A Premium for Negative Skew?

Xiong, Idzorek, and Ibbotson have a new paper coming out in the JPM showing that mutual funds with the highest tail risk (ie, highest probability of extreme downside returns) have higher returns. That is, there's a positive risk premium to negative skew. This is rather curious.

The only thing I saw in this field related to this found the opposite. That is, in a 2006 JoF paper, Kosowski, Timmermann, and Wermers, and White bootstrapped the alphas of the entire universe of U.S. domestic equity mutual funds, and found that the top decile had much more positive skewness than the median. The bottom decile had more negative skewness.

 I don't have the data, but it can't be consistent with both findings.

Models aren't Optional

Models get a bad break, and the key is remembering the golden mean: moderation in all things. Macroeconomics, String Theory, Climate studies, all produce highly complicated models that are presented by our best academics as being thoroughly vetted and informative. Yet, for predictions in the real world, they stink. This leads to people saying models are all garbage, and we should all be engineers. Clearly a bad model is worse than no model, but if you are operating in some domain, you have implicitly or explicitly, a model of that domain. in this way, it's simply nice to write it down as clearly as possible to better understand what you are doing.

 I came across the The Good Regulator theorem (1970) by Roger Conant and Ross Ashby. It is stated "Every Good Regulator of a system must be a model of that system".

the theorem shows that, in a very wide class (specified in the proof of the theorem), success in regulation implies that a sufficiently similar model must have been built, whether it was done explicitly, or simply developed as the regulator was improved. Thus the would-be model-maker now has a rigorous theorem to justify his work.

I don't really follow the proof, but I think it's definitely true that to regulate something well, you need a good model of that something. 

UK Austerity in the 19th Century

I was watching Bloggingheads.tv, where Mark Blyth noted that contra Rogoff and Reinhart, Great Britain had a very high debt/gdp ratio at the beginning of the 19th century and then proceeded to have one of the best centuries of absolute growth in the history of civilization.  Thus, debt is, if anything, salutary at really high levels, so the government should run higher deficits, etc.  I've heard this argument quite a bit.  See this chart from Wikipedia:

It peaks after the Napoleonic wars at 250%, well above the 90% number everyone has been talking about in the US. Note the clear decline in debt from Waterloo to World War 1.  This is because the government started to perpetually run a surplus (see chart below, taken from here).

After the big wars, they would run surpluses regardless of the business cycle.  So, was the prosperity from 1815-1914 caused by the debt in 1815, or the subsequent surpluses?  Given the debt was used to make war, I don't think we can say it funded the public goods like roads that then generated 1000% returns.

I like Kevin Williamson's argument that the US is bound to default, and that's a good thing.  Increasing the state doesn't create prosperity, rather, it first takes people out of the productive sector, then increases resentment because people given housing vouchers or make-work jobs know they are low status, undeserving relative to a billion other souls in the world.  Better to let people find their way by getting out of the way.

Daniel and Moskowitz on Momentum

A pretty good take on momentum that I hadn't seen (from 2011) here.

Momentum is strong: in US equities, where this investigation is focused, we see an average annualized return difference between the top and bottom momentum deciles of 16.5%/year, and an annualized Sharpe ratio of 0.82 (Post-WWII, through 2008). This strategy's beta over this period was -0.125, and it's correlation with the Fama and French (1992) value factor was strongly negative. ... 

In our 1927-2010 sample, the two worst months for the aforementioned momentum strategy are consecutive: July and August of 1932. Over this short period, the past-loser decile portfolio returned 236%, while the past-winner decile saw a gain of only 30%. In a more recent crash, over the three-month period from March-May of 2009, the past-loser decile rose by 156%, while the decile of past winners portfolio gained only 6.5%.

Immigration and Parfit's Repugnant Conclusion

It looks like immigration reform will eventually grant amnesty to 10 million or so people, in the process encouraging more illegal immigration.  I differ with my libertarian friends on this, as I would restrict immigration to those with high skills, like what those evil Canadians do.

