berra said, “Every Napoleon meets his Watergate.”"

"In 1967 Ling bought Wilson & Co., a huge meatpacker that also had interests in golf equipment and pharmaceuticals. Soon after, he split the parent into three businesses, Wilson & Co. (meatpacking), Wilson Sporting Goods and Wilson Pharmaceuticals, each of which was to be partially spun off. These companies quickly became known on Wall Street as Meatball, Golf Ball and Goof Ball."

"As Tom Watson, Sr. of IBM said, “I’m no genius, but I’m smart in spots and I stay around those spots.”"

--- all from the annual letter

## Virtue of Logical Proof

"...the virtue of a logical proof is not that it compels belief, but that it suggest doubts; and the proof tells us where to concentrate our doubts." --- Morris Klein

## Democracy and Voters

"The best argument against democracy is a five-minute conversation with the average voter."--- Winston Churchill

## Technology, Technology, Technology...

“Without paint in tubes there would have been…nothing of what the journalists were later to call Impressionists. --- Pierre-Auguste Renoir

## Precision in Economics

Q: How do we know that economists have a sense of humor?

A: They use decimal points. [from a recent book review]

"About anyone so great as Shakespeare, it is probable that we can never be right; and if we can never be right, it is better that we should from time to time change our way of being wrong." -- T. S. Eliot

## Gold Bugs Squashed; Diamonds Really Squashed.

"One dollar invested in stocks in 1802 would have grown to \$8.8 million in 2003, in bonds to \$16,064, in Treasury Bills to \$4,575, and in gold to \$19.75." J. Siegel.

History may not repeat itself, but even a dull rhyme suggests that in the insanely long run gold is likely to stink. For diamonds to stink, you may not have too long to wait; the new synthetics cannot be distinguished from mined diamonds.

"In planning for battle, I have found that planning is essential but plans are useless." --- Dwight D. Eisenhower

## As Faulkner Famously Said:

"The past is not dead. It is not even past."

## Complete Lessons

“Having a dog teaches a boy fidelity, perseverance, and to turn around three times before lying down.” ---Robert Benchley

## Calibration

"You can always do what you want --- if you want it enough." --- La Rochefoucauld Maxim L 249.

## Asymmetry Again

"Bad beliefs are like fishhooks: easy to swallow, difficult to cough up." --Portland Press Herald (2014) on GMO.

## Gim'me Chalk

“Power corrupts and PowerPoint corrupts absolutely.”-– Vint Cerf

“PowerPoint makes us stupid.”-–Gen. James N. Mattis

## Fiducial Folly

“I would argue that much of the wealth being accumulated at hedge funds is more a function of the governance deficiencies of pension funds than anything going on at hedge funds.” ---- Ashby Monk, (Institutional Investor)

## Errant Quantifiers or A Really Low Bar?

This year more than ever, it is important that we all reach out to others in the community to ensure that every Californian doesn't go without a meal this Thanksgiving season. --- Business Wire

## Gary Becker (1930 -- 2014)

His single most famous result was the "rotten kid" theorem and knowing it would have saved King Lear much trouble. Take-away: Belay that bequests and sidestep deranged wanderings around the heath with naked Tom and loyal Kent.

## Deficits: Do They Matter?

"Shinzo Abe is the only world leader who understands that Dick Cheney was right when he said that deficits don’t matter." --- Byron Wien in his 2014 "Surprises".

## Grammar Jokes, So Few So Fine

A tipsy classics professor wanders back into the bar at his convention hotel:

“Bartender,  Give me a martinus.”
“Fine, Sir. You want perhaps, martini?”
“If I wanted two, I would have asked for two!”

## Bright Prospects

Recently in the FT: John Maynard Keynes famously looked forward to a day when “economists could manage to get themselves thought of as humble, competent people --- on a level with dentists”.

## Wage Slaves

"If you are paid £1,000 a day, but create £10,000 of new value in a day, you are more exploited than someone paid just £10 a day, who only produces £50 of new value per day." ---Boffy commenting at Stumbling and Mumbling and on Gary Becker's passing.

## A Habit of Theft

"A very significant fraction of the people in the world will steal if (a) it's very easy to do and (b) there's practically no chance of being caught. And once they start stealing, the consistency principle—which is a big part of human psychology—will combine with operant conditioning to make stealing habitual." --- Charlie Munger, speaking at Stanford, circa 1990.

## Leviathan Analogies

Ending too-big-to-fail was “like Moby-Dick for economists or regulators. It’s not just quixotic, it’s misguided.” --- Tim Geithner, quoted by Andrew Sorkin.

"Chinese [economic] data is too smooth [and it] makes him suspicious that some of the data is fake." ---comment in a report on speculations by Nate Silver.

