Notes on learning how to learn

If you saw my reading list I posted previously on my weblog, you might know that I'm interested in how the mind works, how we learn. Based on my often chaotic and unsystematic reading on some of the books on that list (The Master and His Emissary, The Use of The Margin, Thinking as a Science, Thinking Fast and Slow) and mostly, some reading and online videos ("Learning How to Learn" course videos), I have compiled the following notes that I'll share in this post. Recall that the last time I reviewed a couple of books, I had expressed my misgivings about "reviewing" stuff, as I feel it would be a little preposterous of me to review people far more learned than myself. The best I can do is synthesize what I learned from them and try to present that briefly on the blog.

Special thanks, in addition to the authors of the books listed above, goes to Barbara Oakley (whom my notes will sometimes copy verbatim) and Terrence Sejnowski who conduct the course "Learning how to learn" on Coursera, which form the basis for a lot of notes below.

A small note: the notes presented here mostly cover the insights on this topic from the perspective of what modern neuroscience and modern psychology have uncovered. I'm also interested in the ancient Vedantic and Yogic systems that have done immense work on these same things following a very different approach, maybe, than what we call 'the scientific method'. But since much of what the modern methods are uncovering had been articulated by these schools rather impressively thousands of years ago, I'm convinced they were on to something, and see great value in their approach as well. In my opinion, there's a lot in that canon that is not yet uncovered by modern science, so it would be at one's own loss to ignore it. However, I will only touch upon my takeaways from the modern works discussed in the books and in the Coursera course in this post. In case you're interested, you can see certain Vedantic ideas on these topics here and here. A Yogic perspective can be found here and here.

So here we go.

1. The Very Basics

- When learning a subject, learn a little bit every day rather than overwork on one day. The rest period is when the neural connections form. The brain works in two modes - focused and diffused. While the focused mode is important to learn new material analytically, the diffuse mode helps form connections between a bunch of separately learned things, and fosters bigger picture and creative thinking. It is important to alternate between focused and diffuse modes. When you put your head down and study you employ just the focused mode. Bring diffuse mode into play by taking a step away from the study table to for exercising, walking, train-ride, or a shower. During these activities what you learned in the focused mode has room to roam around and form associations and consolidate a bigger picture context, and offer 'aha' moments. One caveat: insights from diffuse mode can be forgotten, so carry a notebook.

- Context-switching or multitasking is hard. Human beings are bad at it. Don't. If you do many things, serial-task. But at any given time, focus on one thing.

- Stimulating learning environments are often better than solitude for generating new neurons. If unavailable to you, exercise also provides this benefit.

 - Pomodoro - A simple cure for procrastination. The idea is to make sure to be completely focused on studying (don't do anything else) for 25 minutes, and then giving yourself a 5 minute break (use it to relax, draw a doodle, listen to a song etc) and then go back to another pomodoro, that is 25 minutes of uninterrupted study followed by 5 minutes to relax. Do 4 pomodoros before you give yourself a longer 15-30 minute break before jumping into another set of 4 pomodoros. This has proven to work in numerous studies. To help you stick to this, there are pomodoro device clocks available, or you could just download a pomodoro app on your phone. If you do that, make sure to keep your phone free of socializing apps, and on airline mode or you'll be distracted by incoming calls and messages.

- Know one thing about procrastination: that it is spurred by a feeling of impending pain (intellectual pain in this case, in contrast to physical or emotional pain). Know that the pain is far less once you’ve begun, than when you’re about to begin.

- Practice and spaced repetition make things learned permanent. Caveat, spaced shouldn’t be too spaced.

- When you study before bed and dream about it, it greatly enhances learning by employing the diffuse mode to augment the focused learning you did. Sleep helps retention by removing toxins, and creativity by employing diffuse mode. Salvador Dali and Thomas Edison made use of this.

- Learning by doing is way more effective in deepening and embedding the material in your circuitry. When just reading or listening, try to aim for active listening (vs passive), meaning ask questions, take notes etc.

2. Chunking

Most of us are able to store only about four to seven different items in our short-term memory. One way to get past this limit is to use a technique called chunking. The idea is that by grouping several items into one larger whole, you'll be able to remember much more.

A chunk is a grouping of information sets bound together through meaning or use. To form a chunk is mostly to employ your focused mode thinking to tie together information.

How to form chunks? Steps:

1. Focus your undivided attention on the information you want to chunk - remember that your working memory is very limited. (On average can hold four items/chunks). Quiet, no-distractions.

2. Understand the gist of the thing, the basic idea of the chunk. For this step, it is useful to alternate focus and diffuse modes. Note at this point while you have in a way understood the concept, it is not yet a chunk, or a primitive that you can call seamlessly.

3. Grasping a concept or a solution by reading it ("aha" moment) is not sufficient for expertise. Attempt and solve the problems yourself without external help. This will help you focus not just on how individual steps work but also the connections between the steps. That will glue the steps together to form a chunk. Only doing stuff yourself can create the "mastery" neural patterns in your brain.