An essential reference for this argument is Derek Parfit's Repugnant Conclusion.  He notes that it seems inevitable ethicists will prefer billions of people barely subsisting to having a mere million people living the epitome of the good life.  That is, the chart below shows the quality of life on the y-axis, the quantity on the x. There will always be a wide and short alternative that dominates the present, and thus, in the limit we will by moral choice have 100 billion humans living like wild dogs.

 How can this be?  Well consider the following.  Say population A contains 1 million people living with an average gdp/capita of $30k/year.  Then look at A+, which has that population plus 1 million more earning $20k/year.  Clearly, A+ dominates A, because it's just the same thing plus more people, each of whom is presumably happy to be alive.  But then, B has 2 million people making $25k/year.  This has to dominate A+, because its the same average and total prosperity, plus greater equality.  Thus, B, with more and poorer people, dominates A via transitivity.  On can extend this ad infinitum, so basically Haiti writ large dominates Iceland or anywhere.

Low Vol Strategies Crushed in May

Low volatility had a bad month in May, and there has been a slew of commentary on this.  See Abnormal Returns here for a bunch of links.

Deutsche Bank's 'The Quant View' by Rochester Cahan summarized the month's performance by noting  that

 'Last month we argued that the Low Volatility/High Dividend Yield trade was looking crowded, and cautioned that this could indicate elevated downside risk. It turns out that call was prescient.' 

"Could" and "change in probability" means nothing, because it's consistent with anything, eg, if the rate rises it's hardly testable because the old and new probability are couched merely as possibilities, and if the probability doesn't change, that's in the forecast too ('could').  Now if they said, don't buy or short strategy X this month, that would have been prescient.  I wonder if such people realize how disingenuous this is, or if they think their nuance is actually highly rigorous analysis.

In any case, last month was very bad for low volatility strategies, leading many researchers to reassess the validity of this approach.  But, to put it in perspective, here's the total return over the past 12 months, using my beta data.

Clearly the past year, higher beta has been the better place to be, while lower beta has not.  As the SP500 rose 26% from May 31 2012 through May 31 2013, this is not surprising: on average, over shorter horizons like years, betas are accurate, so higher beta stocks do better in rising markets, lower beta portfolios underperform. For example, over the past year, given the SP500 rose 26%, low beta stocks rose 70% of that, high beta 170% of that, implying betas of 0.7 and 1.7, which is totally consistent with the simple CAPM for the high beta stocks, and better-than-expected for the low beta portfolio (ie, its beta was 0.6 in that period).  If you bought low vol stocks not understanding this, well, you really need to.

Now, many people seem to infer from this that low vol/beta has been a bad bet over the past year. If you evaluate yourself purely against the indices, this is true: deviations from the benchmark are only good if they are above the benchmark.  Yet, in simple Sharpe ratio or Information ratio, high beta portfolio did poorly, even in this period.  The clear winner is actually a Beta-1.0 portfolio, which has the highest Sharpe and Information ratio.  Like low volatility, I have championed the beta 1.0 portfolio for a while, and I'm sure it will be a big fund someday.

Stats on US Portfolios, 5/31/12-5/31/13

Stats on International Portfolios, 5/31/12-5/31/13

Internationally we see the same thing: low vol did worse in raw returns, but much better in a pure Sharpe.

See data here.  I think this highlights a profound truth, that as a practical matter investors don't care about Sharpe ratios as much as returns relative to the benchmark.

Bring on Silva vs. Hendricks

I'm a big Johny Hendricks (left) fan, but I think right now among 170 pounders, Erick Silva is the man, Hendricks next, then GSP. Just watch him sneak this triangle choke onto his opponent from last weekend's UFC in Brazil. I couldn't believe Silva didn't fall off because he was so high, but Silva obviously has great leg control.  Standing, Silva moves like a cat, and I can't wait until he meets Hendricks after Hendricks beats GSP.

