Aap Jaisa koi

May 6, 2010

Just tried singing Aap Jaisa Koi ( and playing), my first upload 🙂 .

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Our minds set up many traps for us. Unless we’re aware of them, these traps can seriously hinder our ability to think rationally, leading us to bad reasoning and making stupid decisions. Features of our minds that are meant to help us may, eventually, get us into trouble.

Here are the most harmful of these traps and how to avoid each one of them.

1. The Anchoring Trap: Over-Relying on First Thoughts

“Is the population of Turkey greater than 35 million? What’s your best estimate?” Researchers asked this question to a group of people, and the estimates were seldom too far off 35 million. The same question was posed to a second group, but this time using 100 million as the starting point. Although both figures were arbitrary, the estimates from the ‘100 million’ group were, without fail, concomitantly higher than those in the ‘35 million’ group. (for the curious, here’s the answer.)

Lesson: Your starting point can heavily bias your thinking: initial impressions, ideas, estimates or data “anchor” subsequent thoughts.

This trap is particularly dangerous as it’s deliberately used in many occasions, such as by experienced salesmen, who will show you a higher-priced item first, “anchoring” that price in your mind, for example.

What can you do about it?

  • Always view a problem from different perspectives. Avoid being stuck with a single starting point. Work on your problem statement before going down a solution path.
  • Think on your own before consulting others. Get as much data as possible and explore some conclusions by yourself before getting influenced by other people’s anchors.
  • Seek information from a wide variety of sources. Get many opinions and broaden your frame of reference. Avoid being limited to a single point of view.

2. The Status Quo Trap: Keeping on Keeping On

In one experiment a group of people were randomly given one of two gifts — half received a decorated mug, the other half a large Swiss chocolate bar. They were then told that they could effortlessly exchange one gift for the other. Logic tells us that about half of people would not get the gift they prefered and would hence exchange it, but in fact only 10% did!

We tend to repeat established behaviors, unless we are given the right incentives to entice us to change them. The status quo automatically has an advantage over every other alternative.

What can you do about it?

  • Consider the status quo as just another alternative. Don’t get caught in the ‘current vs. others’ mindset. Ask yourself if you would choose your current situation if it weren’t the status quo.
  • Know your objectives. Be explicit about them and evaluate objectively if the current state of affairs serves them well.
  • Avoid exaggerating switching costs. They frequently are not as bad as we tend to assume.

3. The Sunk Cost Trap: Protecting Earlier Choices

You pre-ordered a non-refundable ticket to a basketball game. On the night of the game, you’re tired and there’s a blizzard raging outside. You regret the fact that you bought the ticket because, frankly, you would prefer to stay at home, light up your fireplace and comfortably watch the game on TV. What would you do?

It may be hard to admit, but staying at home is the best choice here. The money for the ticket is already gone regardless of the alternative you choose: it’s a sunk cost, and it shouldn’t influence your decision.

(This example is from an earlier article which focuses entirely on the sunk cost effect. Check it out if you want to know more.)

What can you do about it?

  • Be OK with making mistakes. Examine why admitting to earlier mistakes distresses you. Nobody is immune to errors, so you shouldn’t make a big deal out of it — just make sure you learn from them!
  • Listen to people who were not involved in the earlier decisions. Find people who are not emotionally committed to past decisions and ask their opinion.
  • Focus on your goals. We make decisions in order to reach goals. Don’t become attached to the particular series of steps you took towards that goal; always consider how you can better fulfill that goal from now on.

4. The Confirmation Trap: Seeing What You Want to See

You feel the stock market will be going down and that now may be a good time to sell your stock. Just to be reassured of your hunch, you call a friend that has just sold all her stock to find out her reasons.

Congratulations, you have just fallen into the Confirmation Trap: looking for information that will most likely support your initial point of view — while conveniently avoiding information that challenges it.

This confirmation bias affects not only where you go to collect evidence, but also how you interpret the data: we are much less critical of arguments that support our initial ideas and much more resistant to arguments against them.

No matter how neutral we think we are when first tackling a decision, our brains always decide — intuitively — on an alternative right away, making us subject to this trap virtually at all times.

What can you do about it?

  • Expose yourself to conflicting information. Examine all evidence with equal rigor. Don’t be soft on disconfirmatory evidence. Know what you are about: Searching for alternatives or looking for reassurance!
  • Get a devil’s advocate. Find someone you respect to argue against the decision you’re contemplating making. If you can’t find one, build the counterarguments yourself. Always consider the other positions with an open mind (taking into account the other mind traps we are discussing here, by the way).
  • Don’t ask leading questions. When asking for advice, make neutral questions to avoid people merely confirming your biases. “What should I do with my stocks?” works better than “Should I sell my stocks today?”

