Here are some links to articles that didn’t make our front page. Several of the articles are very insightful I highly recommend reading them. As always, the articles are from different fields but should make you a more well rounded investor. Take Care.
(Click on the titles to access the articles)
1. Book Review: Affluence & Ethics – Via WSJ – Suppose you see a small child drowning in a pond. If you save him you will ruin your expensive suit. Do you save him? Of course you do. Now think about the world’s extremely poor children who are going to die unless you give enough to a charity designed to help them, such as Unicef or Oxfam. Do you save them? Not often enough. In “The Life You Can Save,” Peter Singer argues that the two situations are ethically equivalent. Such immediacy is compassionate and inspirational — you want to give more after reading Mr. Singer.
2. Basics Of Mathematics: Significant Figures (Via Good Math) – The idea of significant figures is that when you’re doing experimental work, you’re taking measurements – and measurements always have a limited precision. The fact that your measurements – the inputs to any calculation or analysis that you do – have limited precision, means that the results of your calculations likewise have limited precision. Significant figures (or significant digits, or just “sigfigs” for short) are a method of tracking measurement precision, in a way that allows you to propagate your precision limits throughout your calculation.
3. Sketchcast Awesome New Communication Tool - Via Infosthetics – Sketchcast is based on an old principle: the improvised drawing on the back of a napkin in a bar, to sketch ideas and thoughts on paper to get a concept across another person. The website presents a new way to communicate “something” online by recording a sketch, with the option to overlay the animation with a voice or speech. Any sketch can be embedded on a blog or home page for later playback
4. Group Thinks: Collective Delusions In Organizations & Markets – Via NBER – I develop a model of (individually rational) collective reality denial in groups, organizations and markets. Whether participants’ tendencies toward wishful thinking reinforce or dampen each other is shown to hinge on a simple and novel mechanism. When an agent can expect to benefit from other’s delusions, this makes him more of a realist; when he is more likely to suffer losses from them this pushes him toward denial, which becomes contagious. This general “Mutually Assured Delusion” principle can give rise to multiple social cognitions of reality, irrespective of any strategic payoff interactions or private signals. It also implies that in hierachical organizations realism or denial will trickle down, causing subordinates to take their mindsets and beliefs from the leaders. Contagious “exuberance” can also seize asset markets, leading to evidence-resistant investment frenzies and subsequent deep crashes. In addition to collective illusions of control, the model accounts for the mirror case of fatalism and collective resignation. The welfare analysis differentiates valuable group morale from harmful groupthink and identifies a fundamental tension in organizations’ attitudes toward free speech and dissent.
5. The New Burden Of Knowledge – Via Organizations & Markets – the idea that as an economy’s knowledge base increases, the amount of education necessary to be an effective innovator increases as well, mitigating the effects of knowledge accumulation on growth.
6. Let’s Get Real About Renewable Energy – Via WSJ – Let’s start by deciphering exactly what Mr. Obama includes in his definition of “renewable” energy. If he’s including hydropower, which now provides about 2.4% of America’s total primary energy needs, then the president clearly has no concept of what he is promising. Hydro now provides more than 16 times as much energy as wind and solar power combined. Yet more dams are being dismantled than built. Since 1999, more than 200 dams in the U.S. have been removed.
7. Inductive Reasoning & Bounded Rationality - Via SantaFe.Edu – The type of rationality we assume in economics–perfect, logical, deductive rationality–is extremely useful in generating solutions to theoretical problems. But it demands much of human behavior–much more in fact than it can usually deliver. If we were to imagine the vast collection of decision problems economic agents might conceivably deal with as a sea or an ocean, with the easier problems on top and more complicated ones at increasing depth, then deductive rationality would describe human behavior accurately only within a few feet of the surface. For example, the game Tic-Tac-Toe is simple, and we can readily find a perfectly rational, minimax solution to it. But we do not find rational “solutions” at the depth of Checkers; and certainly not at the still modest depths of Chess and Go.