Kahneman Fast and Loose

There's a short Danny Kahneman interview at the Daily Beast here.  He notes why your best friends may not be your best advisors:

Friends are sometimes a big help when they share your feelings. In the context of decisions, the friends who will serve you best are those who understand your feelings but are not overly impressed by them. 

 That's the Kahneman I love to read, profound and interesting. But then he follows with this sentence:

For example, one important source of bad decisions is loss aversion, by which we put far more weight on what we may lose than on what we may gain. 

I don't see loss aversion as being nearly as prevalent as lottery-loving: that is, picking things with small probabilities of big gains, as opposed to avoiding things with potentially large losses.  Most really bad investments, those with the lowest expected returns, are things with large potential losses (lottery tickets, horse races, highly volatile stocks, options, penny stocks, etc.)  This means people don't avoid them too much, rather, they prefer them too much.

But that's only one class of bad investments with large losses.  Then there's picking up pennies in front of a steam roller, the kind of trade Kahneman's good friend Nassim Taleb argues is too common, where one basically sells insurance or options too cheap, making money most of the time but then occasionally blowing up and moving on to the next sucker.  Kahneman seems highly respectful of Taleb's work, and neither try and reconcile these ideas, even though they are really at the top for both.  That makes them more like interesting magazine writers (eg, Carl Zimmer, John Horgan) than scientists.

Loss aversion in practice is a curiosity, not common in its domain relative to riffs on its opposite.  I think people who love quoting him merely because once you allow irrationality in equilibrium, you are no longer constrained, and Kahneman gives one the authority to do this.  So, as much as I enjoy many things he says, I'd say he has been an enabler of sloppy thinking, net net.

Yale Emotion Research Videos

Yale has a neat website with interviews with people doing research in affect, or moods, and how it affects us.  There are interviews with Steve Pinker, Jon Haidt, and Dan Gilbert among others, though I already have heard from those guys, so I like the other videos.

For example, Gerald Clore argues that negative moods generate more analytic reasoning. Difficult problems generate negative affect, a reason why people do not like to 'think hard', and why trouble and depression can be a positive feedback loop.

American educator John Dewey said you don't learn anything unless you reach a problem, where reality says 'no, do something new.' Positive affect tells your brain, 'you are going in a good direction, and so have no reason to change stream.'  As it's improbable we have it all figured out as a child, one should expect periods of lugubrious contemplation because that's the only way you'll really grow. Another reason for moderation in all things (clearly, no one wants to be dyspeptic all the time), a little more Adagio for Strings and less The Magic Flute.

Another great clip was by Cosmides and Tooby on the grammar of human arguments, which invariably are about costs, benefits, and mental states.  Anger is usually triggered by the perception that someone is putting too little weight on your welfare given your relationship. People get angry when they think they were harmed for little comparable benefit, as if they were merely a pawn sacrificed for some more valuable piece.

I remember being quite angry during my litigation in part because many acquaintances who could have helped me a great deal chose not too, presumably because they valued the option for a lottery ticket in dealing with an uber-wealthy guy (or avoiding his negative lottery ticket) higher than helping me, so I got very little help (eg, innumerable facts needed attesting in court by experts, such as that mean variance optimization was not close to Telluride's IP, or simple unwritten rules in IP litigation that experienced people know).

If you understand the roots of your frustration, it's less frustrating.

More Benefits from Overconfidence

Overconfidence may cause people to invest too much in volatile stocks because such stocks have a greater diversity of beliefs, and so if people dismiss the objectively bad odds of beating the market, such people will be drawn to stocks where they are in the extremum, and highly volatile stocks have the most biased extremums.  One might think these people are irrational, but in the big picture people with this bias actually have a huge advantage, why Danny Kahneman said it's the bias he most wants his children to have.

Two economists at Washington State University looked at twitter accounts for sports prognosticators and found that confidence was much more important than accuracy in generating followers. Their sad conclusion: Pundits have a false sense of confidence because that's what the public, seeking to avoid the stress of uncertainty, craves. In other words, to be popular (read: successful), you need to be unwarrantedly confident. This takes either an amoral cognitive dissonance or ignorance.