## Obligations Run Through It

"At a high level of universality, to write anything well, whether it be intellectual or imaginative, is to assume at least two obligations: to be intelligible and to be interesting." Norman Mclean, from his essay on The Tragedie of King Lear.

How about a pithier line from the same essay: "Many a tragic drama has itself met a tragic ending for lack of drama..."

... and a line that suggests how to think about a work of writing: "The moment we imagine Shakespeare’s pen in our hand and Act III unwritten, we begin to sense the immensity of the problem that arises merely from the first general requirement of all good writing, intelligibility."

## Is this a problem for you?

"It is the nature of the human species to reject what is true but unpleasant --- and to embrace what is obviously false but comforting"- H.L. Mencken

## Just as I Hoped

"It's not good to be skinny when you're old," Claudia Kawas commenting on the results of the 90+ study and profiled on CBS

## Vaudeville from Capitalists' Woodstock (2014)

• Munger: "I always say the best way to get a good spouse is to deserve one."
• Buffett: "What's your second way?"

## Deja Vu

“What we learn from history is that we don’t learn from history.” – Benjamin Disraeli

I may have mentioned this before but ... oh, never mind.

## Coder Credo

The coder's credo goes: 1. Make it work. 2.Make it right. 3.Make it fast.

To modify for the mathematician, we only change the last line to "Make it beautiful to read."

## (Delta P) over P --- Not So Fast

"Why Americans are biased towards real estate: they can’t calculate returns."  (Pragmatic Capitalism)

This tag line is true and funny, but it doesn't get to the heart of the matter.

It takes a sharp pencil to isolate the investment component of home ownership or to correctly value the consumption component. Even the few people who get some of this right are prone to other errors --- like failure to consider total portfolio design.

There is also an under appreciated symmetry: Landlords do calculate returns and sometimes they like what they see, so in equilibrium neither buying or renting is likely to be strictly dominant from the investing point of view.

A further problem with the conversation is that "homeowership as an investment" is too often poorly benchmarked. If you take long-term TIPS as the benchmark then comparison favors homeowership in a meaningful but undramatic way, even when you account for taxes and insurance costs that often grow faster than inflation. Also, don't forget to account for the irksome cost of renovation of kitchens and bathrooms. The cost of obsolescence is experienced in lumps, but if properly amortized it is at least comparable to the costs of annual repairs.

At the end of the day, it is probably the illiquidity of homes most hiders the case for "home as investment." This is further exacerbated by absurdly high transaction costs of home transactions.

If your desired lifestyle requires you to buy a home, then by all means take the leap. One doesn't really need to worry too much about the investment component of homeowership if it is critical to living life the way you want to live it. Still, for the sake of intellectual honesty, one should not let naive analysis or wishful thinking trick you into thinking of your home investment as any kind of sure thing.

If you are lucky, it will be OK.

## Uruguay: Health Care with an Interesting Guarantee

"Health care if you are under 55 will cost you around 100 dollars a month with funeral expenses covered." ---wisdom from an expat in Uruguay.

## Succinctly Put

"Mathematics is not a faith-based activity." --- CNBC Blog Troll, but still notable.

## Spange?

It's a new word. It is a verb that means to ask for spare change. In panhandler dense San Francisco spanging pays \$40-\$100 per day, according to Pricenomics.

## T-Shirt Showing Big Explosion--- Caption:

Engineering: It's like mathematics, but louder.

## Residual Oil in the Solar Age

"Thirty years from now there will be a huge amount of oil --- and no buyers. Oil will be left in the ground. The Stone Age came to an end, not because we had a lack of stones, and the oil age will come to an end not because we have a lack of oil." Ahmed-Zaki Yamani, Saudi oil minister, speaking in 2000.

## From a Long List of Twisted Pairs at Common Sense

Doesn’t Matter: The latest pundit predictions.
Does Matter: Understanding financial market history.

I agree --- but agreeing is boring. Why do I believe this?

I have no concrete evidence that knowledge of financial market history has ever helped anybody. What would help is skill at "making sensible bets"; the question is then how one nurtures that skill.

History does seems like it should help, but so should resolute skepticism --- even about history.

## ArXive Epicenter

"... a sea-change in attitudes about the communication of scientific results in which free, immediate and open-access are the organizing principles, with traditional journals relegated, quite literally, to an afterthought. The epicenter for this transformation in our corner of the scientific universe is the arXiv, probably the single most important conduit for communication in the mathematical and physical sciences — but that is another story. --- Alan Adams in the notes to his TED talk.