8. How About Free? The Price Point That Is Turning Industries on Their Heads - Via Wharton – There’s an old joke about a businessman who gives away his products. A customer asks: “How do you make money doing that?” He answers: “I make it up on volume.” It’s nonsensical, yes. But a funny thing has happened: Giving away the product has become a legitimate business model on the Internet and even beyond. And it’s been getting increased attention. Author Chris Anderson will publish a new book in July titled, Free: The Past and Future of a Radical Price. It’s a follow-up to his Wired magazine cover story last year, “Free! Why $0.00 is the Future of Business.” Anderson, the editor of Wired and a former Economist reporter, also wrote the 2006 book, The Long Tail, in which he observed how companies such as Amazon.com and Netflix were thriving by offering gigantic catalogs of products that each sell in small quantities. Today, those companies are among the few thriving through a recession.
9. Take a course from the king of customer development - Via Venture Hacks – If you want to learn customer development, you can take Steve Blank’s course at Stanford, Berkeley, or Columbia. Or you can take his course right here on Venture Hacks. I’m taking the course right now and I’ve posted the audio and slides from the first two lectures below.
10. Free Brain Book - Via The Society for Neuroscience – Society offers a selection of free content on its website, and among the offerings, Brain Facts: A Primer on the Brain and Nervous System is mighty useful. It’s a 74-page introduction to a variety of brain topics, designed for teachers for use in classrooms and for lay people who want to get a handle on their noggins. You can download it for free right here.
11. The Eye Contact Effect: Mechanisms & Development – Via Scribd – The ‘eye contact effect’ is the phenomenon that perceived eye contact with another human face modulates certain aspects of the concurrent and/or immediately following cognitive processing. In addition, functional imaging studies in adults have revealed that eye contact can modulate activity in structures in the social brain network, and developmental studies show evidence for preferential orienting towards, and processing of, faces with direct gaze from early in life. We review different theories of the eye contact effect and advance a ‘fast-track modulator’ model. Specifically, we hypothesize that perceived eye contact is initially detected by a subcortical route, which then modulates the activation of the social brain as it processes the accompanying detailed sensory information.
12. Natures Patterns – Via Economist – WHY do honeycombs have hexagonal cells? Why are the florets in a sunflower arranged in a double spiral? In medieval times, these questions would have been met with a simple answer. God established the heavens, setting “a compass on the face of the deep”, leaving evidence of His presence in all creation. Most scientists today would rather invoke Charles Darwin to explain these patterns as products of evolution. They emerged from myriad possible shapes through natural selection. In other words, they are particularly suited to the task at hand.
13. Housing Prices Heat Map - Via NYT – A reader sends in the following very cool map, which shows home prices in each state each quarter, relative to that state’s long-term trend. Red represents housing prices above the long-term trend, and blue represents prices below it. Note how many states were still red by the end of 2008. This may indicate that home prices have further to drop.
14. The Economic Value Of Popularity – Via NYT – It probably seems obvious to most people that being likeable and having good friends could be valuable in life. Since most economists are neither likeable nor have good friends, it is an idea that hasn’t been studied by economists until now.
15. Charles Leadbeater On The Internet: You Are What You Share (Read This PDF) – Via Cl – If you are not perplexed you should be. As the web becomes ever more ubiquitous, it infiltrates our lives and shapes what we think is possible, we are increasingly unnerved about what we might have unleashed. Will the web promote democratic collaboration and creativity? Or will it be a malign influence, rendering us collectively stupid by our reliance on what Google and Wikipedia tells us it true, or worse promoting bigotry, thoughtlessness, criminality and terror? How will it change the way we think and behave and what will its growing domination of the world of information and ideas do to us? Clearly there is enormous potential.
16. The Promise and Challenges for Mobile Media in the Developing World - Via PBS/Media Shift – Mobile phones are everywhere. They have long surpassed the Internet in number of users, and in some parts of the world, mobile phones now rival television in reach. The mobile tech economy (at least until recently) was booming with telcoms and handset manufacturers fiercely competing in emerging markets, and software giants like Microsoft and Google entering the mobile industry in earnest. There are now somewhere between 3.5 billion and 4 billion mobile subscriptions worldwide, with the fastest growth happening in developing countries. A new report by Internews, The Promise of Ubiquity, poses this question: Can media organizations in the developing world seize the opportunities that billions of mobile subscribers represent, and will they be able to deliver information services needed all over the world? The report’s producer, John West, has some interesting ideas, but does not have all the answers.
