Book: Hedge Fund Market Wizards

Hedge Fund Market Wizards by Jack D. Schwager.

Summary: The first rule of about traders is never to believe anything that a trader says. If there exist methodologies that can ‘beat a market’ then in divulging this info is not in the best interests of those who are profiting. Hedge Fund Market Wizards is the latest in a series of market wizard books and consists of a series of interviews with hedge fund managers who have been identified as successful. The criteria for success is high returns relative to risk. So, depending on your view of markets, this is either an interesting group to interview, or an interview of a bunch of guys who have won more than their share of large number of coin tosses.

Rating: I like books that interview ‘experts’ in fields as they give one a feel for the culture of the field. Coders at Work by Peter Seibel, for example, is the one book I read before becoming a software engineer that really gave me an idea about what coders thought about. Similar this book’s biggest virtue is that it provides a cultural guide to the what hedge fund managers think about. There is a diversity of different hedge fund styles that are discussed. Schwager does a good job pulling out people’s views, but as the first sentence of this post says, the traders themselves divulge a varying amount about their actual techniques. Still one gets a sense for how they think, and their approach to the world of markets. I particularly like the interviews of Jaffray Woodriff and Edward Thorp (the later invented card counting in blackjack). Likely the portions of the interview that were most interesting were those discussing risk control, with a majority of managers taking on fairly strong stoping methodologies for trading. Another interesting part was the stress associated with managing others money. Recommended if you want to get a glimpse into the culture of hedge funds.

Speculation: LOL, yep. Also I have deleted my own speculation, as if it is correct, then…well…you know 😉

Book: The Pentagon’s Brain

The Pentagon’s Brain: An Uncensored History of DARPA, America’s Top-Secret Military Research Agency by Annie Jacobsen.

Summary DARPA nee ARPA is a U.S agency in the Department of Defense responsible for emerging technologies. If you’ve heard of it, it’s likely because you know that the internet started in part from one of ARPAs projects, a packet switching network called the ARPANET. This book details the history of DARPA, initially created after the launch of Sputnik and the realization that future technology superiority was a key military goal. The book starts with details of the connections between the JASONs, a group of elite scientists and DARPA, and then hits the highlights of much of the research that was funded by DARPA. Sadly my own DARPA funded research (from my previous life) on self-correcting quantum computer was not mentioned 😉

Rating The book shines mostly in the detailed motivations of the agency and it’s relationship with the JASONs. One the technological front I found it a bit frustrating in lack of details (OK so some of this is likely because it is still classified, but others were at a fairly superficial level), and would have likely even more color on the people who ran DARPA. But it’s a good book to get a broad understanding of the agency, where it came from, and what it’s had its hands in.

Speculation One of the most interesting concepts in the book is the idea that the type of research DARPA focused on needed to be “pre-requirements”:

“There is a kind of chicken-and-egg problem in other words, in requirements and technology,” Rechtin explained. “The difficulty is that it is hard to write formal requirements if you do not have the technology with which to solve them, but you cannot do the the technology unless you have the requirements.” The agency’s dilemma, said Rechtin, was this: if you can’t do the research before a need arises, by the time the need is there, it’s clear that the research should already have been done.

Would that it were the funders who want 3 month reports on milestones have this sentence read to them daily!

Technologies that don’t exist do have one specification, that they are not currently specified. If one wanted to work formally in this area, wouldn’t it be cool if we had a formal specification of what we know. A map of the totality of our technological knowledge. If we could then dice this into different views we could, potentially, see where our gaps are, the places where in the totality of all the formal specification, we are missing knowledge. And use this to discover technologies.

Book: The Myth of Mirror Neurons

The Myth of Mirror Neurons: The Real Neuroscience of Communication and Cognition by Gregory Hickok

Summary Mirror neurons are neurons that trigger both when an action is observed and when the action is performed. These neurons were first discovered in monkeys, and their role has been subject to great debate ever since. On the one hand at first blush thee neurons appear to be useful in explaining how perceptions can be linked to actions. On further reflection one might be led to speculate how these neurons might explain empathy, help explain language, and even be useful for a theory of the mind. In this book these later ideas are put to the test.

Rating Probably the most interesting part of this book is being exposed to the methods of argument in cognitive neuroscience. These are both subtle, and of a form that contrasts significantly with the cold hard concreteness of the theoretical fields which I know best. The book has lots of long sections trying to flesh out arguments, so not for the faint of mind. Oh that is a bad pun.

Speculation Mirror neurons show external actions being reflected in a brain at the same place the action is generated. But why do external actions not trigger our own actions? Suppose that they could. Wait, why am I hungry watching the ads during the olympics?

Book: Infomocracy

Infomocracy: A Novel by Malka Older

Summary What would happen if Neal Stephenson were a policy wonk? I believe that this book is the answer to that question. The plot follows an election cycle in a world were a giant search engine runs the election of a variety of micro-democracies who collectively contribute to a global government ruled by a super majority.

Rating Worth the read, if mostly to tickle the part of your brain that can think more generally about political structures and how technology might change politics.

Speculation One thing I’ve often wondered about is scale in governance. To see what I’m getting at consider that the number of people represented per representative in the U.S. House of Representatives has grown from about 30,000 per representative at founding to 700,000 per representative today.
US_population_per_representative In a numerical sense, at a federal level, you are less well represented today because you are a smaller proportion of a representative’s flock. One thought is that we need another layer of representation, in which you have more say at this level, but which then aggregates upwards. While the end result is essentially the same in terms of representation, the impact you can have on a larger chunk of representation is greater, in that the lower layer must be more responsive to your demands. In a sense this is what state governments do, but largely because the constitution cedes orthogonal concerns to the states, the issue under federal guidance don’t directly aggregate from states. In Infomocracy democracy is practiced on a small scale, each person in an very small area votes for their local government. In the story various political parties arise which, in some sense, represent another layer of government, and then there is a final penultimate layer of who controls the supermajority of all these small democracies. Some quick back of the envelope calculations show that this jumps many levels to the highest level in a way that doesn’t have good even scales at each level. In a world where voting is easy and at such a small scale, aggregation could also be quite transparent, so that more layers of representation could be supported, and indeed a base level of the multiplicative factors could be set in stone and more or less layers adjusted as needed. Computers are good for added layers of abstraction, could this contribute to better political hierarchies?

Book: Bloodline (Star Wars)

Bloodline (Star Wars) by Claudia Gray

Summary There was a time when the Star Wars franchise seemed left for dead. Before the prequels, when there was no light on the horizon for any new movies, a time of no new hope for Star Wars fans. At such a time one could forgive a kid like myself for getting a Star Wars hit off of some cheap pulp Star Wars “adult” novels. Then came the prequels, which might as well have actually killed Star Wars, and then the roaring reboot of Episode 7. Those old books were soon deprecated. With a new slate of movies in the works, one would think that there was no excuse to go back to the Star Wars “adult” novels. But I have sinned, and I broke down, purchasing “Bloodline” under the premise that it is a book that is “loaded with context for The Force Awakens”. I would know more than my friends about the context of the new episodes! So well yeah, I guess the summary of the book is that you get some political back story on what must arise to become the First Order.

Rating Re-read the last sentence of the summary. Maybe I’m older, but the novel felt very young adult and the characters thinly drawn. Is this what it feels to outgrow Star Wars?