5. The Incomplete Information Trap: Review Your Assumptions

Harry is an introverted guy. We know that he is either a librarian or a salesman. Which one do you think he most probably is?

Of course, we may be tempted to think he’s almost certainly a librarian. Haven’t we been conditioned to think of salesmen as having outgoing, if not pushy, personalities? Too bad this reasoning may be dead wrong (or at least incomplete).

This conclusion neglects the fact that salesmen outnumber librarians about 100 to 1. Before you even consider Harry’s character traits, you should have assigned only a 1% chance that he’s a librarian. (That means that even if all librarians are introverted, all it takes is 1% of introverts among the salesmen to make the chances higher for Harry being a salesman.)

That’s just one example of how overlooking a simple data element can make our intuitions go completely astray. We keep mental images — simplifications of reality — that make we jump to conclusions before questioning assumptions or checking whether we have enough information.

What can you do about it?

  • Make your assumptions explicit. Don’t take a problem statement as it is. Keep in mind that for every problem you’re using implicit information — your assumptions. It’s usually not hard to check the validity of assumptions, but first you need to know what they are.
  • Always favor hard data over mental simplifications. Our preconceptions — such as stereotypes — can be useful in many situations, but we should always be careful to not over-rely on them. When given the choice, always prefer hard data.

6. The Conformity Trap: Everybody Else Is Doing It

In a series of experiments, researchers asked students in a classroom a series of very simple questions and, sure enough, most of them got the answers right. In another group, they asked the same questions but this time there were actors posing as students, purposefully pushing wrong answers. This time around, many more students provided wrong answers based on the leads from the researchers’ assistants.

This “herd instinct” exists — to different degrees — in all of us. Even if we hate to admit it, other people’s actions do heavily influence ours. We fear looking dumb: failing along with many people is frequently not considered a big deal, but when we fail alone we must take all the heat ourselves. There’s always peer pressure to adopt the behaviors of the groups we’re in.

This tendency to conform is notoriously exploited in advertising. Businesses often sell us products not based on their features, but by showing how popular they are: since others are buying it in droves, why would we not join them?

Conformity is also one of the main reasons why once a book makes into a well-known best-sellers list, it tends to “lock in” and continue there for a long time. People like to consume what “everybody else” is consuming.

What can you do about it?

  • Discount the influence of others. When analyzing information, shield yourself from others’ opinions — at least at first. This is the best way to decide without being subconsciously swayed by popular opinions.
  • Beware “social proof”. Always raise a flag when someone tries to convince you arguing primarily on the popularity of a choice, instead of on its merit.
  • Be courageous. Be willing to overcome obstacles and defend your viewpoints, despite their unpopularity. Don’t be afraid to point out that the Emperor wears no clothes.

7. The Illusion of Control Trap: Shooting in the Dark

Have you noticed that the vast majority of lotto players pick their own numbers instead of using the sometimes available ‘auto-pick’ option (where the point of sales terminal chooses the numbers for you)? We all know that however the numbers are chosen doesn’t change the chance of winning, so why the strong preference for picking our own numbers?

Curiously, even in situations we clearly can’t control, we still tend to irrationally believe that we can somehow influence results. We just love to feel in control.

Of course, it’s always easier to illustrate this trap with chance games, but the tendency to overestimate our personal control of events influences every aspect of our daily lives.

Unfortunately, contrary to the lottery example above, the outcomes of our decisions are usually complex and interconnected. It’s hard to assess to what extent we’re responsible for the results we get. While some of the outcomes can be traced back to our own choices, a part of them will surely remain just as well out of our direct control.

What can you do about it?

  • Understand that randomness is part and parcel of life. Although it may be hard to fathom or even admit it, some things are just random — in the sense that they don’t depend on your effort at all. Accept responsibility for the things you can influence, but know that for many others there is not much you can do. Better than assuming or expecting that every event is under your control is to consciously choose how you respond to them.
  • Beware of superstitions. Consider how much of your decisions are based on things you cannot really explain. Make those unknowns explicit and put them under scrutiny — instead of pretending you can control them.

8. The Coincidence Trap: We Suck at Probabilities

John Riley is a legend. He won a one-in-a-million-chance lottery… twice! That makes it a1-in-a-trillion event — which means that the lottery is rigged or maybe John must have been singled out by Lady Luck, right?

Well, not really. Let’s try a little math: If, throughout the years, 1000 lottery winners keep playing at least 100 times attempting the “miracle” of winning it once more, that adds up to a non-negligible chance of 10%that someone will make it.

