Moontower #222

Friends,

Some helpful stuff to start your week:

💪🏽Everything I knew about stretching was wrong (7 min read)
by @tylertringas

This post about mobility opens with:

In the past 12 months my body’s mobility and flexibility went from abysmal, a source of persistent pain impacting my quality of life, to pretty darn good. I’m not about to become a stretching influencer, but after a year of researching, trial and error, and hard work I feel back on track and like I have tools that will really serve me and my body for decades. I’m honestly grateful for the big wake up call and I thought I would I share the most important things I learned.

😌Three intriguing findings about pleasure and happiness (9 min read)
by

The skeptics know a lot about psychology. They may believe that the replication crisis shows that you can’t trust anything that comes out of a psychology lab, that traditional psychological research has been superseded by neuroscience or computational modeling, or that the humanities provide us with a richer understanding of how the mind works. These are concerns worth taking seriously.

Still, I’m bullish on psychology and psychological research. In my post Psychology is OK, I list ten robust findings that psychologists have discovered (or at least substantially built upon) in the last few decades, most of which are of interest to non-specialists. Here they are again.

1. Babies have a surprisingly sophisticated understanding of the physical and social world before their first birthday.
2. Our conscious experience of the world is sharply limited; if our attention is elsewhere, we often fail to see what’s right in front of our noses. Check out this classic demo.
3. Memory is not an accurate recording, and despite what many of us think, our recollection of the past is highly distorted. False memories are not difficult to implant, and if you think you have an accurate memory of something that happened a year ago, you are almost certainly wrong.
4. Perception is a complex inferential process; what you see is influenced by your unconscious expectations of how the world works. As a vivid example, developed by Edward Abelson, B looks lighter than A because it’s in shadow, we have an unconscious assumption that shadows darken objects, so the mind “corrects” for the extra darkness. If you cover up the rest of the scene, isolating the two squares, you’ll see that A and B are the same color.

5. All sorts of psychological traits are heritable to a strong degree—not just the obvious ones, such as intelligence, but also surprising ones, like how religious you are.
6. Many sex differences are culture-specific, but others, such as differences in desire for sexual variety, are universal, showing up everywhere in the world.
7. We overestimate the likelihood of infrequent but conspicuous events, such as plane crashes and shark attacks.
8. There is a universal list of things and experiences that frighten people regardless of where they have been raised, such as snakes, spiders, darkness, and heights. This suggests that our fears have been shaped by natural selection.
9. There are universal features of physical attractiveness—such as facial symmetry—and even babies prefer to look at faces with these features.
10. Studies of people from dozens of different countries find that, as we pass middle age, we get more agreeable, more conscientious, and less neurotic.

I want to continue this theme here and give concrete examples of psychological studies that impress me and that I hope will impress you. I’ll zoom in on three papers on happiness and pleasure—a topic everyone is interested in. After reading about these findings, you’ll be bullish about psychology too.

Read the whole article to learn about the 3 recent findings. They have to do with:

1. “pleasure of anticipation and the pain of dread”
2. “a wandering mind is an unhappy mind”
3. …and one that poses a challenging puzzle about what we optimize for that Bloom says “I’ve talked to enough people to know that many see this as a no-brainer—but they don’t agree on which answer is the obvious one.”

Quotes

I have a friend that says, excellence is defined for each person by the most excellent thing they’ve seen. So if you’ve seen something more excellent, it’s actually an advantage for you because it stretches your definition and the definition that you then go to fill up.

Patrick O’Shaughnessy chatting with Daryl Morey

Finally, I must address the topic of whether the effort required for excellence worth it. I believe it is—the chief gain is in the effort to change yourself, in the struggle with yourself, and it is less in the winning than you might expect. Yes, it is nice to end up where you wanted to be, but the person you are when you get there is far more important.

Richard Hamming from You and Your Research

Refer a friend

Money Angle

Years ago, Khan Academy created a game out of RISK outcomes to teach how the invisible hand of markets form consensus, and idea that underpins how price signals marshal resources.

Great 2 minute video:

Sal Khan:

The point of using the boardgame RISK is just to have something that the market can predict. And the big takeaways from this should be whether or not markets are good at predicting complex phenomena. The whole point of this is to understand how markets work, how markets are tied to actual reality, how prices and probabilities are related – prices of securities and probabilities of various events happening.