## Rock and a Hard Place

"Again and again, I’ve undergone the humbling experience of first lamenting how badly something sucks, then only much later having the crucial insight that its not sucking wouldn’t have been a Nash equilibrium." --- Scott Aaronson, in an interesting essay that explains why science is hard, why native speakers of French speak too fast, and about forty other things you may have asked yourself --- like why a beer can cost six cents to make and cost six dollars to buy.

## Miles Davis Says to Sinbad

"Comedy is JAZZ." -- Quoted by Sinbad on Chopped 3/30/14

## Forces in Society

Bertrand Russell laid it out:

"The whole problem with the world is that fools and fanatics are always so certain of themselves, and wiser people so full of doubts."

There is some mathematical or evolutionary logic to this. Certainty has an element of power built into it, so groups that act with certainty can more easily collect social assets. Fanaticism and racism are not unpredictable; they are inevitable. What is miraculous is that some societies are so wealthy and so secure that tolerance and inclusiveness have at a chance to develop.

## Reg FD and Final Exams

If college courses were treated like public corporations, we'd have to discuss what we "expect to put on the final" with mandated language like that which decorates all quarterly reports:

"Forward-looking statements, within the meaning of Section 21E of the Securities Exchange Act of 1934, are made throughout this release. These forward-looking statements are sometimes identified by the use of terms and phrases such as "believe," "should," "would," "expect," "project," "estimate," "anticipate," "intend," "plan," "will," "can," "may," or similar expressions elsewhere in this release. All forward-looking statements are subject to a number of important factors, risks, uncertainties and assumptions that could cause actual results to differ materially from those described in any forward-looking statements. ... These forward-looking statements represent the Company's judgment as of the date of this press release. The Company disclaims, however, any intent or obligation to update these forward-looking statements. There can be no assurance that the proposed transactions will be completed as anticipated or at all."

How is anyone helped by this?

## Why Study Algorithms? ... Fun

".... pleasure has probably been the main goal all along. But I hesitate to admit it, because computer scientists want to maintain their image as hard-working individuals who deserve high salaries. Sooner or later society will realize that certain kinds of hard work are in fact admirable even though they are more fun than just about anything else." --- D. E. Knuth.

## An Idea Worth Testing

"One way to generalize an argument is to first try and find a more longwinded, less natural looking approach and try and generalize that." ---Ben Green

## Agency, Incentives, and the Tragedy of College Sports

"Beginning in the 1990s and continuing at least through 2011, UNC’s Department of African, African American, and Diaspora Studies offered more than 200 lecture courses that never met." --- Bloomberg

Universities have incentives to foster sports. Incentives mold behavior which may be --- or may not be --- responsible. That's economics.

If we can stand to open our eyes, we can see that in this instance "academics" have colluded to created a singularly embarrassing mess. One small part of the larger fraud--- who got paid to teach those classes that never met? Who administered the payment?

## @GSElevator Unmasked But Not Sent Packing

He had a large twitter following, got a lucrative book deal, then got unmasked. That's a business model, if sock puppetry is your calling. One tidbit from the horses's mouth:

“A lot of times I pander, I’ll be honest with you. I pander for retweets.”

Postscript: The deal got cancelled. One can publish hearsay and gossip, but one cannot publish blatantly fabricated hearsay and gossip.

## Mathematical Muggles

"A Muggle is a person who is born into a non-magical family and is incapable of performing magic. Most Muggles are not aware that magic exists at all and that those with it have organized their own society largely separate from the Muggle world" --- Harry Potter Wiki.

There have been times when I have thought of people who do not see the magic of mathematics as muggles. I don't intend the term to be pejorative, or even dismissive; such Muggles are just creatures of a different kind. One can even imagine trying to court them with a nice book like A Muggles Guide to the Cauchy Integral Formula, but it doesn't take long to see the flaw in that plan.

## Different Differences

"It’s not different this time, it’s different every time." --- Josh Brown (Chart that ...)

For the few people who don't know, you are supposed to laugh out loud when an financial commentator says "It's different this time."

I don't know how that custom ever got started.

Josh says it well, it is different every time. There was no 1929 in 1987 or in 2008. All of these worlds were profoundly different. There is no recurrence, no periodicity, at best we have Twain's rhymes.

Events are not beyond the possibility of our reason to imagine, but we are nitwits if we look for instant analogies. Reality has layers upon layers of relevant facts that are always moved by nuance, detail, and --- as often as not --- the visible hand of governments.

## Understanding "Need" and "Use"

"The engineer who does not know mathematics never needs it. But if he knows it, he uses it frequently".- --- Josip Plemelj

The phrase is not so pithy, but it has content and generality.

If you don't know anything about accounting, you will probably never need it, but if you do know something --- you are likely to benefit from the knowledge on a regular basis. The same can be said for wine making or wind surfing.