This means that the “miracle” is not only possible but — given enough attempts — its likelihood increases to a point of becoming almost inevitable.

Another classic example: it takes a group of just 23 people to make it more likely than not that two of them share the same birthday (day and month).

That’s how unintuitive probabilities are.

What can you do about it?

  • Don’t over-rely on gut estimates. While useful many times, gut estimates will sometimes be way off the mark. Make sure you properly discount their importance or that you understand the ramifications of trusting them.
  • Beware of “after the fact” probabilities. One thing is the probability of someonehaving won the lottery twice — looking at it in retrospect. Another completely different thing is that a particular person — chosen before the outcome — wins it: that would indeed qualify as a one-in-a-trillion event — and would make anyone seriously doubt the legitimacy of that lottery.

9. The Recall Trap: Not All Memories Are Created Equal

What’s your best guess for the probability of a randomly selected flight ending in a fatal crash? While many people grossly overestimate it, MIT studies show that in reality these fatal accidents happen at a rate of only 1 in 10,000,000.

The fact that people suck at estimating probabilities explains only partially this tendency to mis-estimate: if you ask the same question right after a major airplane accident, be prepared for even more biased assessments.

What happens is we analyze information based on experience, on what we can remember from it. Because of that, we’re overly influenced by events that stand out from others, such as those with highly dramatic impact or very recent ones. The more “special” an event is, the greater the potential to distort our thinking. Of course, no one ever bothers about the other 9,999,999 planes that arrive safely at their destinations — so there’s nothing more natural than forgetting about them.

What can you do about it?

  • Get hard data. As usual, don’t rely on your memory if you don’t have to. Use it, of course, but always endeavor to find data that confirms or discounts your recollection as soon as possible.
  • Be aware of your emotions. When analyzing information, try to emotionally isolate yourself from it, at least temporarily. If you’re analyzing an event, pretend it happened a long time ago or that it happened to someone else unrelated to you. Likewise, if asking for opinions, find people who are not emotionally involved with them or their consequences.
  • Beware the media. The media is notorious for exaggerating the importance of certain events while conveniently neglecting others. Always evaluate information on its relevance and accuracy, and not on how much exposure it gets.

10. The Superiority Trap: The Average is Above Average

A study surveyed drivers asking them to compare their driving skills to other people in the experiment. Almost all the participants (93%!) rated themselves as ‘above average’.

With few exceptions, people have much inflated views of themselves. They overestimate their skills and capabilities, leading to many errors in judgment.

And this is the reason I decided to close this article with this particular thinking trap. After making ourselves aware of these many thinking traps, we may now become susceptible to falling into a new one: the belief that we’re now immune to them.

Of course, the first step to avoid thinking traps is awareness and constant vigilance, but beware: it’s much, much easier to notice others falling into these traps than us.

What can you do about it?

  • Be humble. Always remember that everyone has blind spots (yes, that includes me and you)!
  • Surround yourself with honest people. If we all have blind spots, nothing better than having honest people around us to point them out to us.
  • Don’t go overboard. These ‘thinking traps’ are inherent parts of us: they make us human. Applying rigor and rational thinking to our decisions is important, but that doesn’t mean that intuition has completely lost its place. Don’t get me wrong: I still think that knowing about our own thinking traps is very useful — just don’t get too worked up about them.

Credits  : http://www.litemind.com/thinking-traps/

This is more like learning 50 things a day :), some food for thought

Deep in the bowels of the internet, I came across an exhaustive list of interesting Wikipedia articles by Ray Cadaster. It’s brilliant reading when you’re bored, so I got his permission to post the top 50 here.

Bookmark it, start reading, and become that person who’s always full of fascinating stuff you never knew about.

The top 50 Wikipedia articles by interestingness

1. Marree Man
2. War Plan Red
3. Vela Incident
4. Tybee Bomb
5. United States Numbered Highways
6. Wow! Signal
7. Tube Bar Prank Calls
8. Kola Superdeep Borehole
9. Back to the Future Timeline
10. Year Without a Summer
11. K Foundation Burn a Million Quid
12. Sokal Affair
13. Blue Peacock
14. Veerappan
15. Person From Porlock
16. Eternal Flame
17. U.S. Color-Coded War Plans
18. The Wedge (Border)
19. Mohave Phone Booth
20. Stanislav Petrov
21. Valery Sablin
22. The Man on the Clapham Omnibus
23. Special Atomic Demolition Munition
24. Piracy in the Strait of Malacca
25. Prometheus (tree)
26. Zone of Alienation
27. Fan Death
28. Outlawries Bill
29. Raymond Robinson (Green Man)
30. Scoville Scale
31. Kardashev Scale
32. Larry Walters
33. Joshua A. Norton
34. Fabergé egg
35. Issei Sagawa
36. Joseph Jagger
37. Traumatic Insemination
38. James Joseph Dresnok
39. Ivy League Nude Posture Photos
40. Jim Corbett (Hunter)
41. Just-World Phenomenon
42. Nicholas Bourbaki
43. Humanzee
44. Old Man of the Lake
45. Alexamenos Graffito
46. Fairy Chess Piece
47. Michael Fagan Incident
48. ETAOIN SHRDLU
49. Palomares Hydrogen Bomb Incident
50. As Slow as Possible

