Posts

Coin Flip Strategy

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 If a coin landed on heads 60% of the time and you are offered 1:1 odds would you play?  Short answer, yes obviously we should play. The expected value is 20% per flip.  EV = 0.6*x - 0.4*x = 0.2 But how much should you bet? This depends on your individual risk appetite. There is a whole area of economics dedicated to studying this known as utility theory . Economists use utility functions to quantify human preferences of different choices. Each individual aims to maximize their utility function. This can be applied to investment decisions with respect to the risk reward trade-off. For a given level of utility there is an indifference curve that represents the tradeoff between additional risk and additional expected return. An investor can be expected to get the same satisfaction from each point on this curve.  This is all a fancy way of saying that traditional risk measurements do not account for the subjective aspect of risk. Everyone has a different attitude toward...

Joker: A folie deux

Visually appealing. Clever message. Lacking fan-service. Minimal plot. Joker: A Folie Deux is a bit of a paradox in that its overwhelmingly negative reviews are understandable and mostly accurate, yet at the same time miss what makes the film good. The negative criticism simply proves the point that Todd Phillips is making about fanaticism. The strength of the film lies in its analogy and metaphor, while its lack of plot and overuse of music is the weakest. The central premise of the movie is a criticism of society's relentless ability to turn tragedy into entertainment. This is highlighted by Arthur's trial being televised, drawing comparisons to the OJ Simpson murder case. Perhaps the most powerful image is when we finally see Joker in full regalia in the courtroom after Arthur opts to fire his lawyer and defend himself, a decision that draws huge applause from his "fans" despite being an objectively awful decision for his future. Joker's antics in the courtroom...

Benner Cycle

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The benefit of social media is that it gives everyone a voice. The downside of social media is that it gives everyone a voice. An example of the latter are pseudo finance "influencers" on LinkedIn. You know, those Entrepreneurs|Founders|Futurists|Evangelists that will post an arbitrary graph along with a GPT scripted paragraph of "investment advice" in an attempt to harvest the content machine for engagement. A staple of these trending travesties is a thing called the Benner Cycle .  The Benner Cycle is a chart of predicted market cycles that was published by an Ohioan farmer Samuel Benner in his book "Benner's Prophecies of Ups and Downs in Prices", which was published in 1884. This chart is intended to predict market movements from 1924 through to 2059 and is described in the book by Benner as a "sure thing". As you can see in the chart there are two overlapping cycles, a major and a minor cycle. The peaks and troughs are assigned as points...

My Introduction to Modern Art

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 In September 2022 I was in New York for work and one weekend I paid a visit to the Museum of Modern Art (MoMA). I am not an art fan, in fact I think the only previous time I was in a gallery was a school tour in Dublin when I was 10. However, museums are a great place to kill a few hours alone in a city so off I went to MoMA armed only with the knowledge that Jackson Pollock seemed to regularly be an answer in the art round of University Challenge. The exhibition started on the fifth floor with work from the mid 1800's and descended in chronological order until you reach contemporary art (works done by living artists) on the first floor. Initially I liked some of what I saw and was indifferent about a lot. One part that stood out to me was how Picasso's abstract cubism style influenced more modern works that focused on shapes and symmetry without depicting an image.  I do not know if my interpretation is correct, but as I descended through the galleries I got the impression t...

Federer vs Nadal vs Djokovic

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Over the past few years I have repeatedly had the "Who is the tennis GOAT?" debate with a friend of mine, Joe. A lifelong tennis fan, Joe preferes Federer while I, a relatively new convert to the sport, have been most impressed by Djokovic. With little tennis experience at my disposal I don't have a lot of evidence to support either player. However, thanks to Jeff Sackmann, who maintains a publicly available tennis database , what I do have is the result of every ATP Tour match since 1968. So here goes my attempt to leave bias at the door and answer this question once and for all with my good friend (better than Joe), statistics.  Stuff we already know Engaging in this debate generally starts with a list of the grand slams each player has won. This isn't enough to make a comparison on relative abilities though because these impressive tallies were racked up across different time periods, against different crops of players and on different surfaces. Nadal's dominan...

A Narrow Escape

I really shouldn’t have had all those vodka and cokes. I usually know my limits but last night it seemed as though there was a voice in my head insisting I continue drinking. Then I noticed the shape next to me and groaned inwardly, maybe it wasn’t my imagination. My head screamed in protest as I carefully turned to see who had accompanied me home last night. That’s when I was blinded by a golden laser that burned straight through my retinas and set my brain on fire. Instinctively I burrowed my chin into my chest and sought shelter beneath the quilt. It was then that I decided a scouting mission was called for. No more rash decisions were to be made until I had some understanding of my surroundings. Raising a protective arm to block the morning sunlight piercing through the gap in the curtains I slowly emerged into reality once again. I blinked a few times as my eyes gradually adjusted to the murky half-light in the room. I took several deep breaths in an attempt to calm my raging he...