I went over my managerial accounting homework yesterday and discovered something interesting. The problem was a standard expected value problem in which given 3 choices with multiple possibilities, we were to decide which choice was optimal.
After calculations there were 3 options: choice A had an EV (expected value) of 20k, choice B’s EV was -4k and choice C’s EV was 14k.
What shocked me was that although the answer A was correct, the solution still recommended option C because it had the lowest coefficient of variation (the lowest risk per dollar invested).
I thought about this for a minute. Why do we care about risk? Isn’t EV just EV, period? Why would I choose anything with lower EV?
I thought about my past involvements with risk/reward scenarios such as poker or fantasy football and came to the conclusion that humans, (especially myself), are inherently bad at understanding risk. I think this is because of the limited amount of time we are given. Risk is a negative factor because we are given a set amount of time and we literally don’t have enough time to see the risks play out. After all, we only have 16 games of fantasy football before a champion is determined that season.
2013 has been a tough year for me productivity wise. After accomplishing close to all my 2012 goals, I ratcheted all my goals for 2013 without considering environmental changes. Needless to say Sebastian's latest posts have come at a good time.
The problem is I mentally associated my previous productivity pattern with the norm, and although I can allow myself to ratchet back down, (for instance allow myself to watch 4 hours of television a day), I can't help feeling that this is disappointing.
My weeks consist of a few highly focused, productive days, followed by a few days where I just sit on the couch watching The Walking Dead. This suggests to me that my problem isn't a result of bad ratcheting, although that may be a factor, namely, setting my goal to 4 hours of tv a day and then slowly decreasing that amount to 3 hours and so on, won't fix this. I think there is a structural fix that needs to be done with emphasis on environment. I also think that if I squeeze out all my will power, and create a string of successful days, that the solution will stay permanent (yes, i also believe that will power is a limited resource).
So for now, I will change 3 things:
1. leave the house. Aside from eating, sleeping and other general needs, I will be spending the rest of my time outside the apartment.
About 10,000 new visitors to the site yesterday. If you're new here, welcome. In addition to the blog posts here, one of the nicest things about the site is we have a pretty great community of smart people who make smart comments, share knowledge, and generally treat each other great.
You can see some posts in the Community Section, many are smart discussions.
In this thread here, I'd like to invite you to share what you're working on, and what's holding you back right now. What knowledge are you missing, or skills, or habits? What's not clicking and you're not sure why?
Veterans of the site and new people, you're all welcome. What are you working on?
When it comes to lifting weights, a key principle is performing the most demanding exercises at the beginning of the workout. Each successive movement should be less taxing on your body and your Central Nervous System. For example if your workout includes squats, incline barbell bench press, seated cable rows, and curls - they should be performed in that order. You need more strength and concentration to perform squats than incline press, incline press than cable rows, and so on. An interesting parallel exists between this concept and the willpower needed to complete day to day, non exercise tasks, be it personal or work related. The same basic principle applies. Whichever task you have for the day that requires the most concentration and focus to complete should be done first. The reason is that once you have completed said task, you will have less willpower remaining. You won’t have enough left in the tank to do the hard task at the end of the day. Look at it this way. Squats are a bitch. And if you choose to start your workout with the cable rows instead, they ain’t getting any easier. Then maybe you feel like doing the incline bench press next, you know, put off those squats a bit longer. Before you know it you have done the curls too, and now you physically do not have enough energy (neither mentally nor physically) left to perform the squats safely at a reasonable weight.This is why you discipline yourself to do the squats first thing. Beast them out, and get them out of the way. They are the most important, and also the most taxing.The same thing happens in life. Sure, you can put off the tough project in favor of doing some mindless, but easy tasks, or worse - procrastinating. But it’s only going to get harder to tackle as the days goes on, and your energy/willpower drains with it. The one exception that I can think of is priority-based. That is, you might have an easy task due today and a hard one due next week. In this case it makes sense to prioritize based on more than just difficulty. But, assuming the items are on a relatively even level, importance/due-date wise, then always hit the tough one first.A Couple Willpower BoostersThe one good thing about non-physical tasks is that there are a couple ways to fill up the tank midday. My three favorite are:
Do you schedule your workouts, and your day in such a manner?
I found a solution that worked for me on a recent trip abroad - bodyweight exercises, in particular, the Convict Conditioning programme. I wrote up more details on my own blog: http://i.saac.me/post/struggle-to-maintain-exercise-habits-while-travelling/.
(Excuse the cross-promotion, but I think this programme will be genuinely useful for many people here).
There was a post by Sebastian 3 years ago that I feel needs a re-read. http://sebastianmarshall.com/give-me-strife-and-suffering-but-in-manageable-doses
What do you guys think about Sebastian's type of suffering? He wrote that he would rather die than be average. I think that really resonates with his whole blog. He wrote his life mission in one line.
Total Recall : Arnold Schwarzenegger---Arnold became world class in four different domains in his lifetime -- bodybuilding, acting, politics, business. His root methodology, beliefs, and refreshing honesty can provide a lot of guidance for the ambitious.Benjamin Franklin -- Walter Issacson---Amazing. Teaches you how tor relate with people and gives you perspective. Business, science, politics...not just world class but world historyRoosevelt - Edmun Morris ---One of the most inspiring people -- Very accurate, detailed biography that can give people zeal for hustle. Autobiographies are the perfect mix of personality and non-fiction for me. What are you favorites, what did you learn from them?
Found this on Nicolas Taleb's Facebook page. It helps to understand his concept of "antifragility" - basically, fragile things are hurt by adverse conditions, robust things survive adverse conditions, and antifragile things get made stronger by adverse condiitons.
The classical, mostly Stoic, idea is that what matters isn't the random event itself, but how one responds to it, how one acts when hitting a snag. This was believed by scholars to make people "robust", that is immune from adversity --since we can control how we respond to events. But the point is, once again, misHarvardified: the classical man was vastly more antifragile than academic & library rats want him to be. He was not withdrawn from the world, but above it. His principal asset was in how much courage and fortitude he put in front of circumstances, how he could say "f*** you" to fate, how he defied reversals of fortune.
If that's the case, then he is not robust, as academics want him to be, but antifragile, as he wants as much disorder, adversity, and volatility to show off, to say "f*** you" to circumstances. If so, he is long volatility. The good news is that it takes a certain training. When a certain fellow failed his election bid for the Italian presidency (with an embarassingly low number of votes), as the results of the ballots were being announced, one of the senators was heard telling another: "now watch this man and learn from him how to lose".
It reminds me of this post: http://sebastianmarshall.com/give-me-strife-and-suffering-but-in-manageable-doses, which is why I'm putting it here.
It may seem obvious that you should try to lift up your friends, but are you LIVING it every day?
Are you sometimes being a crypto-crab because you can't stand the ego blow of your friends rising up in life?
Are you 100% always cheering your friends on to achieve more? Are you actively helping them find opportunities? Are you being ever-vigilant in pointing out their follies and mistakes? Would you never for a second entertain the thought of letting your friends stagnate at a comfortable level?
Selfishness is often a good motivator in life, so what is a selfish reason to help your friends?
Remember the old adage that you are the average of your 5 closest friends?
Should you work hard or should you work smart?I think the answer is this: be very, very smart when you select work. Go for Big Wins and things that will keep you upwind in the long term. If you can't do that right now, then spend time investigating options: not all who wander are lost.But when you do work, then work very, very hard.