Credits:http://copybot.wordpress.com/

I was checking out the stock for PALM and was wondering what an institutional ownership above a 100% means. I googled my way through and found out that, although there is no 100 % answer for this phenomenon. A possibility is when institutions/money managers have shorted the shares of a company so heavily even there do not real exist shares to cover the short. That’s one reason the ownership can jump. I wonder what will happen if the short sellers cover their position. We will see a very huge jump in the stock price.

As of march 26th the chart looks like this

The textbook book definition for a greater than 100% institutional ownership is

Because shares that are shorted are owned by more than one party (the original lender plus the purchaser on the other side of the short sale), institutional ownership can exceed 100%. If a share sold short is re-borrowed and sold again, short interest ratios can also exceed 100%.

Asquith, Pathak & Ritter. “Short Interest, Institutional Ownership, and Stock Returns.” Journal of Financial Economics.

Another related interesting term is short float.

Short float: The short percent of float is the percentage of shares short in relation to the number of shares that make up a stock’s float.

The short float for PALM is ~43% right now, which means 43 out of every 100 shares in the market are shorted. That’s a very high ratio for any company. This can be the case when there are strong rumors of a company burning to the ground. My bet is against the grain. We’ll see if this a monetary painful or fruitful learning experience

Bijness is Bijness

March 13, 2010

One day in a school in London, a teacher said to a class of 5-year-olds, “I’ll give 10 pounds to the child who can tell me who was the most famous man who ever lived.”

An Irish boy put his hand up and said, “It was St. Patrick.”

The teacher said, “Sorry Paddy, that’s not correct.”

Then a Scottish boy put his hand up and said, “It was St. Andrew.”

The teacher replied, “I’m sorry, Hamish, that’s not right either.”

Then a Jewish boy put his hand up and said “David”,

The Buddhist boy said “Gautama Buddha” and the Muslim boy said “Mohammed”.

They all were not successful.

Finally, a Gujju boy raised his hand and said, “It was Jesus Christ.”

The teacher said, “That’s absolutely right, Jignesh, come up here and I’ll give you the 10 pounds that I promised.”

As the teacher was giving Jignesh his money, she said, “You know Jignesh, since you’re a Hindu Gujarati; I was very surprised you said Jesus Christ.”

Jignesh replied, “Yes. In my heart I knew it was Krishna, but Bijness is Bijness!!!

On some level I’m sure all gujjus I know feel would do this 😉

There are two kinds of skills that define employees: the hard skills and the soft skills. The hard skills are the technical skills you learn at school such as programming, software engineering, software reliability, operating systems. The soft skills refer to everything else you’ll need to know about working in an organization. Both sets of skills are always important but early your career the hands on technical skills are a little more dominant. As your career advances the soft skills become more important. Senior people are always expected to be leaders, and to play a strategic role in the team, and those expectations set a higher emphasis on soft skills. Both hard and soft skills are needed at every level of your career but the balance changes over time.

Hard and soft skills

During the first 5 years of a career the challenge is typically on developing soft skills, because the nature of our work during that time forces technical skills upon us. After 10 years in the business the converse is true. Soft skills are thrust upon us by virtue of the situations we are put in and the roles we play, and most people
find that staying current in their technical skills remains the hardest challenge. Wherever you find yourself in the path of your career, you will get a head start by sensitizing yourself to the need to develop yourself in both dimensions and finding time to make that happen. Most people develop skills “on the job”, which means they wait for the job circumstances to present a need for them to grow in some aspect of their skill set (soft or hard) and develop the skills at that time. That’s the default strategy that most people use, and it’s a poor one.
First because when you need a skill it’s already too late to start learning it. Second, because one of the great secrets of career success is to develop skills and perform beyond your expected job level. A characteristic of the best technical and business leaders is that they make time for skills growth on a regular basis including
skills outside their immediate business need.

