Wednesday, April 03, 2013

My Last Regular Blog Post

I started writing this blog because I just wanted a place to get things off my chest. To me, heaven isn't flow or sensual pleasure, but rather, like what Plato described at going on at his symposiums, discussions about ideas (with beer!). It's fun to figure things out.  Blogging was a good way to relieve that need while not burdening my family, neighbors, or coworkers with discussions on big issues.  I found I liked articulating my thoughts because writing a blog post forced me to clarify my thoughts the way having guests makes one clean one's house: what's acceptable for your own ego isn't acceptable for others.  That has made me a better man.  You write 1600 posts, get two million visitors, and it's a real opportunity to grow.

Yet, as an avocation, it's a costly hobby. I have work and family that creates a large opportunity cost.  Further, it can lead to distrust by colleagues, wary of having their ideas broadcast to everyone.

Only in the past couple of years, I've had an epiphany about my purpose in the world, that what I know is 'enough.'  For decades I was just like this 9-year-old wondering what's important, why do people act like we do, what's my purpose.  Asking why is a big part of wisdom, the difference between simply knowing how and what to do.  Yet, at some point you have to stop asking why because we can't know the ultimate why, and suffice with the motive that something you love appreciates you being a better person (God, family, friends, a dog); perhaps after we shuffle off this mortal coil it will all be explained, which would be nice, but in the meantime if I try to make my dog, daughter, and creator happy by adopting the Nicomachean ethics, I'm probably pretty close to the ultimate truth.  I wish I appreciated more as a young man that ignorance is eternal, and your only duty is to lessen it every day, just as you work on all your virtues (empathy, tolerance, discipline, etc.). I can't figure it all out, but there's a point when you know enough to think your life has a purpose merely being a good mensch, and I'm glad to have figured that out. [editor note: I became a Christian in 2015, so I was clearly understating my existential doubts]

Just like where the Bible has a section on proverbs, I have been collecting favorite quotations, and at first, I tried to keep the list under 100 because I hate those really long lists ("Top 435 movies of all time"). Alas, I found it impossible to keep that list under 100 and so I'm now at 627 or so (see here).  For example, moderation in all things, or the idea that patterns usually don't scale, so communism works in a family but not society, etc. Perhaps most importantly, every argument has a premise, but no premise underlies all arguments, which is why we need lots of aphorisms.

Then there are ideas which often can't be reduced to a simple quote, like statistics, so my list of Essential Life Axioms is somewhere in the thousands.  When did this knowledge achieve critical mass and give me peace? Perhaps a couple of years ago when things finally came together and I thought, I really am comfortable with the stoic guide to life. Things seem to make sense, I should try to empathize with others, do my best at what I do best, and try to be a little better person every day.

My best idea pertains to the risk premium, and I argue this point rather tersely in my book The Missing Risk Premium. A big idea hits the triumvirate of truth, novelty, and importance. It's new (I documented the fact in my 1994 dissertation--which was soundly rejected by all the big minds back then, highlighting it's always a combination of what you know and who you know--I wrote out a novel explanation in 2006, which was pulled into my legal fight, and so it's rather ironic that much of that was predicated on the idea that low vol investing was verboten to me, as if I didn't have prior use and it wasn't public knowledge. The idea is important (much of finance revolves around risk premium, economics is based on a conception of utility maximization I contrast with), and it's true, it explains more of the data:
  • Most asset's don't show a higher average return for higher volatility assets
    • Any plausible risk factor will be correlated with total volatility in general
  • Those few assets that do show a seemingly textbook risk premium never generalize, it's not the covariance that is key (eg, lots of things correlate with the AAA-BBB spread without a return premium).
  • Unlike other explanations, my theory is an equilibrium one, it does not imply it's easy to sell people on higher Sharpe strategies
  • It's more consistent with primate culture and human Universals
  • It's more evolutionarily robust
  • It's got neurological correlates that the standard theory does not
  • Consistent with data on happiness 
 Like most humans, I have lots of decent little ideas too, some better than others, and I think I should focus these more at work. The other big ideas I prefer I cribbed from others, and while I like spreading the gospel sometimes, it's not something that gives me extended satisfaction.

Going forward I might blog once every couple weeks, just out of habit.

I want to say an especially fond farewell to those I've come to know via my blogging, even if it's just a cantankerous pseudonym.  Happiness is multiplied when shared with friends, and a shared worldview that reminds you aren't insane.

Gunga Galunga and thanks for reading.


Berend de Boer said...

Well, this reader hopes it indeed isn't the end of your writing!

Anonymous said...

"Thus, I've become less enamored with trying to change opinions, because ideas need a zeitgeist, and if that's not fertile nothing you say will matter"

Profound insight Falken. Your last book was fantastic. Will miss the regular blog posts.

Nat Stewart

Anonymous said...

You don't have to write big posts, you know. It's the twitter age. Your link to the the chimp TED talk with the two line lead-in is something I wouldn't have found otherwise, yet it fascinated me.

Vic said...

Will very much miss your wisdom.