4. Context. Not only getting how to use a chunk but also when to use the chunk. Practicing related and unrelated problems helps you see when to use or not to use the chunk. This makes sure chunk is not only firm but also accessible from many paths. Step 4 combines bottom-up "chunking" process (Steps 1-3) with the top-down "big picture" process. Complete learning happens as a result of the top-down and bottom-up processes. One tip here is to skim the whole chapter perfunctorily before you read it in detail, to have context. Also see "Interleaving" later.

Illusions of competence

Importance of recall, mini testing and making mistakes

Simply rereading is much less productive than “Recall what you’ve just read without looking at the book” after each reading. This retrieval process itself enhances deeper learning. (note to self: JEE screening less helpful than JEE main as a learning aid as looking at options did away with the need to recall everything. But that practice is important)

Re-reading is useful only after some space in time, as a means of spaced repetition.

Glancing at a solution and thinking you know it yourself is the most common illusion of competence. Do it yourself to have the knowledge persistent in your memory.

Underlining/highlighting also fools us into thinking we understood the material. Do it carefully, and sparsely. Underline lines that synthesize key ideas, or note those ideas in the margin.

Super helpful way to make sure you’re learning and not fooling yourself with illusions of competence, is to test yourself. In some sense, "recall" does that. If mistake happens, it is a good thing. Mistakes help correct your thinking.

Recalling material is extra helpful when you’re at various places outside your usual place of study, such as while walking in a park, waiting in a line, riding in a bus.

Motivation

Know what motivates you - if you’re genuinely interested in learning something, it’s easy to learn it.

Chemicals in the brain

- Acetylcholine - for focused learning

- Dopamine - controls motivation

- Seratonin - affects social life. alpha males have high. Depressed people have less. Prozac raises level of seratonin. Low seratonin also linked to high risk taking behavior, e.g. among jail inmates.

- Emotions intertwined with learning and memory. Be happy to be good learner.

The value of a library of Chunks, Compaction, Transfer, Creativity, Law of Serendipity

Library of Chunks.

Bill Gates: Weeklong reading periods, Think Weeks.

Transfer.

Once you have many chunks. You see analogies between physics and business, language and CS. A chunk is a compressor. Chunking is like winzip.

As you gain more experience in chunking, you are able to create darker and longer chunking ribbons, meaning more expansive chunks, and better embedded in your head. Once you have a good library of chunks, you can easily get to good solutions by listening to whispers from your diffused mode. The more you practice, the darker the chunks. If you don't they're faint and will go away.

In building a library, you're training your brain to recognize not only a specific concept, but different classes of concepts.

There are broadly 2 ways to figure something out or solve a problem or understand a chapter: Sequential thinking using focus mode, and holistic/global/gestalt using mostly diffuse mode. Often, the most difficult concepts are grasped through the latter. Small caveat, solutions provided by the latter are less reliable and should be checked with the former.

Law of serendipity. Lady luck favors the one who tries. Just focus on whatever you're studying, you'll find that once you put the first concept in your mental library, the second will go in a little more easily and so on.

"Serendipity (or what Johnson calls “happy accidents”) accounts for other breakthroughs. He includes dreams, contemplative walks, long showers, and carving out time to read a variety of books and papers that might lead to “serendipitous collisions” of ideas. "- Bill Gates.

Overlearning, Choking, Einstellung Effect, Interleaving.

Overlearning

When learning a new idea/problem solving approach/concept, you may do it over and over again during the same study session. Some of it is useful, but continuing to do it after you've already mastered as much as you can in a session is called overlearning. Overlearning can help produce "automaticity" in playing piano, tennis. The fact that people can talk while driving between complex traffic is because they have overlearned it and "automaticity" has taken over. If you choke on exams, overlearning can be helpful in overcoming that.

But beware of repeated overlearning in a single study session. It can be a waste of valuable learning time. Once you have an idea down, continuing to hammer it down doesn't strengthen it. Using a subsequent study session to strengthen what you learned is just fine, it deepens your chunked neural patterns. Repeating something you already know perfectly well, is, just, easy. (It rarely helps, for example, with hard math). It also promotes illusion of competence that you've mastered the full range of material, when you've only mastered the easy stuff. Instead you should balance your studies by deliberately focusing on what you find more difficult. Deliberate practice is the difference between a good student and a great student.

Einstellung: Blocked thoughts due to your preceding training.

Your initial simple thought, or a neural pattern that you've already strengthened may prevent a better idea or thought from coming, by creating a rut. Inertia. It is important to be able to unlearn your old erroneous ideas while you're learning new stuff.

Interleaving.

Understanding and mastering a new subject means not only learning the basic chunks but also practicing jumping back and forth between problems that require different techniques. This is called interleaving. Once you have a basic idea or technique down, start interleaving your practice with problems of different types or approaches. When you do the problem right after a concept in a book, you already know it's going to use that concept, so it becomes easy and does not let you practice interleaving. That's why it is very important to do end-of-chapter problems. Also, ask yourself, why some problems call for one technique as opposed to another: knowing how to use a concept or technique isn't enough, you also should know when to use it. Interleaving is hugely important when it comes to building flexibility, creativity, or independent mastery. This is where you leave practice and repetition, and get into ‘expertise’.