## Where Were You When 401(K) Was Born?

"At the time, the 869-word insert was lost in the political heat of limits on tax-deductible three-martini lunches, lower capital gains rates and a bipartisan coalition that was rejecting President Jimmy Carter’s proposals. Today, 401(k) is likely the most recognizable number in the Internal Revenue Code."

It began in 1978 and started slow. It's now the elephant in the room. Bloomberg does a nice job of the history.

## Foreign yet Familiar

"Zevenentachtig jaar geleden brachten onze vaders op dit continent een nieuwe natie voort, ontstaan in vrijheid en toegewijd aan het beginsel dat alle mensen als gelijken zijn geschapen." Abraham Lincoln, in WikiNed

A drop of poetry was lost when rendering "Four score and seven..." but still --- damn nice.

## Moving Frame

"When a close friend developed pancreatic cancer, I became the medical maven to a group of people who were sophisticated statisticians. I still dissuaded them from looking up the statistics, saying five-year survival curves are at least five years out of date." ---Paul Kalanithi writing in the NYTs.

## Finding the Roots

"An idea which can be used only once is a trick. If you can use it more than once it becomes a method." ---G. Polya and G. Szego, Problems and Theorems in Analysis, Springer, 1972, vol. 1, p. viii.

We've all said it; they said it first --- in print at least.

## Pullback Schmulback (1/28/2014)

“Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.” — Peter Lynch

After passed through the valley of the shadow of death in 2008, pullbacks are a picnic. A few weeks of disappointing earnings is not the same as a historic rupture in the financial fabric of the planet.

## Probate Hell

"One caveat: if you named ‘my estate’ as the beneficiary, that would require a probate of retirement assets, so don’t do that." ... wise advisor

Almost all financial accounts --- IRAs, 401(k)'s, 403(b)'s, checking accounts, and brokerage accounts --- allow one to chose a beneficiary or beneficiaries. The forms sometimes offer you the option to elect "my estate" as a beneficiary, but that is a horrible choice. Innocent assets that would have transferred costlessly are captured by agents of the state, and fees must be paid to secure the safe release of the hostages.

## In the Eyes of Others ...

A sixty-something should not read Brown University student blogs. Exposing gym etiquette they say:

"The Dawdlers: You’ve been on that treadmill for 45 minutes going 2.5 mph. FYI: you’ve already missed the Early Bird Special at the Boca Raton Diner. Get off."

Gosh, did I really miss the EBS? Well, at least that's 1.88 miles --- a personal best.

## Mapped Monsters ... Or Not

"The map legend ‘Here be monsters’, supposedly attached to a sea infested with imaginary sea creatures, is as much a myth as other never-uttered phrases such as ‘Beam me up, Scotty’, ‘Play it again, Sam’ and ‘Elementary, my dear Watson’ – and as those sea monsters themselves. At least that’s how I remember the latest information on the subject. I can’t find a source right now though, so maybe the joke might still be on me…from Strangemaps"

## Racism and Sexism --- What Can You Say?

Have you ever wished you could say something sensible about racism or sexism? If you are not a full-time expert (or even if you are a full-time expert) this is not an easy task, but perhaps one can cut the Gordian knot:

"Whatever you say about racism or sexism in year x, your statement is likely to make you sound foolish in year x+5."

I take this to be a good thing. In it I hear the delayed splash of a rock dropped into the deep well of progress. Now I just ask: Will this sound foolish in 2019?

## Wisdom ... or not?

Recently noted: Clifford Stroll has already addressed our country’s educational misgivings in a single sentence:“Data is not information, information is not knowledge, knowledge is not understanding, and understanding is not wisdom.

Sounds cool, but where is wisdom, except from understood knowledge, and where is knowledge without information and data?

The answer is easy; it comes from bullshit.

If you think you can access wisdom without data, information or knowledge, then you are either channeling a higher source, or you are deluded. For the rest of us, mastery of data and information is the only basis for knowledge --- and our only shot at wisdom.

## Buffett the Mathematician

"Bad terminology is the enemy of good thinking." WB in the 2011 Letter to Shareholders.

Buffett concern was about accounting terms in the insurance industry, but his observation offers sound coaching for anyone who wants to do honest work of any stripe.

## Whatever Works

As one Southern publisher famously confessed, “I owe my exalted position in life to two great American institutions –- nepotism and monopoly.” --- from Berkshire Hathaway Letter to Investors 1999, in the section where Buffett discuses the economics of newspapers.

"Consensus is what many people say in chorus but do not believe as individuals." -- Abba Eban

## Finish Line

"People have opinions --- horses have the facts." --- Famous trainer and track tout D. Wayne Lukas

## Advice to Language Learners: Words!

``The more one considers the matter, the more reasonable it seems to suppose that lexis is where we need to start from, the syntax needs to be put to the service of words and not the other way round.” (Widdowson in Lewis, 1993: 115)

I find this flabby, but on the money. If you've got the words, the sentences will come. Without the words, you're up the creek.