Cultural analysis of India

February 19, 2010

Hofstede Rankings

In the book ‘Outliers’, the author mentions the different cultures and how the people in those particular countries behave compared to rest of the world. This is a ranking composed by an author named hofstede, Who studied different cultures and came up with a rating on how business can be done and how different behavior can be mapped quantitatively. I found it to be very interesting that how people don’t speak back to their boss in India, or give them logically correct suggestions for the fear of the powerful person using influence to do ‘something bad’ to that person…Here’s a rundown for India has Power Distance (PDI) as the highest Hofstede Dimension for the culture, with a ranking of 77 compared to a world average of 56.5. This Power Distance score for India indicates a high level of inequality of power and wealth within the society. This condition is not necessarily subverted upon the population, but rather accepted by the population as a cultural norm.

India’s Long Term Orientation (LTO) Dimension rank is 61, with the world average at 48. A higher LTO score can be indicative of a culture that is perseverant and parsimonious.

India has Masculinity as the third highest ranking Hofstede Dimension at 56, with the world average just slightly lower at 51. The higher the country ranks in this Dimension, the greater the gap between values of men and women. It may also generate a more competitive and assertive female population, although still less than the male population.

India’s lowest ranking Dimension is Uncertainty Avoidance (UAI) at 40, compared to the world average of 65. On the lower end of this ranking, the culture may be more open to unstructured ideas and situations. The population may have fewer rules and regulations with which to attempt control of every unknown and unexpected event or situation, as is the case in high Uncertainty Avoidance countries.

Power Distance Index (PDI) that is the extent to which the less powerful members of organizations and institutions (like the family) accept and expect that power is distributed unequally. This represents inequality (more versus less), but defined from below, not from above. It suggests that a society’s level of inequality is endorsed by the followers as much as by the leaders. Power and inequality, of course, are extremely fundamental facts of any society and anybody with some international experience will be aware that ‘all societies are unequal, but some are more unequal than others’.

Individualism (IDV) on the one side versus its opposite, collectivism, that is the degree to which individuals are inte-grated into groups. On the individualist side we find societies in which the ties between individuals are loose: everyone is expected to look after him/herself and his/her immediate family. On the collectivist side, we find societies in which people from birth onwards are integrated into strong, cohesive in-groups, often extended families (with uncles, aunts and grandparents) which continue protecting them in exchange for unquestioning loyalty. The word ‘collectivism’ in this sense has no political meaning: it refers to the group, not to the state. Again, the issue addressed by this dimension is an extremely fundamental one, regarding all societies in the world.

Masculinity (MAS) versus its opposite, femininity, refers to the distribution of roles between the genders which is another fundamental issue for any society to which a range of solutions are found. The IBM studies revealed that (a) women’s values differ less among societies than men’s values; (b) men’s values from one country to another contain a dimension from very assertive and competitive and maximally different from women’s values on the one side, to modest and caring and similar to women’s values on the other. The assertive pole has been called ‘masculine’ and the modest, caring pole ‘feminine’. The women in feminine countries have the same modest, caring values as the men; in the masculine countries they are somewhat assertive and competitive, but not as much as the men, so that these countries show a gap between men’s values and women’s values.

Uncertainty Avoidance Index (UAI) deals with a society’s tolerance for uncertainty and ambiguity; it ultimately refers to man’s search for Truth. It indicates to what extent a culture programs its members to feel either uncomfortable or comfortable in unstructured situations. Unstructured situations are novel, unknown, surprising, different from usual. Uncertainty avoiding cultures try to minimize the possibility of such situations by strict laws and rules, safety and security measures, and on the philosophical and religious level by a belief in absolute Truth; ‘there can only be one Truth and we have it’. People in uncertainty avoiding countries are also more emotional, and motivated by inner nervous energy. The opposite type, uncertainty accepting cultures, are more tolerant of opinions different from what they are used to; they try to have as few rules as possible, and on the philosophical and religious level they are relativist and allow many currents to flow side by side. People within these cultures are more phlegmatic and contemplative, and not expected by their environment to express emotions.

Long-Term Orientation (LTO) versus short-term orientation: this fifth dimension was found in a study among students in 23 countries around the world, using a questionnaire designed by Chinese scholars It can be said to deal with Virtue regardless of Truth. Values associated with Long Term Orientation are thrift and perseverance; values associated with Short Term Orientation are respect for tradition, fulfilling social obligations, and protecting one’s ‘face’. Both the positively and the negatively rated values of this dimension are found in the teachings of Confucius, the most influential Chinese philosopher who lived around 500 B.C.; however, the dimension also applies to countries without a Confucian heritage.

Credits :
http://www.geert-hofstede.com/hofstede_india.shtml