 In an separate study, two psychologists found that people were introduced to strangers and then asked what the other person thought of them. Those expressing more confidence about their interaction later (not how well they did, but how confident they were in how well they did), generally made a better first impression as rated by the other person.

It's hard for me to accept that life is like dancing, where it's just as important to be skilled and show no self-consciousness.  Supreme self-confidence is attractive in almost every important dimension: punditry, sex, sales--just not investing.  It's surprising there aren't more bubbles.
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There's a reality TV show on restaurants, and it exposed a married couple who ran one restaurant as being especially wicked and incompetent (Amy's Baking Company).  The owners responded to complaints on Facebook and showed the world what insolent, self-absorbed idiots they were.  Of course, the popularity of this PR disaster has translated into a big success, as supposedly a new reality TV show based on the company is in the works.

It's good for regular people to learn through experience that famous people are often jerks or stupid.  Perhaps then we will stop listening to their opinions on world events.
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So, some very high powered evolutionary psychologists (eg, Cosmides and Tooby) found that

Over human evolutionary history, upper-body strength has been a major component of fighting ability. Evolutionary models of animal conflict predict that actors with greater fighting ability will more actively attempt to acquire or defend resources than less formidable contestants will....Among men of lower socioeconomic status (SES), strength predicted increased support for redistribution; among men of higher SES, strength predicted increased opposition to redistribution.

That jibes with my observation. I guess I'm in the high SES group, generally, and among my weight lifting buddies, I'd say the vast majority are against redistribution policies, much more so than for my neighbors who come from the same demographic.

I'd like to think I believe in a smaller welfare state because it's truly the best policy, but maybe I'm just rationalizing self-interest. I think I'm not doing this, but then again, the guy writing this is right now is, in Jonathan Haidt/Michael Gazzaniga's view, just the narrator, the press secretary, of the 'real me', this illiterate part of my brain that has desires and beliefs at one of those Inception-like levels, where I think I'm objectively determining my beliefs, but instead I'm rationalizing a rationalization of a rationalization.

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If you are worried about the state of macro economics, don't worry, because it's all good.  Some New York Fed economists find that a particular DSGE model predicted the 2008 fiasco just about perfectly.

This is all 'out of sample', in the same way the test data for neural nets is out-of-sample: if you exclude all the hundreds of functional forms that were tried that didn't work, one of them was fit to only prior data and predicted the out-of-sample data. That is, the projection from 2008 is being done in 2013.  The degrees of freedom in this model would make a technical analyst blush. I can understand the allure of this approach (economics is about modeling), but anyone who has been around a while should cop to the patent overfitting that goes on 'outside the model'. I would bet anyone that if they set this model up in real time, it will miss the next turning point...and there will be another DSGE model that would have worked.  

A Survey of Low Volatility Theories

David Blitz and Pim van Vliet, both of Robeco, and yours truly wrote a paper outlining the various explanations for the low volatility effect, Explanations for the Volatility Effect: An Overview Based on the CAPM Assumptions. The aim wasn't to trash or champion any particular approach, though I'm sure our biases show (we aren't in lock-step on this, note Blitz here vs. my approach here, which has a subtle distinction).  As most papers on the low volatility focus on the data, often with very different motivations, we thought a paper addressing these various theories would be helpful.

In any case, we go over the following explanations:

• Leverage constraints
• Regulatory constraints
• Constraints on short-selling
• Relative utility
• Agents maximize option value
• Preference for skewness
• Crash-aversion
• one-period model
• Attention-grabbing stocks
• Representativeness bias
• Mental accounting

If you are new to the literature I think its very helpful, because it has lots of references on seminal articles in the various threads, and you should be aware of what the various theories argue. As Nietzsche said, if you know the why, the how is infinitely bearable.  

Is Low Vol Overbought?

Robeco's Pim van Vliet on whether low-volatility stocks are expensive:



Basically, he says that looking P/E ratios they are slightly expensive. His low vol fund has a P/E ratio similar to the average, but on a dividend rate, it's actually cheaper.