Learning by teaching, and by doing: very important methods in addition to learning by learning, and more powerful.

3. Procrastination and Memory. 

Procastination & Memory are related. Why?

For committing to long term memory "spaced repetitions" are a must. But you can only do that if you don't procrastinate, otherwise you'll cram at the last moment. Building solid chunks in long term memory, chunks that are easily accessible by your short term memory takes time. It's not the thing that you want to be putting off till the last minute.

Always remember: Good learning is a bit by bit activity.

How procrastination happens and how to tackle it? (other than Pomodoro)

First things first: willpower is hard. Procrastination, on the other hand, is easy, a negative entropy process, if you will. We procrastinate about things that make us uncomfortable, uneasy, things that trigger our pain centers (intellectual pain). You funnel attention onto a more pleasant task and feel happy temporarily. But sadly, longer term effects of doing this can, in fact, be painful. For example, when you put off study for some time, it can become even more painful to think about studying. The daunting thing that led you into procrastination just became more daunting with less time on your hands. Procrastination begets procrastination. Mark this: procrastination ia a monumental, a keystone bad habit. It shares features with addiction: you start to tell yourself stories to justify it.

Now, let's tackle it. This journey of tackling procrastination is one from unconscious living to conscious living. You should be making your decisions, not your unthinking zombies."Zombie mode" means acting out of habit. A habit can be good or bad. "Chunking" is creating good zombies, good habits. Procrastination is also a habit, a bad one.

Habits have four parts:

1. The cue. This is the trigger that launches you into zombie mode. Seeing a text message from a friend is a trigger, a study-reminder is also one. What we do in reaction to these cues is what matters.

2. The routine: the habitual response on receiving the cue. The zombie mode.

3. The reward. Habits develop and continue when they reward us in some way. Procrastination is an easy habit to make, because its rewards are so immediate and easy. But good habits can also be rewarded. Find ways to reward good study habits.

4. The belief. Habits have power because of your beliefs in them. To change your habit you have to change your underlying beliefs.

Mental tools and tricks to inspire and motivating yourself. 

Its normal to start with a a few negative feelings about beginning a learning session, even when you like the subject. It's how you handle this that matters. Non-procrastinators put their negative feelings aside telling themselves "quit wasting time just get on with it once you get going you'll feel better about it".

Another helpful way: Focus on process, not product or outcome. "I'm gonna spend 1 hour working" is a process-oriented goal vs "I'm gonna finish the homework" which is product or outcome-oriented. To avoid procrastination, focus on process, avoid focusing on the product. Product is what triggers the pain that causes you to procrastinate, because it puts you face to face with the question of whether you'll attain the product, leading to fear, escapism, and procrastination. Focus on the process or processes, the small chunks of time you need over days. Calmly put forth your best effort for a short period. That's easier. Focus "on the moment". Pomodoro works because it rooted in the same idea. By focusing on process instead of product, you back away from judging yourself and instead relax into the flow of the work. The key is when a distraction arises, which it inevitably will, you want to train yourself to just let it flow by. Setting yourself up so that distractions are minimal is also a very good idea: think quiet spaces, switched off phones.

Harnessing your zombies to help you. 
Using our understanding of habits to form good ones.

The Cue: Since willpower is hard, let's minimize the use of willpower in the tackling procrastination. The only place you need to employ willpower is where you look to change to reaction to the "cue", that is, when you go from cue to routine zombie reaction. Cues fall into 4 categories: Location, time, how you feel, reactions. You can prevent the most damaging cues from striking you by shutting cellphone and internet while you're doing pomodoro study sessions. For me food is a distraction/cue, understand what puts you into zombie mode and act to fix it.

The Routine: Key to re-wiring your reactions to the cues is to "have a plan". Plan ahead to "leave your phone in your car when you go to class" etc. By doing this, you took care of the hard part where you struggle with altering your reaction to the cue, by doing something easier: making a conscious decision to cut off the cue before it could strike you. Plans may not work right away but keep at it.

The Reward: Investigate why are you procrastinating, for what reward? Can you substitute an emotional payoff even if small: a sense of satisfaction, maybe? Make it a personal game, does challenging yourself to do 4 pomodoros, as though it were a game, work? You could reward yourself with something you value: an episode of your favorite show, a phone-call to some loved one, an ice-cream. A small caveat, here: stopping periodically for rewards can hamper "flow". Don't be discouraged though, since it anyway takes a few days of ‘pomodoros’ before "Flow" begins to unfold.

Tricks 2.0: The better you get at something the more enjoyable it can become. Deliberately delay rewards until you get task done.