## First Glance

Wat doe je, als je dingen ziet die niemand ooit heeft gezien? --- attributed to van Leeuwenhoek (pronunciation and translation --- but it's more fun to guess).

## He's Not Alone

Essentially, Pope Benedict was a teaching Pope, a theologian and intellectual.

"His idea of hell would be to be sent on a one-week management training seminar." --- BBC

## Envy

According to Veblen (1899) "...each class envies and emulates the class next above it in the social scale, while it rarely compares itself with those below or with those who are considerably in advance."

This seems like such a dumb thing, it is hard to admit it as a modeling principle, yet, in aggregate it seems more right than wrong --- empirically if not ethically.

## Chekhov's Gun

Many times I have 'quoted' Chekhov, saying, "If you hang a shotgun on the mantle piece in the first act, you must use it in the third act."

In retrospect, I seem to be quoting a colorful embellishment of Chekhov that somehow crept into my mind. The venerable Wikipedia tells a more precise story ---yet perhaps not the full story.

## Sheep in Wolves' Clothing

"For me, the strongest evidence suggesting that markets are generally quite efficient is that professional investors do not beat the market" ---. Burton G. Malkiel

Since the "professional investors" are the market (and they have expenses) it is a boring tautology that in aggregate they do not beat the market. The IQ test here is why anyone would take this tautology as evidence for anything.

Ironically, Professor Malkiel is fully aware of this tautological interpretation, so I don't understand the quote at all. Perhaps someone got it wrong.

## Unparallel Tears?

Philipp von Spanien weinteals seine Flotte Untergegangen war

Weinte sonst niemand? --- Bertold Brecht

## Grit

“You can’t get much done in life if you only work on the days when you feel good.”--- Jerry West

"A human being should be able to change a diaper, plan an invasion, butcher a hog, conn a ship, design a building, write a sonnet, balance accounts, build a wall, set a bone, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, analyze a new problem, pitch manure, program a computer, cook a tasty meal, fight efficiently, die gallantly. Specialization is for insects". --- Robert Heinlein

## Daylight Savings --- another Ben Franklin Brainstorm.

"Benjamin Franklin suggested the idea back in 1784, as a way to economize on sunlight and burn fewer candles during winter mornings and nights, but the practice did not become steadily official in the United States until Congress passed the Uniform Time Act in 1966." (Web Wog)

Yup, and if you wait just two more years, then in 1968 Princeton admits its first women undergraduates. How can we stand this fevered pitch of progress? [insert sarcasm icon]

## Fair Fight

Never engage in a battle of wits with an unarmed person. --- Anonymous (not me)

## Inauspicious Beginning, Possibly Not...

On August 5, 1583, Sir Humphrey Gilbert claimed Newfoundland as England's first overseas colony under Royal Charter of Queen Elizabeth I of England, thus officially establishing a fore-runner to the much later British Empire.[3] (from the VW, i.e. --- the Venerable Wikipedia).

My first thought was that this was an inauspicious way to get started in the empire business, but Shane Jensen points out that Newfoundland was a pretty perky enterprise for a few centuries. It's just been the last century or so when the "growth prospects have tempered."

## So That's It?

Eddy Elfenbein:“A bubble is a bull market in which you don’t have a position.”  (Twitter) via Abnormalreturns.

Clay Shirky:"There is no information overload, there is only filter failure."  via Josh Brown

## Tick Tock

"How we spend our days is how we spend our lives." --- Annie Dillard, recently quoted at Brain Pickings.

## What's Roman for "Chill" ?

“Most of what we say and do is not essential. Eliminate it, you’ll have more time and more tranquility. Ask yourself, is this necessary?” --- Marcus Aurelius,

## Ground Hog Day Politics

"Eight words contain the sum of the present degradation of our political parties: No leaders, no principles; no principles, no parties." --- Woodrow Wilson writing in 1910

## Slogan to Sell Quality Goods

"They will fight over it when you are dead." ---- Motto of the Saddleback Leather Company

Father said: “Anything but journalism.” I rebelled. ---Malcolm Gladwell

## Mnemonics for Every Living Thing

King Phillip Can Only Find his Green Slippers a mnemonic for Kingdom, Phylum, Class, Order, Family, Genera, Species.

"It's simply the best acted, best written thing that has ever been on television" --- Warren Buffet (Squawk Box, 10/3/2013). See also, Daily Mail.