He argues that low volatility stocks have predictable performance based on valuation, so in today's trendy environment, it pays to have a nuanced approach.
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Value and Momentum Everywhere by Asness, Moskowitz, and Pedersen just came out in the Journal of Finance, 4 years after appearing on the SSRN. It's a great paper highlighting two important factors for any equity investor. Indeed, I'd surely have it on the reading required reading list for anyone in the business, alongside classics on value via Fama and French's 1992 paper, and Jegadeesh and Titman's 10 year retrospective on momentum.

An interesting argument is that value and momentum are, well, everywhere: currencies, country bonds, commodities, and of course, equities.  This suggests that, if you are a long-short investor (ie, zero beta to the index), you should really go broad when you are implementing these strategies.
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Then there's Pension Portfolio Choice and Peer Envy, also just published, which was Jacqueline Wise's dissertation back in 2006 or so (see pic right). She does a good job of discussing envy in investing, the theme of my book. She references the usual suspects in this space: Duesenberry (1949), Abel (1990), Gali (1994). I'm surprised she didn't mention DeMarzo, Kaniel and Kremer.

Her model generates the following result that I too find, namely that equity allocations are identical when people are envious.  She also finds situations where this equilibrium implies a higher equity allocation than in the base case. I would think, if you took this further, you would find that when trendy risky investments become popular, their expected return is actually negative.

The paper stops short of the bigger implication: there is no risk premium in such a world.  Further, if 'everyone' is buying a specific asset, it's expected return can be significantly negative in equilibrium.  Instead, she suggests that investors preferences can be materially different when looking at pension plans. True, but she could be stronger.

This reminds me of Feynman's explanation for why the mass of the election was constantly revised upward over decades after Robert Millikan's initial estimate:

Millikan measured the charge on an electron by an experiment with falling oil drops, and got an answer which we now know not to be quite right. It's a little bit off because he had the incorrect value for the viscosity of air. It's interesting to look at the history of measurements of the charge of an electron, after Millikan. If you plot them as a function of time, you find that one is a little bit bigger than Millikan's, and the next one's a little bit bigger than that, and the next one's a little bit bigger than that, until finally they settle down to a number which is higher.

Similarly, people find piecemeal application of envy relevant, but currently aren't going 'all-in' because it's too large a change from the consensus.  Instead, it simply explains little things, more and more little things. If you believe it's the truth, the benefit is that you will get to see more agreement over time, which is fun.
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Speaking of envy, Steve Wisdom points me to this observation on the Stockholm riots, another piecemeal application.  Immigrants aren't happy, but not because they aren't doing well in absolute terms, just that relatively, things are not so good:

[Swedish immigrant] finds it hard to be as thankful as his parents still are to his adopted homeland. "They compare it to Baghdad or Somalia," he said. "But we younger immigrants only really know Sweden, and we just compare our situation to the one around us."

So remember that. Immigrants today are happy for their change in situation. They children won't be so grateful if they stay in the underclass, and will vote to redistribute accordingly. That's why I'm not a big fan of the always-interesting Bryan Caplan's call for unrestricted immigration.
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BTW, if you think you're smart, see if you can tell which way the bars move in this video, a test of which generates a 60% correlation with IQ, higher than that for reaction times (40%).  It seems like a quick and easy way to administer IQ tests without worrying about cultural bias. If you're really smart, you'll understand that it's not a perfect predictor of IQ, or wisdom, so don't tell me about how this test is stupid because you are smart and don't do well on this test, because a smart person wouldn't make that argument.

Speaking of taboo topics, there's a big brouhaha for hedge fund billionaire Paul Tudor Jones after he mentioned, in a untaped supposedly off-the-record seminar, that women are underrepresented from 'macro trading' because children tend to divert their focus. Now, in many professions there are stark gender disparities and a strange thing in our times is that if one publically states this could be somewhat 'natural' all hell breaks loose.  This is the kind of thing that makes us moderns idiots, where any really public person can't say truthful important things if they violate the axiom of equality (ie, all human demographics have exactly equal innate preferences and abilities for any activity conceivable).