The Belief: Most important part of overcoming procrastination. A strong belief that your new system works is what can take you through. Hang out with non-procrastinators, or people trying hard to be non-procrastinators. Friends who believe in these values.

Juggling Life and Work - Practical tips

- Make a weekly list of key tasks to do (preferably process-oriented goals)

- Make a daily to-do list for the next day the evening before and go to sleep (only 5-6 items, mostly process oriented, product oriented only if totally doable. Some of those can be diffuse mode tasks - such as taking a walk. Get a good mix of tasks, let them not all be similar. Be realistic.) Having it written down the night before helps to internalize it while you sleep and precludes the need to carry the list in your limited working-memory.

- Important: In your daily plan, decide quitting time for the day!

- As you go along with this habit, make notes about what works what doesn't.

- ALWAYS make time for healthy leisure time, it's much better for your productivity than working all day! Preferably play, movement oriented.

- Get at least one pomodoro done as soon as you wake up, preferably the most disliked task.

Ways to access your brains most powerful long-term memory systems.

Visual memory

-Tap into your naturally great visual spatial memory system.
- The funnier and more evocative (i.e. using other senses than sight) the images the better.

For something to move from Working memory (WM) to Long term memory (LTM), first, the idea should be memorized, AND two, should be repeated. Repeat not a bunch of times in one day, but sporadically over several days ("spaced repetition").

Index cards

- Hand-writing things more deeply encodes them in your brain. Ever noticed how you learn so much better from blackboard teaching than from teachers using power-point slides?
- Once you have several cards together. Try shuffling them and running through them all to see if you can remember them. This is practicing interleaving. Once you've given them a try, put them away. Wait and take them out again, before you go to sleep. Briefly repeat what you want to remember, for a few minutes each morning/evening. Gradually expand the time between repetitions as you become more certain.

Another interleaving tip: study every subject every day, even if only for 15 minutes.

Meaningful groups 

- Acronymizing lists. and assigning memorable alternates. e.g. in Trigonometry, "Pandit Badri Prasad Sona Chandi Tole har har bole" to remember Sin, Cos, Tan formulas.

- Memory palace is a powerful technique of grouping things, useful for remembering unrelated items: Walking through a place you know well coupled with shockingly memorable images of things you want to remember. The more you do it the better it gets.

As you begin to internalize the key aspects of the material taking a little time to commit the most important parts to memory, you come to understand it much more deeply. The formulas would mean far more to you, and you develop great flexibility in slinging them around, and navigating through them flexibly, when needed.

4. How to become a better learner.

Two basic tips.

Tip 1. The best gift you can give your brain is physical exercise.

Tip 2. Practice makes perfect but only when your brain is prepared. There are certain critical periods in the development of your brain when sudden improvements occur in specific abilities. Expect them to happen and prepare your brain for them. e.g. The critical period for first language acquisition extends up to puberty.

Renaissance learning and unlocking your potential.

1. Visual metaphors as aids to memory. Discussed before.

2. No need for genius envy. Smaller working memory mean less Einstellung problems. Forming chunks may take longer, but once done, you can use it with great versatility. Also, "deliberate practice" makes gifted. Deliberate practice is the idea that you need to make your practice, the problems you attempt successively harder. Deliberate practice is doing everything to avoid illusions of competence, being meticulous about identifying your weaker aspects in a subject/skill and inventing methods to work and test that aspect. Of course, broader planning is necessary to keep this sustained. 

3. Change your thoughts, change your life. One, understand Fixed mindset vs Growth mindset. Two, the ability to change your mind and admit errors is another type of intelligence - the virtue of the less brilliant, as Santiago Cajal calls it. Another virtue to imbibe is taking responsibility of your own learning - referring, by your own choosing, different books and videos for the same topic makes you realize the true reality of the subject has more dimensions than what your teacher taught you. One more advice - with dispassion, know when to cut willful detractors out of your circle.

4. Teamwork. The left hemisphere of your brain, which is responsible for focused mode, analytical thinking, also has a tendency for rigidity, dogmatism, clinging to ideas, and egocentricity. For example, when you're absolutely certain that what you've done on a homework or test is fine, and refuse to check it, it means that you are refusing to use your right-brain, the part that makes sense of the whole, the big picture. Be aware that this feeling may be based on overly confident perspectives arising in part from the left hemisphere. When you step back from a problem and recheck the solution, you're allowing for more interaction between the hemispheres, taking advantage of the special perspectives and abilities of each.

Teamwork is a great way to overcome such blind-spots, as working in teams forces you to use your brain in various different ways - focused mode as well as diffuse mode. But group study sessions shouldn't become socializing occasions, in that case you're best off to find another group.