I think in the everyday world, when you think about the stock market, people don’t realize that those are real people dealing. But here you see the people and you see the excitement, or when people get down on the stock you can see it very viscerally.

[camera pans]

Now you can see people are starting to get comfortable, they’re starting to understand how the trade works, they’re starting to understand the dynamics of the RISK game, so you’re getting a lot more professional trading behavior going on.

A lot of students here, it’s the first time they’ll have experience with a market, this idea of buying and selling things. Even a lot of the parents have never actually bought and sold securities like this before and have seen how the price of a security can connect with some form of reality.

[Kris: love this line]

One thing about simulations is you learn something while you’re in it and then you go home and you think about it and you learn a lot more.

Money Angle For Masochists

Besides mock trading a way prop firms teach market-making and handicapping is to play Trade or Tighten. You can do this with your family, friends, colleagues.

Here’s the rules courtesy of Austin Zhang:

1. Mutually agree on a quantitative figure (e.g. the temperature of a randomly chosen city) and the size of the contract (e.g. $1 per °C)
   
2. Without looking up this value, players must take turns making markets on this figure. This means they must state a price they would be willing to buy at (bid) and a price they would be willing to sell at (offer).

   ✅Neither the bid nor offer may be less aggressive than the previous market.
   ✅At least one of the bid/offer must be more aggressive than the previous market.
   

3. At any point, a player is allowed to trade against any other player’s market. Play continues until a trade occurs.
4. Once a trade occurs, play stops. The contract settles at the value of the agreed figure

This is a commonly played trading game. It’s a good way to guarantee a trade happens between two parties that want exposure. It’s also a fun way to test your intuition.

It’s a lot like Liar’s Poker but you aren’t limited to serial numbers on dollar bills.

This is still played by prop firms.

• Citadel’s “superdays” for trading interns (thread on Wall St Oasis)
• IMC’s Launchpad program in Sydney (LinkedIn post)

Here’s another free resource I found for the codex that aspiring quants might enjoy:

MIT Sloan Business Club’s The Quant Bible (via coursesidekick)

50 pages of nerdom

From My Actual Life

We took the boys and ourselves to the Warriors/Pacers game Friday night at Chase.

I got the tickets for face value from a friend. We didn’t pay for parking (my friend game me a nice tip that just requires a 14-minute walk). We didn’t buy gear or booze but we did get food.

All-in it still cost $1k.

We don’t go often. It was the first time the younger one saw an NBA game live. It was my first time seeing the Dubs at Chase instead of Oracle. Yinh last saw them 9 years ago — at the game Klay dropped 37 in the 3rd — still the greatest live sports moment I’ve ever seen (even better than the Yankees 7th inning comeback in game 6 of the 2000 ALCS to beat the Mariners for the pennant).

If you choose to live in NYC or the Bay Area you just get numb to the costs. Like looking at doctor bill. Numbers feel made up. They should just put one of those parody inspiration quotes on the invoice — “This is America, get fcked or make more money”.

That sounds dark but it’s a direct understanding of your choices. Many have noticed.

Here’s the deal. You can ask normative questions about what should be. If you don’t, apathy wins. But this is in tension with the plainest truth — you can complain but unless you’re going to take an active part in the process to slow the inflation rate you are just wasting mind cycles on things you can’t control. You can only focus how you allocate your budget once you’ve decided your going to live here. This is trade or tighten in real life.

Randall’s rant reaches back to me every time I need reminding (NSFW: language)

Anyway, I was watching this clip from Woodstock ‘94 again and Shannon Hoon refers to the $135 ticket price. That’s $285 in today’s bucks. Coachella tickets are 2x the inflation adjusted price. And Shannon is long gone. Now that’s shrinkflation.

One last one. This is definitely NSFW (language again) but this is just one of those clips I’ve been quoting since I was a teen. Specifically the “does that include me?” line which can weasel its way into many a context.

That line is also how I remember the difference between a Python “)” versus “]”.

I warned you. No tears if you get offended.

☮️

Stay Groovy

Moontower Weekly Recap

• Primer #10: Trade Expressions & Structures
• gpt sparks one up at the moontower
• 21-year-olds making 7 figures on a W2