In Isaac Newton's day, his big secret was that he believed the Trinity wasn't true, and he had to pretend it was true to save his job.  That's a pretty small concession, practically, compared to the PC taboos of today.

 As a practical example, among the several good changes they've made to wrestling to get it back into the olympics (Please vote to save wrestling here!) was to increase the number of women's weight classes at the expense of men's weight classes.   There are at least 100 boys wrestling for every girl, why give them anything close to equal representation? Because it pleases some outsider's sense of fairness? Presumably, women like to wrestle as much as men, they just don't because of cultural norms  This is absurd.

RAFI's Low Vol, My Winning Lotto Ticket

Research Affiliates (RAFI) suggests that you can dominate simple low volatility portfolios by blending them with some fundamental metrics.  Specifically, value, cash-flow, dividends, and sales, combined into a 'fundamental value' metric, generates a 200 basis point return premium that can carry over into the low beta portfolio, all while generating 25% lower volatility. These are reasonable expectations.

I'm skeptical that dividends and sales add to the Sharpe ratio of this approach, but hey, at least it's four factors, not 40.  One of the bigger opportunities here is that  low volatility, is  correlated with other metrics associated with higher returns like higher cash flow, value, low probability of default, etc. That is, it's like if small cap stocks had low betas, then clearly one should merge the two factors because they both are good selection criteria.

But then, it's easy to reach too far, and much value destruction comes from trading too much, overfitting, and that's what this kind of approach encourages. So, it takes great discipline trying to improve the low volatility approach whilst not overdoing it. The 200 basis point bogey suggests RAFI has realistic expectations.

In this video, Fiefie Li (right) notes two reasons for the low volatility attractiveness.  First, Asness, Frazzini and Pedersen's leverage constrained investors. Second, her paper Agency and Institutional Investment, with Michael Brennan and Cheng on delegated investors maximizing excess (ie relative) returns.  Both papers suggests irrational rules of thumb create incentives for massive misallocations of capital, which implies selling low volatility funds should be a piece of cake.

Interestingly, Li taught at UC Irvine, the same place Harin de Silva of Analytic Investors got his PhD, and also low volatility maven Bob Haugen.  I would think this is a good place to look for personnel to help with low volatility.

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I bought a Powerball ticket for the $500MM lottery last Saturday, and was actually interviewed by a local TV crew when I bought my one ticket, and said something to the effect that $2 buys me several minutes of daydreams about buying ridiculous things (that $100k lake submarine in SkyMall magazine).  Later I discovered a better reason for my purchase. In the many-worlds interpretation of quantum mechanics, every quantum event happens. It's basically the only way many can reconcile the EPR paradox or Schrodinger's cat being alive and dead. All possible alternative histories and futures are real, each representing an actual "world" or "universe". Therefore, after buying that ticket, I actually won the $500MM jackpot in many of those universes. Unfortunately, in this particular universe I did not win the lottery, but, I can take comfort that many of 'me' did win, and my utility function somewhere among those universes is insanely high. For some reason, I'm not enjoying that as much as I should based on the math.

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A neat paper highlights that married couples have higher divorce rates when the woman earns more than the man. Interestingly  the hypothesis the authors give for this is 'gender identity', the idea that men and women think a man works outside the home, the woman inside, and there's a cost to deviating from this norm.  They never try to motivate why men and women might think that's a good way to frame things. That strikes me as rather hollow, a patently arbitrary tradition that makes  couples seem like stupid ciphers of sociological tides.

I think it's definitely true that men like women who make money, just not more than what they do, similar to what men say about intelligence (in speed dating surveys, men like their women smart, just not smarter).  I also think women feel their man is not as dominant, and thus less masculine, when they earn more than him, related to research showing women have more orgasms with wealthier men.  In either case, this highlights people are social animals, and so they don't maximize 'absolute wealth' but rather, something more contextual, which is often highly correlated with absolute wealth.