5. Testing. Take frequent mini-tests. Taking a test you study for 3 hours seamlessly, compare this to how hard it is for you to study with such concentration otherwise!  Checklist before exams: did you make a serious effort to understand the text? (Just hunting for relevant worked out examples doesn't count) Did you work with classmates or at least check your solution with others? Did you attempt to do every problem yourself before working with classmates? Did you participate actively in group discussions? Did you consult with the instructor when you were having trouble? Did you understand all your homework problem solutions? Did you ask for explanations for solutions that weren't clear to you? Did you attempt to outline a lot of the solutions quickly without getting into details? Most importantly, did you get a reasonable night's sleep before the test? Hot tip: Start with hard - Jump to Easy. Activates both the focus and diffuse modes, also avoids Einstulleng.

 

Another important note to myself

Always make sure to check your answers. If you tend to feel too lazy about it and usually skip it, know that you refusing to use a particular part of your brain (as a matter of fact, this particular part resides in the right hemisphere - responsible for making sense of the bigger picture). A tendency to not use specific parts of your brain can lead to sloppy work. You should use all parts of your brain.

"The first principle is you must not fool yourself, and you are the easiest person to fool". - Richard Feynman

Antidote

Never do anything for want of vindication.

Things you do for want of vindication tend to happen in fits and starts, are doomed to be inconclusive, and have a way of lingering on like a bad taste. They are a sure shot way to persistent, chronic sapping away of your energy and creative capacity.

Often it is easy to fool yourself into thinking that you're doing something to make past wrongs right, when actually you're just seeking vindication. First, be very careful about deciphering what it is: the former or the latter. If you think it is the latter, tell yourself a hundred times that it is the latter, and stop right away. If you think it is the former or are just not sure, do everything in your capacity to make any probable wrongs as right as you can, and then, stop.

My wishes for 2016

1. That I can enhance, at a faster pace than before, my ability to just put my head down and study.

2. That I turn insights into habits, by internalizing if-then causal relationships and use it to forego instant gratification*. "Insight separated from practice remains ineffective" -Erich Fromm

2. That humility, that rarest of genuinely held qualities, becomes, at least, ever so slightly more pervasive in the world.

3. That when someone writes someone a letter, it is read by the recipient. I wouldn't go so far as to wish it is always replied to, but that it is read I do wish, even for the most unlikable of senders.

4. That I'm able to avoid all situations where I feel compelled to lie. That if I do face such situations, I stand for truth anyway.

5. That the cockroaches that I knowingly kill forgive me. More importantly, in case there's a provider-dependent schematic in cockroach communities, that their dependents can forgive me. Better still, that my apartment stays cockroach-free.

6. That I'm able to genuinely inspire someone. Inspire by way of being, that is, not by accomplishments.

7. That people who harm themselves, stop harming themselves. That people who harm others, also stop harming themselves.

8. That I exercise regularly (learn swimming!), and eat healthy. That others do so too.

9. That I can link my identity to my over-riding purpose alone.

10. That I meditate regularly.

*Through 9 and 10.

Recent Reading

In breaking this blog's tradition of not delivering on promised posts, I will now write down my thoughts on the books, as some would recall, I had mentioned to be on my near term reading list a couple or so months ago.

(1) "On Thinking For Oneself" (Schopenhauer)

This essay is one I found very, very perceptive. And it's not even that long, so I'd highly recommend reading the essay itself rather than some random blogger's review of it. But in any case, let me restate the gist of the essay: The mind needs alone time. This insight is probably a lot more relevant today than in those presumably simpler times when Schopenhauer wrote the essay. For those who have read Schopenhauer otherwise, it is hard not to notice the patterns in this essay, too, that borrow ideas from Upanishads and Vedic philosophy (or Vedanta, if you prefer that term). He contends that making your mind work too hard and too often can be counter-productive: if you keep studying one thing after another, when do you think in peace about what you've read? The mind needs time to assimilate and mull over what it has consumed; it is only by this process that you internalize concepts to such level of comfort that you can think in an original way about them without distorting the fundamentals, and that is when you really 'own' or 'know' the concept; without it you merely 'borrow' it, or 'believe' it. Upanishads say something very similar when they state that the way to truly 'know' is by going through the stages of 'shravan', 'manan' and 'dhyaan' (in English: reading/listening, mulling it over in your head, and then meditating upon it). Anyway, I'll leave you with that. If you're interested: here's the full essay: http://insomnia.ac/essays/on_thinking_for_oneself/

(2) "Expected Returns" (Ilmanen)

If you're interested in Empirical Finance, this book is what I would call "most value per unit time", and it's no small feat given there are more than 500 pages here. To 'review' it would be rather preposterous of me, for I have studied finance not nearly as deeply as Antti Ilmanen, so all I can say is: I learned a lot reading this book. If you really want to understand at a fundamental level why prices of securities are what they are, and why they move in ways that they do, this I think is the best 'big picture' book for that I've ever read. It's not an introductory text, so if you're very, very new to this stuff, the CFA Level 1 material would be an appropriate pre-requisite for you before you start on this book, although I will say that you'll be surprised how much this book can magnify your understanding with even that little prior background. I would like to think that I have a much more rigorous education in Empirical Finance than what CFA affords, but even for me (and possibly those much more seasoned than me) this book is a treasure trove. There are pearls of wisdom on every other page. The book is probably not as mathematically rigorous as a text-book, but that is because it doesn't aim to be. It aims to develop intuition and understanding, and does an amazing job of it. Mathematical rigor is often more useful later on, once you have the necessary understanding to think of ideas, and are working on "testing" the ideas out. When what you seek is that level of mathematical rigour, a canonical book would be Cochrane's "Asset Pricing". But there's another caveat: To really be rigorous, you will have to get your hands dirty and collect, clean, organize data, write code, and run statistical tests on your own: merely reading Cochrane's book will not cut it for you. And that's nothing against his book: it is just that you can only learn by doing.