## Two Damon Runyon Classics

"The race is not always to the swift nor the battle to the strong, but that's the way to bet.” ― Damon RunyonOn Broadway

“I long ago came to the conclusion that all life is 6 to 5 against.”  ― Damon RunyonGuys and Dolls: The Stories of Damon Runyon

## Inventor's Needs, Inventor's Projects

“The hottest tech startups are solving all the problems of being 20 years old with cash on hand, because that’s who thinks them up.” --- George Packer in the New Yorker 2013.

## Can't Do Lao Tzu 24/7 but ...

“Be content with what you have, rejoice in the way things are.  When you realize there is nothing lacking, the whole world belongs to you.” - Lao Tzu

## Quinoa Counter-revolution

"It's the unspeakable truth about the quinoa. Basically, you're eating a beet in grain form." WSJ article 2012

## All that Glitters

"Paper money, with its capacity to be inflated, devalued and counterfeited, actually carries an advantage in that people know it is fallible." --- Ken Silber

## Wanna Bet?

From the NYTs:

Jonathan A. Mitchell, a postdoctoral fellow at the University of Pennsylvania: “But based on our observational study, we predict that increasing the duration of sleep to 10 hours from eight would lead to a 4 percent reduction in obesity among U.S. children.”

Poor, lad. Why didn't he just tell the truth?

"We got self-reported data from questionnaires, and we didn't pay too much attention to the nature of the sample or the likely errors in the data. We did a univariate regression and we got a beta. We used our beta to make a "prediction," but we don't know much about the logic of regression or prediction. Some guy asked us if we were making a causal inference, but we did not know what he was talking about."

## Bummer

A friend walking with Samuel Beckett in Paris on a perfect spring morning, said to him, “Doesn’t a day like this make you glad to be alive?” to which Beckett answered, “I wouldn’t go as far as that.” --- from a piece in the NYTS by O. Sacks.

Would you go on a second walk with a guy like that? I suppose so; there must be brighter moments.

## Nulla dies sine linea

Nifty Latin for "No day without a line." Good advice for graduate students (and other hesitating writers).

## Making Breakfast and Writing Papers

"The first pancake is always a lump."

A Russian proverb and a useful nudge for young people (or old people) who are writing the first draft of a research paper. Accept that the first draft will be a "lump." That's OK, you can fix it.

Anyway, according to Justice Brandeis, "There is no great writing, only great rewriting."

True and good, but Joyce Carol Oats completes the circle, "The first line can be written only when the last line has been written."

## "Unexpected" Limelight

“It usually takes more than three weeks to prepare a good impromptu speech.” --- Mark Twain

“The very best impromptu speeches are the ones written well in advance.” --- Actress Ruth Gordon

## Multiple Tests, Multiple Opportunities for False Positives

A sequence of 14 mammograms taken over 14 years has a 60% chance of returning one or more false positives (Pubmed citation).

I'm not completely sure these researchers "got their sums right", but, if they did, the benefits of the annual mammogram come at the cost of considerable misdiagnostic anguish.

## J. Joyce at Play

"They were jung and easily freudened" --- speaking of the young and easily frightened while incidentally giving Jung and Freud a poke in the ribs. (Snagged from the venerable wikipedia: play on words)

I've got a view more of these that are too saucy for a web page.

## Switcheroo (a Quote Genre)

"Hamming got it wrong: the purpose of insight is computing." --- Doron Zeilberger in a (lovely!) essay on umbral methods.

## High Plains Culture

"I am teaching a class at [Texas] Tech this fall, and one of our topics is drive-in movie theaters". --- Allison Whiney, posted on a FB group page.

## Heal Thyself

"Believe it or not, that funky looking blue mold on that deli salami you bought is none other than penicillin!"  --- from a Survival Monkey article on post-apocalypse medicine. You'd better bring the salami.

## MOOCs are Coming

"The education we're currently providing, or the way we're providing it, just isn't sustainable." --- Bill Gates speaking to the Association of Public and Land-Grant Universities in 2012.

"This article contains weasel words: vague phrasing that often accompanies biased or unverifiable information" --- a warning that is placed on many Wikipedia pages but which is resolutely absent from the pages of the New York Times.

I love both Wikipedia and the New York Times. I pick on the NYTs only because I've grow tired of cheap shots at Fox News.

## Playwright's Perspective

“It's better to be quotable than to be honest. ” — Tom Stoppard, quoted at Forbes.com.

Stoppard is a literary genius who fights for honesty in every line he writes. What could be more honest than to admit that he knows his price for taking a dive.

In response to a reader troubled by serious health problems, the MD blogger could not find words to hedge the dark prognosis.

He closed by writing:  "I do wish you and your family well."

What I read was,  "I do wish you fairly well."

This puts me in mind of another potential genre of quotes: Those that are more poignant when misread.