What if (or rather when) Taleb publishes a new book - where will I turn for witty takedown?

John said...

I've always been a fan. You will be missed.

Anonymous said...

I do not think I've ever left a comment, but it is more than appropriate to let you know how much I've appreciated your writing.

Over time reading this blog has felt like winning the lottery but keeping it secret. I haven't known many people for whom your intellectually diverse subjects would appeal to. This means I haven't really found it easy to share with others. And yet there aren't any remotely comparable blogs out there, so this website will always be a treasure to have.

John Vos said...

Eric, I discovered your blog only quite recently but it’s been a great source of inspiration, and your splendidly sublime post on The Black Swan was even one of the key articles that inspired me to start a blog of my own ( I recognize the nagging feeling: “Does anything I do change anything? Did I ever convince anyone?”
It’s impossible to convince a radical - they are the ones you hear most often from. But there are thousands of people out there who haven’t made up their minds yet, and they just need one sound argument, one solid fact to be persuaded. When they happen to find your blog, they don’t always write back to say thanks, but they are thankful nonetheless. So am I.

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Greg said...

Yours has been my single favourite blog of the last few years, and this last post is a classic example of the genre. Sad to see you cutting down, but good luck with those small ideas.

Dave Pinsen said...

Quite a valedictory post, Eric. Some good nuggets there.

I'll second the anonymous commenter's suggestion about Twitter. If you're not on it yet, give it a shot. It requires much less time commitment, and it's a good medium for sharing short ideas, observations, and links, with a bit of commentary thrown in.

Anonymous said...

booo. blog suicide.
send me the quotes list at least. artvandalays at gmail

Jon said...

Thanks for all the posts - the blog (and books) have made for great reading these past few years.

Stephen Hablinski said...

I have read you daily for about three years now. Thanks for the ideas, Eric.

Anonymous said...

Keep checking in. You will be missed.

Anonymous said...

You had a good run, Eric. Thanks for your work. Looking forward to your papers.

Joyce Matthews said...

I'll join the chorus here in saying thanks and I'll truly miss your regular postings on all subjects.

Anonymous said...

Very sad to hear it. Love reading your posts. I hope you continue, even if in a more limited fashion, or if you just post links to interesting articles you read.

Thanks for your effort and time, it is much appreciated.

Anonymous said...

Best wishes Eric, you have provided a consistently stimulating blog.

Anonymous said...

Eric, thanks for all of your writing over the years. I have truly enjoyed reading your blog, which has made me challenge my own views on more than a few issues. I hope you continue to post from time to time, and as others have pointed out, twitter may be a less time-consuming medium for you. All the best.

Tim O'Brien

Michael Stack said...

i will really miss your writing. Best of luck, I hope you change your mind!

Anonymous said...

Thank you very much for your contributions. I did log in to check my starred google reader items - stuff I liked enough to want to come back to. Your posts were more than half... A few of my favorites:
- Spin-off anomaly
- wittiest sentences I read all year
- Taking offense is not righteous.

Best of luck!

Jessie said...

Internet just died... :)

You should do a top 100 list of interesting books/articles you found over time that made an impact on your life

Just to keep us occupied

GL in life

JoshK said...

Eric, I've really enjoyed your blog and will miss it. You are by far one of the best financie and economics writers out there. And I you have done a great job on topics outside of finance as well and have brought some great insights that affect my thoughts on a personal leve.

FWIW, there's a Jewish saying "at forty for strength and fifty for wisdom".

Anonymous said...

Thank you for the writing that you have done. Your insights, esp. on envy have given me much to ponder.

Best wishes for you future.


Aaron Brown said...

Farewell to the blog. It was always interesting, usually right. I predict you will be back in an evolved form soon.

Anonymous said...

Aw man.

Ben said...

Thank you for writing.

Mercury said...


Clearly this is part of a conspiracy to reallocate my time make myself more productive at work/life and I resent that even though it will probably end up doing me some good.

Sometimes I have felt guilty for inserting my two cents here so frequently but you write about such interesting topics I can’t seem to help myself. Also, it’s a little humbling when another person of a similar age suddenly announces in a businesslike manner that they have attained Wisdom and will henceforth refrain from correcting wrongheaded people on the internet. I’m still trying to perfect a system for organizing and keeping track of my dirty-work, work-work and casual wear socks.

I too would like to petition for the quotations list ( – maybe you could auto-post/tweet one a day for the next couple of years or something. I must say that a complaint I’ve heard quite a bit recently from thinkers and writers I respect run along the lines of: “I feel like I’ve said all that I have to say and I just end up repeating myself and refighting the same old battles etc.” Maybe the medium of the internet accelerates things to that point quicker than otherwise would be the case or has been the case in the past but there seems to be a high correlation between that complaint and the quality of the complainer’s output.

Looking forward to what/whenever you write next.

Thanks for the alpha,


BRM said...

I always fear these somewhat inevitable farewell posts from the independent (non-commercially-affiliated) blogs that I've ready for some time. I regret seeing yours in my RSS feed more than I would most.