* * *

This is all I'm willing to say for now. I've also read 'Efficiently Inefficient', 'Fault Lines' and "Vivekachoodmani' so far, but haven't thought through them enough in leisure that I would feel sure I know something about their contents well enough to comment about them (refer back to review 1 of this post - now you know why I covered that first). I will write something on those books next. I'll most likely add stuff to the two books I already covered above as I 'mull over them' more as time passes. 

Diwali wishes to those who read this blog

Happy Diwali everyone.

No, really. This is not a post. This is just to wish you guys.

Hope you have a lovely Diwali, and hope you eat lots of peanuts in the winter sun in the coming days. Of course, this only goes for those of you who are in India.

If you're in the US, on the other hand, although I don't think you are, I hope you find a parking spot under some shade so you don't have to shovel everyday to uncover your car from under the snow.

If you're neither in India, nor in the US, who are you and why do you care about Diwali? Let me know. For you, I don't know what to wish, except recount the famous words of the great modern day philosopher and sage Salman Khan: "do whatever you want to do man".

Important news that the popular media omitted - 1

In the past couple of weeks, there have been developments that IMHO are rather important but that, not all that surprisingly, aren't anywhere to be found on the news channels, even though they do have some modest print and digital representation. I'm thinking since this happens on a regular basis, I'll make this a regular feature on the blog.

So the 2 things I find most under-represented this week are:

(1) India started accepting gold deposits as if it were money, that is, you can earn interest on it. Gold had lost much of its legitimacy as money globally after the abandonment of the gold standard, but it looks like it is making a comeback, and India is at the helm! Now Warren Buffett can no longer say that there is no way to value it (the interest payments take away the abstraction by a great deal), or that 'civilized people don't buy gold'. Well, he still might say that. In any case, it is a very interesting experiment and deserves to be watched closely.

(2) India's states can now issue debt in the capital markets accessible to foreign investors. I believe it opens many doors, though prudence will be needed on the part of the state governments as not every open door should be walked through. I'll be watching closely.

Thankfully, TV channels did report the move away from China's well-known one child policy.

Sort of tangential, but since I'm vaguely criticizing news channels, here's an astute piece on why news can be harmful. Though, unlike me, it isn't quite concerned about errors of omission. 

Aha!

Read this today:

'Tis an old maxim in the schools,
That flattery's the food of fools;
Yet now and then your men of wit
Will condescend to take a bit.

- Swift, "Cadenus and Vanessa"

Postlude

Some truths can only be said in jest and some necessarily in verse;
and then there are some nutcases that must come out in a curse.
Which one of these I'll use today should be evident to you by now:
it's only fair that the mode I choose be one that really was hers.

There are those who always want back what to them is dear;
to champion them is not in me, despite how it might appear.
It's rather late, anyway, to want, but there's scope, still, to fear:
what if unlike so much else, love would not disappear?

[February 23, 2015 | Princeton]

A sweet memory

It was the summer of 1993, I was 7. I used to study in class 2 B in The Air Force School. We lived 10 kms away from school, which, by New Delhi standards, was a school very far from your home, at least in the early 90s.  So we had a school bus fetch me from a stop close to my house, and a school bus would drop me back there in the afternoon. My dad, who served as an officer in United Bank of India in those days, would come home at around 6:30 PM everyday, and that is when I would see him after 7 AM in the morning, when I boarded the school bus. Most other kids in my class were children of Air Force Personnel who worked in the vicinity of the school, and therefore, came to the school to get their kids at 2 PM when the get-outta-here bells rang. Since I had a bus to fetch and drop me, my dad never came to school. It was nothing too bad, for it was the same for everyone who stayed far away. But for some reason, on this particular day in the second term of standard two, while sitting in the classroom for the last period of the day, I really really really wanted for my dad to come too. It was stupid, of course, and it was out of the blue. This day was just like every other day of the last one and a half years since I had joined this school, except for my sudden, silent, inexplicable urge to have him come pick me up. When the bells rang, and the class teacher organized all of us in a queue to show us out to the main gate of the school, my urge intesified. I remember distinctly how much at that moment I felt like I would hate, hate, hate to step into the bus, find an empty seat, keep my bag on my laps, and look out the window. I just couldn't bear to do it that day, for reasons unfathomable to me even today. The queue started moving, and approached the main gate in a couple of minutes. My dad was standing there. I don't merely use a figure-of-speech when I say that I closed my eyes and opened it again to make sure who I was looking at was my dad. There was no discernible reason that of all the days in the last one and a half years, today would be the day that he would show up randomly. To this day it ranks as one of my happiest few moments, those microseconds in which I felt ineffably infinite.