## Questionable Factuals

"That's the problem with false proofs of true theorems; it's not easy to produce a counterexample." --- Jeffrey Shallit, commenting on the difficulty of dealing with false proofs of valid conjectures.

Another damned irritation of false (or incomplete) proofs is that one gets so little credit for making the necessary repairs. Typically this is hard work; the gap is there for a reason.

Finally, if you must take up the repair task, you may even stumble into an academic spat. My advice is that if you are hell-bent on correcting a bogus argument, check first that the slip is due to someone either very kind or long dead.

## Nobel Aim

“The purpose of this work is to make the idea of Cantor’s ordinal numbers unambiguous and concrete.” --- John von Neumann, in the first line of his first single-authored paper, quoted recently by Freeman Dyson.

I love this sentiment. What could be more nobel than to transform a muddle into something "unambiguous and concrete"? Now days one more often sees the reverse.

## Back to Basics

"Social Media is Not a Career – These job titles won’t exist in 5 years. Social media is simply a function of marketing; it helps support branding, ROI or both." --- Jason Nazar, under 30 rich-guy entrepreneur from his essay: 20 Things 20YOs Don't Get.

## Who would have guessed?

"In most human economies, money is used first and foremost to arrange marriages."

## Gödel on Islam

"I like Islam: it is a consistent idea of religion and open minded." --- quoted with source in the venerable Wikipedia.

## Who Copies This Cat?

"Be scrupulously truthful, even if the truth is inconvenient, for it is more inconvenient when you try to conceal it."

One of Bertand Russell's Ten Rules for Teachers and years later a tag line for Al Gore, AKA inventor of the internet and demi-billionaire board member of Apple, Inc.

## Saga (or Sad Song) of Emerging Markets

“The EM story is based on rapid growth, led by exports, which delivers large current account surpluses, which leads to the accumulation of foreign exchange reserves and the expansion of domestic credit ...Every single element of that story is no longer true.” --- David Lubin, head of emerging market economics at Citigroup (August, 2013).

[2/4/2014: EM has been crushed ytd. Lubin has my attention.]

## Alcoholics Unanimous

Malapropism widely attributed to Chicago's tippling Mayor Daley.

## Gordon's Meta Theorem

"What works for 5 also works for 8" --- a principle used by Basil Gordon in the exploration of identities of the Rogers-Ramanujan type. (AMS Notices 60)

## Greenhouse Viruses

Ocean viruses may turn over as much as 150 gigatons of carbon per year—more than 30 times the standing abundance of carbon in marine plankton. --- Science 7/1/13

## No Direction Home

"I wouldn't even think about playing music if I was born in these times. I'd probably turn to something like mathematics. That would interest me." --- Bob Dylan (interview 2005?) See also Peter Cameron's Blog on Dylan at 70)

## Snowden In Transit

"I'd rather not deal with such questions, because anyway it's like shearing a pig –- lots of screams but little wool." --- V. Putin on the futility of commenting on Snowden's stop over in Moscow (6/30/13) .

Putin must have been reading the speeches of Lincoln; the rail splitter himself could not have been more folksy.

## Tarnished Sparkle

"Gold: A terrible investment, or the worst investment of all time?" Question from The Big Picture.

Always the "barbarous relic" to me (and some others). The claim that gold offers "insurance" comes from the same hucksters who say "Invest in Land; they're not making any more of it."

Still, at the end of the day, everything is psychology, so if it rocks your boat, go for it.

Money that is absorbed by foolishness helps to bring down the effective money supply and hence moderates inflation (if the monetarists are right). With luck, even gold-bug foolishness can support a public good.

## Worth Publishing Once?

"I was once asked, at a journalism conference, how I defined my job. I said: My job is to write the exact same thing between 50 and 100 times a year in such a way that neither my editors nor my readers will ever think I am repeating myself."

Jason Zweig, Columnist for the WJS and advocate of the theory that if you have a good story, stick with it.

## Go Figure

"I arrived in Blacksburg in the seventh hour of the seventh day of the seventh month of the year seven in the seventh decade, and I was put in Apartment 7 of Block 7...all by chance." I. J. Good commenting on his setting up shop in the US.

## Planning the Paper

Structure what you are going to write ahead of time. Remember Ernest Hemingway’s dictum: there is no great writers but there are great re-writers. Your first draft is only half way to the finished book. --- Jeffery Dever, Tips on Writing

## 5/8/13

Fibonacci Day! It comes only once a century, and I missed it.

