Scaffolding....................

 

Well, let’s go back to David Ausubel’s 1960 experiment. Ausubel gave college students a short conceptual overview before they read difficult, unfamiliar material. The students who got that overview, which he called an advance organizer, retained the material significantly better than the students who went in cold. The idea has held up for sixty years: before you learn something hard, your brain needs a scaffold, a rough map of what’s coming, so new information has somewhere to attach. Without the scaffold, a 2,800-year-old epic poem is just old names and boats. With the scaffold, every page slots into a picture your kid already has in their head.

-Austin Scholar, from this episode

flourishing.........

 

We have sold ourselves into a fast-food model of education, and it's impoverishing our spirit and our energies as much as fast food is depleting our physical bodies. . . . human talent is tremendously diverse.  People have very different aptitudes. . . . Human flourishing is not a mechanical process.  It's an organic process. . . . You cannot predict the outcome of human development.  All you can do is create the conditions under which they will begin to flourish,

-Sir Ken Robinson, the link goes to a 2010 TED talk that is well worth watching.

the effects of the effects.....................

 

     In 1963, the UC Santa Barbara ecologist and economist Garrett Hardin proposed his First Law of Ecology: "You can never merely do one thing."  We operate in a world of multiple, overlapping connections, like a web, with many significant, yet obscure and unpredictable, relationships.  He developed second-order thinking into a tool, showing that if you don't consider "the effects of the effects," you can't really claim to be doing any thinking at all.

-Shane Parrish, The Great Mental Models

Beware of the model...................

 

     In France, as it turned out, the actual people (in contrast with the abstract notion of 'The People') wanted justice from their rulers rather than their beheading.  Their aim, if they could be said to have one, was to make customary ways work better for them, not to overthrow them all from the bottom up.  The elite Revolutionaries, though, had other ideas:  those 'customary ways' were obstacles to be swept away, and once that was achieved, a new world would triumph.  It's an old story now, and it usually leads to the same destination: the mass liquidation of those who don't fit the model.

-Paul Kingsnorth, Against the Machine: On the Unmaking of Humanity

messy and complicated................

 

Reality is messy and complicated, so our tendency to simplify it is understandable.  However, if the aim becomes simplification rather than understanding we start to make bad decisions.

-Farnum Street (Shane Parrish), The Great Mental Models

Models.......................

 

But if you follow any modeled data series, you must always keep in mind statistician George E. P. Box's warning: "All models are wrong, but some are useful."       . . .

     Yet we place a great deal of faith in models.  The problem occurs when, as journalist Jonathan V. Last observes, we forget that models are "not a report sent back from the future."  He observes the three types of inputs that go into models:

        1. Stuff we know;

        2.  Stuff we think we know:

        3.  Stuff we have no idea about.

-Barry Ritholtz, How Not to Invest: The Ideas, Numbers, and Behaviors That Destroy Wealth—and How to Avoid Them

filling in........................

We don't live in objective reality, we function in a model of our own construction.  Our brains generate mental outlines, continually filling in missing information to create a 360-degree world within which we operate.  This useful evolutionary trait has allowed the human species to thrive in a world that his hostile to us soft, chewy creatures lacking claws, fangs, or armor.

-Barry Ritholtz, How Not To Invest

except..................................

 He eschewed the spiritual life, except as his human spirit was sustained by nature, jazz, books, wine.  A role model isn't a mentor.

-Anne Lamott, Almost Everything: Notes on Hope

The critical question.......................

 We don't make decisions in a vacuum and we can't get something for nothing.  When making choices, considering consequences can help us avoid future problems.  We must ask ourselves the critical question:  And then what?

-Farnum Street, Great Mental Models Vol. 1:  General Thinking Concepts

Even more snippets.................................

 The innovative success of a market economy does not result from individuals or firms trying to 'optimize' but from their attempts by trial and error to navigate a world of radical uncertainty.  In practice, successful people work out how to cope with and manage uncertainly, not how to optimize.

It makes sense to live our lives under the assumption that physical laws hold and do not change, but it does not make sense to live our lives under the assumption that the world of human affairs is stationary.

In a world characterised by radical uncertainty, there are many things we don't know, even with hindsight.  And others we know only with hindsight.  But since we are reluctant to acknowledge the role that radical uncertainty—and luck—play in human affairs, we apply hindsight anyway.

Good decisions often work out badly, and bad decisions sometimes work out well.