Thanks for all the thought provocation you've provided. I hope the additional time you have for other things proves as worthwhile as I'm sure it will.

All the best,

Brian Murphy

AndyinSanDiego said...

I've been reading your blog for about four years now and enjoyed every second of it. I cannot begin to count the times I've quoted your writing to a family member, roommate or friend. Sad to see the blog is slowing down. Best of luck!

Anonymous said...

Thanks for all the entertainment. yours is one of my farvorite blogs.


Michael Meyers said...

Thanks for all your effort in the past... I'll miss you!

Anonymous #5 said...

Thank you for your writing. I'm on the opposite end of the political spectrum from you (and accordingly I'm surely we've never changed our minds about anything) but I've always enjoyed your blog and I really appreciate your reflections on purpose and meaning. Good luck.

S. B. said...

I have lurked here for several years, reading everything but never commenting. I suppose this is what it takes for some of us to come out of the woodwork. I have learned much here, and on many days, the sarcasm in some of your posts brought an audible chuckle from me during an otherwise dull day. I wish you all the best and hope that you'll still continue to post sporadically.

Caste Troll said...

Thanks Eric. I too am among the lucky ones following your blog for the last three years. I have been on a fascinating ride for the last three years and went through a similar philosophical awakening in these years where your blog has provided excellent company. I am appalled how today, mathematics and ideology has replaced philosophy in all economics analysis. Nietzsche's wisdom has been completely shunned and the world is on a giant liberal ride to the next equilibrium which will undoubtedly be chaotic. i guess the bottom line is it is simply Nature at work and it has to do what it has to do, to make sure only the fittest survive. Whatever fittest means today.

Good Luck and Thanks.

Unknown said...

April fool's!

Unknown said...

Really enjoyed your "Regular Blog Posts". Can wait for your "Irregular Blog Posts"!

Anonymous said...

I will miss your blog.

$9,000,000,000 Write Off said...

You got all 3 of my kids into Kumon, so your legacy lives.

$9,000,000,000 Write Off said...

My daughter wanted to add a few words:

It's your fault we are in Kumon. It really helps me, but it's torture.

RB said...

Hi Eric,
I was not familiar with your past posts, so I looked through a few like this one:

In that you say:
" But CO2 is only 0.036% of the atmosphere, and that is only 15% of the greenhouse gasses (water vapor and methane being the most). As humans only produce 2% of the CO2 annually (most is from water evaporation), I think its reasonable to assume that the natural variability of CO2 makes it difficult to assert that human activity is directly causing the temperature increase. After all, historically, you can't really infer from ice core samples whether the CO2 temperature relation is driven by the temperature causing CO2 to rise (say, via a Milkankovitch cycle), or vice versa. Further, there is the natural variability in the other greenhouses gases. "

There are so many errors in this post. Firstly, as we understand it dominant greenhouse effect is due to water vapor in the form of vapor or clouds, but water vapor cannot be a forcing agent because of the reduced lifetime in the atmosphere (a few days) compared to CO2 (which is essentially for centuries and fractionally for millennia). Secondly, I don't understand how water evaporation causes an increase in atmospheric CO2. Thirdly, we know that the CO2 increase is mainly due to human activity by measurement of isotopes. Fourthly, the percentage of CO2 in the atmosphere in no way is representative of its impact just as inhaling an mG of cyanide is not a good idea. Fifthly, you seem to have some erroneous views on optical depth. I recommend reading this entire series:
So, you are right that "people can't help but let their higher preferences guide this weighting" and this statement comes to mind:
"Public intellectuals mainly project their deepest flaws onto others. "

BTW,I bought your book and it has some interesting ideas. Cheers for your blog-retirement!

Anonymous said...

I have enjoyed reading your thoughts; especially on greed versus envy which is an area of interest to me. You have helped provide needed rigor to my thinking.

Unanimous said...

I enjoy your posts - very thoughtful and full of insight. It's a pitty that you are cutting back, but I will certainly continue to check in hopes of more gems.

There's another blog "Interfuidity", which only has new posts once every two to four weeks, but they are usually worth waiting for, and it has a significant following. Hopefully you'll feel the urge every now and then to post when a suitable thought takes hold.

Possibly I think your views on status and people comparing themselves to other people are even more significant than you do. You've got to the heart I think of why groups aren't just a bunch of individuals. Groups function in ways that do not average out or sum the behaviour of the individuals in the group, and it's due to individuals copying what other individuals do.

It seems to explain the very skewed income and geographical distributions that we have. Everyone wants to be watching the same movies, living in close proximity to each other, renovating their houses in similar styles as other people. This focusses demand in a chaotic way onto particular products and locations, and results in some people doing massively well while most people don't.

It's almost enough to convince me to become a socialist. Possibly you'll get me there with a few more posts.

Anonymous said...

Well - i want to say thank you.

It was always an inspiring pleasure to to take a look at your blog!

Greetings from Germany.


Anonymous said...

I hope the posts just will change from regular to irrelgular.

Irregular is fine for me.