For many days that followed, I wondered to myself during quiet moments. Did I really bring him there by sheer will of urge? Some months later, I tried really hard to "re-want" him there. At around 1:30 PM I started doing "God please make Papa come fetch me today" repeatedly in my head, but it didn't quite work.

Dude!

Sometimes, I come home, put something on the TV (it doesn't even matter what) and then go straight to the kitchen, rummage the fridge and the cupboards for anything edible, and manage to eke out a diverse collection of distinct eatables with little compatibility with each other, and go back to the sofa in front of the TV. Then just as I am sitting down, I stand back up, and bring a can of Pepsi, and come back.

And then I eat. And I eat, and eat.

Today was one of those days.

Yeah, and then I feel guilty. Sometimes, I feel so guilty I decide to put it on the blog to shame myself as punishment. Oh, yeah, no kidding.

Leverage and Volatility

Suppose a trader predicts a given stock to rise by 25% over the next 10 days. Of course, if he is unleveraged, if the stock does indeed rise by 25% in 10 days, his 10-day return will be 25% irrespective of how volatile the stock price was in the interim. This, however, is far from true were he leveraged (i.e.trading on margin, as opposed to trading unleveraged while taking outside loan for providing capital). If he was 300% leveraged, then his return at the end of 10 days, is far from 100% (4 times 25%) as one would naively imagine, but a devastating -47%, in the volatile scenario 1. It is only in the non-volatile scenario 2 that leverage actually multiplied his returns.

Notes to myself on Investing

The biggest enemy of an otherwise prudent investor is an inability to sit tight. If he only acts upon his strongest convictions, in terms of putting on trades, and lets the low conviction trades pass by without feeling compelled to "see what happens once I put it on", he will over the long term be profitable. I have learned this from experience, but it is echoed by such great investors as Warren Buffett, that I do not have to worry as much about depending solely on my experience. Another note: don't depend solely on anything, irrespective of what thing it is. Well, depend on it at times, but don't bet the bank on it.

Of course, all this assumes that he is otherwise prudent, that is, understands the mechanics of the global markets well. This again, is not a 'talent'. It is a skill developed through self-effort. Self-effort, again, does not translate to merely working hard, although working hard is an indispensable part of it. In the context of investing, working hard entails reading a lot: books, academic research, market research. If hard-work was all, you could just maximize your profits by maximizing the numbers of pages read. However, this indiscriminate focus on quantity falls short on three things:

(1) Separating wheat from chaff: Deciding what to absorb and what to ignore is important, because much of what is out there has greater potential to harm than to benefit. Partly, this discrimination comes from experience, but I hope that not all of it must come through experience, because experience in this case often means trading losses. There is some respite. Discrimination also comes from a general attitude of thinking for oneself, even when reading. Too much reading is no better than gluttony: you become so busy eating you forget you have to clean and eat. Arthur Schopenhauer expresses it very will in his essay "On Thinking For Oneself":

The visible world of a man’s surroundings does not, as reading does, impress a single definite thought upon his mind, but merely gives the matter and occasion which lead him to think what is appropriate to his nature and present temper. So it is, that much reading deprives the mind of all elasticity; it is like keeping a spring continually under pressure. The safest way of having no thoughts of one’s own is to take up a book every moment one has nothing else to do. 

(2) Reading is not understanding: You have got to leave enough time to mull over things you have read, but perhaps this belongs to the previous bullet point. What definitely belongs here is to emphasize that it is very easy to misunderstand content when your fundamentals are not strong. Therefore, as important as it is to read, it is of greater primacy to study. Study entails not reading the latest book of economic wisdom acclaimed by one and all, but reading and solving problems from your boring, old textbooks. It is important that you have studied back in college (other than being rejected by a hot (to you, at any rate) girl) if you are to take away the important lessons from all the reading you will do as an investor. If you didn't, do that first. Depending on the kind of investor you are, it may include macroeconomics, accounting, statistics, financial mathematics, or all of them.

(3) Being wary of confirmation bias: Irrespective of what or how much you read, it is easy to come out of it with just your prior opinions solidified, as the mind has a tendency to read every little reaffirmation of your prior beliefs in bold, life-sized print, and read everything that's not so agreeable in Arial Narrow. So be careful. It is also important to emphasize breadth, than to read five books about the same thing, your favorite topic. Investing is a complex subject, it lacks the hard rules governing the physical sciences like Physics, and it is often tempting to ignore this aspect of investing, especially the more mathematical your training is. Don't. Because of this nature of investing, breadth has a depth all its own. Read widely. Read about things not immediately applicable to your next trade. CLR James and Harsha Bhogle rightly re-ignite Rudyard Kipling's famous sentence on England by applying it to Cricket: "What do they know of Cricket who only Cricket know?" The essence of this wisdom has a central place in investing. "What do they know of Equities who only Equities know?" Replace 'Equities' with any specific part of financial economics, and you will see what I mean.