17. The Revival Of Branch Banking – Via Socializing Finance – It looked like branch banking had finally found itself again. Even in the spring of 2007, newspapers were reporting that banks are on a “building binge.” This expansion was taking place in both urban and suburban areas, but downtown Manhattan was the most extravagant; the New York Times counted as many as four new bank branches on a single city block. Later in that year, the subprime crisis hit the news and the moment of retail finance seemed to be over. Or was it? Was the efflorescence of branches part of the expanding bubble, or were banks onto something about the use of face-to-face methods and physical spaces?
18. Bs Bankruptcy Numbers - Via Credit Slips – We’ve already seen a lot of bs numbers in the cramdown debate. The Mortgage Bankers Association keeps pushing its ridiculous figures. And now Todd Zywicki has joined the fray with an op-ed in the Wall Street Journal a couple of weeks ago. Professor Zywicki that claimed that “A recent staff report by the Federal Reserve Bank of New York estimated a 265 basis-point reduction on average in auto loan terms as a result of the reform.” One little problem. That’s not what the Fed staff report found. Professor Zywicki was off by 250 basis points (a doozy of a mistake!), as well inserting a causal link not supported (and arguably contradicted) by the Fed staff’s study. The study states that “The decline in the average auto loan spread was 15 basis points lower after BAR for unlimited exemption states, a 5.7 percent decline relative to the mean over all states (265 basis points).” In other words, the average rate spread is 265 bp. The decline in rates, to which Zywicki was referring was only 15bp, and that was only in states with an unlimited homestead exemption. That it was not 265 bp was abundantly clear from the regression tables.
19. Does Respecting The Individual Promote Prosperity – Via AidWatch – I am covering in my Ph.D. development class today a fascinating new body of research by economists that studies the effects of cultural values on economic development (see some references at the bottom). To drastically oversimplify, values across different cultures lie along a spectrum between two separate poles: (1) valuing individual autonomy, believing in equal treatment of individuals, reliance on formal law, the same moral standards apply to all, enforcement of morality is between individuals vs. (2) seeing the individual mainly or only as part of the group, different standards of treatment for group insiders and outsiders, morality only applies to interactions within the group, group enforcement of moral standards, reliance on informal rather than formal institutions.
20. Chris Anderson: What Science Can Learn From Google – Via Intersiciplines – “All models are wrong, but some are useful.”So proclaimed statistician George Box 30 years ago, and he was right. But what choice did we have? Only models, from cosmological equations to theories of human behavior, seemed to be able to consistently, if imperfectly, explain the world around us. Until now. Today companies like Google, which have grown up in an era of massively abundant data, don’t have to settle for wrong models. Indeed, they don’t have to settle for models at all. Sixty years ago, digital computers made information readable. Twenty years ago, the Internet made it reachable. Ten years ago, the first search engine crawlers made it a single database. Now Google and like-minded companies are sifting through the most measured age in history, treating this massive corpus as a laboratory of the human condition
21. Power & The Illusion Of Control - Via Science Daily – Power holders often seem misguided in their actions. Leaders and commanders of warring nations regularly underestimate the costs in time, money, and human lives required for bringing home a victory.
22. Podcast: This American Life: Bad Bank - Via Public Radio – Alex Blumberg and NPR’s Adam Davidson team up once again to talk economy: specifically, the US’s current plan to deal with banks, why the plan looks suspicious and what it all amounts to.
23. How To Choose Between Expriential & Material Purchases – Via Psychology Blog – If you decided to spend $100 on your happiness, would you buy something experiential like a meal out or something material like an item of clothing? Research covered here recently suggested that for long-term happiness experiences tend to beat possessions. But Leonardo Nicolao and colleagues at the University of Texas argue in the Journal of Consumer Research that this research doesn’t tell us the whole picture
24. Video: What Exactly Is Cloud Computing – Via NonSense
25. Memory Improved 20% By Nature Walk - Via Psychology Blog – New study finds that short-term memory is improved 20% by walking in nature, or even just by looking at an image of a natural scene.
26. US Trade Surplus & Deficit - Via Visual Complexity – With data from census.gov, this interactive visualization depicts US Trade Surplus and Deficit, with 20 different countries, for each month over the past 10 years. The countries in the blue-green along the top represent surplus cash flows to the United States, while the countries in the purple-red along the bottom represent deficit cash flows from the United States. Users can analyze each year individually or animate the graph over the 10-year timeline.
27. Text Book Recommendations From Mankiw – Via MTEF – Good Stuff!
28. Latest Topics From The Journal Of Behavioral Finance – Via Information World