Different people will make different judgments faced with the same information because, given radical uncertainty, many different interpretations of the same data are possible.

Human intelligence is collective intelligence, and that is the source of the extraordinary human economic achievement.

The abject failure of models in the global financial crisis has not dented their popularity among regulators.

Certainty is unattainable and the price of near certainly unaffordable.

-John Kay and Mervyn King,  Radical Uncertainty:  Decision-Making Beyond The Number

About models.................................

 Paul Krugman, who won the Nobel Prize for economics at least in part due to the beauty of his models, once quipped that he thought the data left out of his models might be more important that the data that went in.  It is an explosive and challenging remark, revealing the intrinsic difficulty of models:  they will always be subjective and incomplete representations of complex reality.

-Margeret Heffernan, Uncharted:  How To Navigate The Future

Models, again.............................

 You cannot derive a probability or a forecast or a policy recommendation from a model; the probability is meaningful, the forecast accurate or the policy recommendation well-founded only within the context of the model. . . . And our own experience in economics is that the most common explanation of a surprising result is the someone has made an error.  If finance, economics and business, models will never describe 'the world as it really is'.  Informed judgment will always be required in understanding and interpreting the output of a model and in using it in any large-world situation.

-John Kay and Mervyn King, Radical Uncertainty:  Decision=Making Beyond The Numbers

Got that right...................................

 Sensible - adaptive - public policy and business strategy cannot be determined by quantitative assessments of policies and projects, made by an industry of professional modellers using probabilistic reasoning.  In this book we explain how it is that so many clever people came to believe otherwise - and why they are wrong.

-John Kay and Mervyn King,  Radical Uncertainty:  Decision-Making Beyond The Numbers

Us history majors already knew this..................

But remember what Daniel Kahneman says. “The correct lesson to learn from surprises is that the world is surprising.” . . .

Studying history can feel like intellectual candy that offers no practical use to investors who are paid to foresee the future. But once you accept how fragile our assumptions of the future are, you realize that forecasts are the real fluff and history is where the meat is.

-Morgan Housel, from this post

Mental models, or.........................

..........................................learning how to make better decisions.
 Courtesy of Farnam Street.

Mental models.........................

"Building your latticework is a lifelong project."   Back story here.

The concept of the corporation............

Why did Sloan dislike Drucker’s book so much?  It was certainly not because it was hostile to GM: the overall tone is one of admiration for the company and respect for the men who had built it.  However, Drucker raised questions that Sloan and his colleagues did not wish to discuss, and attempting to bury the book was their response to this challenge.  Professional managers did not derive their power from the ownership of the means of production.  So what gave legitimacy to the power that Sloan and his colleagues exercised?  What was the proper scope, and necessary limits, of that authority?  What defined the social role of the modern, professionally managed corporation?  These were the issues which  Drucker sought to open in The Concept of the Corporation; Sloan’s response was to close the book.

-John Kay, as extracted from this essay

M.I.A..........................................?

In the right relationship between elites and the public, the former acts as exemplars to the latter.  They embody and live out the master narratives.  We can think of George Washington returning to his farm after the Revolution as a striking example.  Abe Lincoln in his childhood log cabin and Tom Edison chasing the perfect filament also fit the type.  It almost didn't matter what these historic figures were like in person:  whether they were lovable or jerks.  The outline of their lives had displayed magnificently admirable traits, and previous generations of Americans agreed with Ortega on the power of exemplarity to raise human life to a higher plane.

The quality that sets the true elites apart -- that bestow authority on their actions and expressions -- isn't power, or wealth, or education, or even persuasiveness.  It's integrity in life and work.  A healthy society is on in which such exemplary types draw the public toward them purely by the force of their example.  Without compulsion, ordinary persons aspire to resemble the extraordinary, not superficially but fundamentally, because they will to partake of superior models of being or doing.  The good society, Ortega concluded, was an "engine of perfection."

-Martin Gurri, The Revolt of the Public

Makes sense...................

But you must also have the ability to adapt to changing circumstances to avoid mistakes both big and small. I like the idea of having strong opinions, weakly held. The whole point of a mental model framework is not to be so rigid that you always do things the same way.

Having a diverse skill set can help make sense of a world that doesn’t make sense most of the time.

-Ben Carlson, as culled from here

Accurate modeling is difficult...................

...............................as is long term investing.  Real estate anyone?