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Sunday, August 03, 2014

Aggressive Tactics

As I have gotten older, one thing that has becoming increasingly clear is that the optimal strategy is aggressive. In some fields, such as NFL football, chess, and poker, it has essentially been mathematically proven that aggressive participants will exploit the passive ones.

These examples are zero-sum, in that what must be good for player A is necessarily terrible for player B. Math suggests that NFL coaches should go for fourth downs even in situations that would be publicly vilified by uneducated audiences, such as 4th-and-1 on one's own 40-yard-line.  In poker, constant aggression by the best players appears to border on recklessness to the casual player.

What I have ascertained is that similarly aggressive mindsets benefit all fields in life, whether it be business, relationships, or other industries.  I concede that not all these arenas are traditionally defined games, and basic economic principles such as comparative advantage render the assumption of a zero-sum game silly.

However, the Earth is a planet of limited resources.  Each of us human beings is painfully aware of our finite time and money.  I am a strong advocate of aggressive action, especially when it comes to managing one's life.

Analytics tell us that we have dishearteningly little control over the results of our lives, such as how much money we make or when we die.  We do have control over the processes used to effect those outcomes though.  While acknowledging that variance, or if you prefer, luck, has an enormous role in everything, we can derive happiness from the decisions we elect to make in life.

I do not want to be doing the life equivalent of kicking field goals instead of going for touchdowns. Similarly, life is too short to check-call instead of betting and raising.  Even in the nascent world of soccer analytics, it will be more clear that the teams that aggressively advance the ball at the risk of losing actually win more.

As a fallible person, I am prone to making errors of passiveness.  When my friends observe such mistakes, I can see them shaking their heads, lamenting the poor decision-making in the same manner that I would rail against a baseball manager opting for a sacrifice bunt--an atrocious tactic.  In this way, my behavior is as sadly passive as those sports managers who opt for the safe but wrong decision.  Well, I have decided to do the right move and quit my job.

Thursday, July 31, 2014

Nate Silver Makes Poker Players Sound Like Geniuses

If I ever apply for a real job again, I will want to reference the following quotations from Chapter 10 of Nate Silver's The Signal and the Noise:

Poker is an incredibly mathematical game that depends on making probabilistic judgments amid uncertainty, the same skills that are important in any type of prediction.

Skilled poker players are probably better than 99.9 percent of the population at making reasonably good probabilistic judgments under uncertainty.

Thursday, July 03, 2014

How to Estimate Someone's Income When All You Know Is Where He Parked

You are going to a baseball game.  In this example, you are going to see the NL East-leading Washington Nationals, who played in Southeast Washington, D.C. by the Navy Yard.  If you get to the ballpark via your own automobile, you have 10 official parking lot options.  There are myriad private lots as well but for the purposes of this analysis, let us assume that their locations and prices align with the map below.




The Nationals have categorized these 10 lots into three color categories.  We can evaluate each of these 10 options on their primary benefit (distance to Nationals Park) and cost.  We are ignoring complicating factors like the impact of traffic from each of these lots after the game has concluded.

There may be issues of limited availability but the Nationals do not sell out regularly so we can presume that their parking lots have ample space.  From my personal experience, Lot W (the cheapest) had many spots available.  In addition, we are ignoring the Prime prices listed within parentheses, which are reserved for high demand games, such as those against the New York Yankees.

We can make several immediate conclusions.  One, parking in Lot F when Garages B and C are available is downright silly, as B/C saves 6 total minutes of walking at no additional expense.

Similarly, parking in Lot U vs. Lot T saves only 2 minutes yet costs an incremental $5.  If these were the only two lots in existence, Lot U could only be justified if this person valued his leisure hour at $5 per 2 minutes, or $150 per hour.  This rate would equate to a yearly income of $300,000, based on a 2000-hour work-year.

The pricing vs.time saved for these lots is inconsistent.  For most people, they should only park in Garages B/C or Lot W.  A person who parks in Garages B/C will save 26 minutes and spend $34 more than if he were to park in Lot W.  That implies an incremental hourly value of $78.  On average, this person who has parked 0.7 miles closer will out-earn his Lot W counterpart by $156,923!

Lot Price One-Way Distance (miles) Round-Trip Walk Time (minutes)
B/C $44 0.0 2
F 44 0.2 8
H/L/K/P 37 0.2 10
T 22 0.5 20
U 27 0.5 18
W 10 0.7 28

Wednesday, February 26, 2014

Tuesday, February 25, 2014

Newspaper Wineclubs

What do The Wall Street Journal, The New York Times, Los Angeles Times, and USA Today have in common?  If you answered that they are internationally recognized newspapers, you ignored the title of this post.  The true answer is that they are all strange purveyors of subscription wine clubs by mail!

Of course, these businesses outsource the actual operations to companies like the generically named Global Wine Company.  I reckon that the demographics of these staid newspapers align perfectly with regular imbibers of vino:  old, educated, and physically lazy.