In essence, make the goal of your reading be "to improve your perspective", and the three points above will largely be taken care of.

Reading list for the near future

Philosophy of Mind
Arthur Schopenhauer "On Thinking for Oneself"
Henry Hazlitt "Thinking as a Science"
Francis Bacon "On Studies"
Herbert Spencer "What knowledge is of most worth?"
E.H. Griggs "The Use of the Margin"
Adi Shankara "Vivekachoodamani"
Anonymous "Kenopnishad"
Anonymous "Taittriya Upanishad"
Swami Chinmayananda "Self-Unfoldment"
Iain McGilchrist "The Master and His Emissary"
Richard Thaler "Misbehaving"
Daniel Kahneman "Thinking Fast and Slow"

Finance and Economics
Andrew Ang "Asset Management"
Antti Ilmanen "Expected Returns"
John Cochrane "Asset Pricing"
Lasse Heje Pedersen "Efficiently Inefficient"
Steven Drobny "Inside the House of Money"
Will Durant "The Lessons of History"
Ray Dalio "Economic Principles"
George Soros "The Alchemy of Finance"
Robert Shiller "Irrational Exuberance"
Raghuram Rajan "Fault Lines"

Biographies
Robert Kanigel "The Man Who Knew Infinity"
Richard Ravitch "So Much To Do"

Fiction
William Trevor "The Story of Lucy Gault"
John Banville "The Untouchable"
P G Wodehouse "The Most of P G Wodehouse"
Kingsley Amis "Lucky Jim"
_________

Will write a review on this blog for each (more likely 'lessons from them' than 'reviews of them') once I read them.

Why waste words ..

.. when everything that you have to say is best said without any.

Inflection

This is the 18th of July 2015.
Nothing happened to me today.

Remembering Orkut

Back in the restless days of my undergraduate existence, I was a fairly active orkut person. I spent around two to three hours every week on orkut, and I never just surfed around - that time was spent actively messaging people, or 'scrapping' them, as it was lovingly called in orkut parlance - and I used to almost exclusively scrap girls from my high school who I had been out of touch with for over an year. Two to three hours a week might not sound like a lot to most millennials, but I am talking about 2006, and times, I kid you not, were simpler: walking half an hour at night for a Rs.10 glass of orange juice at a small corner in Rohini sector 16 used to be enough to get us boys all excited, so you can do your own calculations. Anyway, the advent of orkut had made me a bit of a popular kid among my friends. My friends were mostly small town guys: I don't think any of my close friends at DCE, except Adyansh, were Delhiites (Abhineet too, but he became a friend in 2007). At first, I had found them rather different from kids I grew up with in Delhi. It took me much longer to become thick with them than it took for them to get thick amongst themselves. But soon enough, I had not only accepted the differences, but rather realized that the ways in which they were different from me were mostly ways in which they were better than me, ways in which I'd like to change to be more like them. It has to be said, though, that one of those differences worked in my favor. I wrote more educated-sounding English sentences, and boy was that ever more prized than in the orkut days when every girl we wanted to talk to seemed to have a profile written in prim, pristine, Queen's English? True, there were also the 'i luv mah frnz' girls, but they were for some reason never the most sought-after ones. I rose to prominence in my hostel as the guy who could not only write you an orkut profile fairly eye-catching, but given the right incentives, might also write you a stellar 'testimonial'. Most of my zero-fee clients, engineers that they were, wanted the same things in their testimonial: that they don't study at all and still top their exams, that they were fun-loving and funny but were also daredevils ready to put themselves in any harm's way for their buddies. It is Delhi, mind you, and a facility with hot-blooded brawls was deemed to be a badge of honor for guys, even if the girl on the judgement chair were a Stephens educated, feminist, marxist, artist. One of my clients I wasn't a big fan of, let's call him NR. The testimonial I wrote for him read: "Basically he's a nice guy." I could have written "He's basically an asshole" to be more honest, but such testimonials were common and were supposed to be inferred as tongue-in-cheek jibes, intended actually to enhance the coolness quotient: 'we're so cool we insult each other with orkut testimonials', went the dictum. So that wouldn't have worked. But there was no redeeming factor for praise as mild as someone being "basically a nice guy", as if you couldn't find anything more remarkable to say about him even when writing a testimonial. It was the ultimate put-down. Expectedly, he didn't accept it. Moreover, the offense NR took exceeded even my expectations: he came to my room that night, and told me he had more 'fans' on his profile than I had 'friends'. ('Fans' was another orkut gimmick - basically you could choose to identify as a fan of any of your friends, and everybody's fan-count was displayed atop their profiles. It was the ultimate backscratching rehearsal for people entering the workforce.) I apologized, but he unfriended me anyway.