"Don't just read it; fight it ! Ask your own questions, look for your own examples, discover your own proofs. Is the hypothesis necessary? Is the converse true? What happens in the classical special case? What about the degenerate cases? Where does the proof use the hypothesis?" --- Paul Halmos, from his book, I Want to Be a Mathematician

## Metaphor Mixmaster

"Why does it matter if you jump from the frying pan into the fire? In either case, you are toast." --- Anonymous (ok, it is me this time)

"I've gone where the hand of man has never set foot." ---Samuel Goldwyn

## Grill 'em High

I can’t imagine too many visitors to Jimmy Dean’s factory leave the tour and [fail to] buy a few links in the souvenir shop, anxious to cook them up when they get back to the trailers. --- Steven Weiss, CNBC commentator, with an apt but harsh view of America's Heartland --- loosely "linked" to Fed sausage making.

## Bad Books Need Love Too

The most worthless book of a bygone day is a record worthy of preservation. Like a telescopic star, its obscurity may render it unavailable for most purposes; but it serves, in hands which know how to use it, to determine the places of more important bodies.

As Hyman Minsky once stated, anyone can create money, the trouble is in getting others to accept it.  --- Cullen Roche in an essay on Moneyness.

All the more amusing now that there are billions of dollars in bitcoins.

## Brenzer's Rule

"If everyone you talk to says you shouldn't do something, you probably shouldn't do it, and if everyone says you should do something, you should also probably not do it; but if half the people you talk to tell you to do it and half say you're crazy, then you should definitely go ahead." --- quoted in an Atlantic article by Ed Tenner, a Princeton friend of almost thirty years.

I have done my part here.

When Karmakar was a new hire at Bell Labs talking about doing LP by numerical methods that dug into the interior of the polytope, I said to him that this approach was crazy --- "Why give up the beautiful geometry of the simplex?"

When Peter Shor was at Bell Labs and got interested in quantum computing, I said to him that this was crazy --- "Why waste time on a computational model for which there are no computers? "

In two notable cases (and probably more) I provided the "crazy" ballast that Tenner and Brenzer see as necessary for a project go-ahead. Karmakar and Shor wisely followed Brenzer's rule. The rest --- as they say --- is history.

## Biblio Science

"Econlit and the Social Science Citation Index can be extremely helpful in identifying related work and should be consulted carefully. If you are not familiar with both of these, you should stop reading this very instant and return once you have figured out how they are used!" -- Don Davis, from his thoughtful essay on choosing a thesis topic.

Personally, I am almost a MathSciNet grandmaster. I love it, but I know that for finding relevant real word problems, MathSciNet is not the go-to-place. People in statistics and applied mathematics need to become more catholic in their choice of search tools.

## A Dark View of Manners --- In France and Russia

To succeed in the world it is not enough to be stupid, you must also be well-mannered --- Voltaire

Слаб человек, и все ему можно простить, кроме хамства - Александр Блок (which Google translates --- with tweaks -- as: "A crude man --- but all can be forgiven --- except for rudeness --- Alexander Blok)

Favored quote of Andrei Zelevinsky who passed away on April 10, 2013, shortly after turning sixty.

## Mr. Black Swan Himself

"Once again, lecturing birds how to fly does not allow one to take subsequent credit." --- Nassim Taleb in his essay on Black-Scholes and Real Traders.

I'm reminded of the Feynman quote:"The philosophy of science is as useful to scientists as ornithology is to birds."

## Do Rules ever Rule?

"If there's anything I detest, it's a mechanistic formula for anything. People should use their heads and go by logic and reason, not hard and fast rules." --- Gerald Loeb, famous investor of the '30s, quoted by Josh Brown

Let me be the Devil's advocate. I often use what I call a "play by rule." For example, you can bet on people to repeat their behaviors, good or bad --- minor or major. Also, you may want to make some "one time decisions;" so, even though I think the custom of tipping is absurd, I have decided to follow the customs of whatever country where I happen to find myself.

Rules are certainly approximations to wisdom, but mathematicians appreciate that approximations have benefits. I'm sure Gerald Loeb or Josh Brown would stand by the rule: "Don't pay 1% to a money manager who is almost certainly a closet indexer --- or worse."

## Hello, Good Looking

“Remember that physical beauty is evolution’s way of assuring us that the other person doesn’t have too many intestinal parasites.” --- Big Ben, speaking to the Princeton Class of 2013 (full text)

## Sam Clemens' on a Hobsonian Choice

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

## 43: Never Poetic --- Sometimes Right

... [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 BershireFest 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 (UTube version, with a bonus)

An amazing number of people model their behavior on 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 (1971) is closer to the Crash of '29 than it is to the present.

## Bottom Line

“You never know what someone is worth until they declare bankruptcy” --- "Anonymous" quoted by the almost always 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 the great 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. [Insert sarcasm icon]

## 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 crutch with the sun's help.

## 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.