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It was a good week in wrestling, as the US hosted a match against Russia and Iran in New York City. While the US beat Russia pretty handily, and got killed by Iran, they had different teams for each match so it's kind of hard to compare Iran vs. Russia. I'm really excited by the young US wrestlers that won, especially Dake, Taylor, and Stieber.   Also, the international wrestling body elected a new president from Serbia, and hopefully he will be more effective than the last guy, who reportedly thought that wrestling was old enough to not need lobbying at the Olympics--wrong!  The first thing he did was implement new rules, most importantly, a cumulative score for the whole match, 2 points for a takedown, and two three minute periods.

Weekly Roundup

Jon Vol sent me a little email saying he has a blog post on Taleb, and that it got picked up by a Taleb fansite, where at the bottom it is classified as "Filed Haters || Tagged Falkenstein." I'm not just a Hater, but rather, a type that can be applied to others! I wonder what our distinguishing characteristic is in their eyes?

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 “Pride gets no pleasure out of having something, only out of having more of it than the next man.” C S Lewis, Mere Christianity 

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 Now that wrestling is trying to get back into the Olympics, they are considering getting rid of singlets! I'd say, it's about time. Singlets simply aren't cool, and if high school kids suited up like cage-fighters I think the sport would be more popular.

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 Heritage's dismissal of Jason Richwine is pretty rich indeed. To recap, he coauthored a study critical of immigration, basically saying that the new immigrants from Mexico would receive more benefits than generate in taxes. Someone looked up his 2009 dissertation, and it had the racy title 'IQ and Immigration Policy.'

 It's truly a taboo topic, as demonstrated by his Harvard thesis adviser and famous labor economist George Borjas saying 'I have never worked on anything even remotely related to IQ, so don’t really know what to think about the relation between IQ, immigration, etc.' The NLS panel data that Borjas studies all the time has an IQ proxy (AFQT) in there that is highly powerful in regressions, and he has to know this. He also knows that the subject is not good for one's career, so I understand why he has trained his mind to not think about it, but it's surely an elephant in the room.

 Interestingly, Edward Miller writes a lot about race and IQ, which is probably why he spent his career in an academic backwater. His seminal 1977 piece Risk, Uncertain and Difference of Opinion was really the first paper giving a theory as to why risk and return are inversely correlated, and was the first person to state in a journal one should invest in low beta/volatility stocks for this reason.

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If you can read Dutch, there's a new review of my book The Missing Risk Premium out there in a CFA magazine. I can copy, paste into a translator, and get a broken English translation that is good enough.

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Weekly Roundup

If any of you are puzzled by the low inflation rate, consider that in 2005, the Fed convinced themselves that house prices weren't in a bubble because a hedonically adjusted housing price index showed little movement. Sort of like our consumer price indices.  From a Federal Reserve meeting that focused on home price appreciation circa 2005:

For example, over the four years from 2000 to 2004, the OFHEO index increased at a compound annual rate of 8.2 percent, while the constant-quality index increased at a 5.4 percent annual rate. As shown in exhibit 4, the current ratio of price over median family income derived from these two indexes is vastly different. If the OFHEO index is giving an accurate picture of what is happening to home prices, I think one could say with some confidence that prices have been bid up to unsustainable levels. However, if the constant-quality index is a better reflection of reality, home prices actually look somewhat low relative to median family income, particularly compared to the late 1970s. I believe the constant quality index provides a more accurate indication of what is happening to the price of a typical single-family home. In contrast, the OFHEO index is subject to upward biases that accumulate over time and distort ratios such as price-to-income and income-to-rents.

Clearly, that real estate adjustment wasn't helpful. Perhaps our current CPI is similarly biased? That is, if you used 1990's CPI methodology, inflation would be around 5%, and using 1980's, it would be 10% (see here). Were we wrong then, or now?
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Joseph Stiglitz has the following take-away from current events:

The big lesson that this crisis forcibly brought home—one we should have long known—is that economies are not necessarily efficient, stable or self-correcting.

Gee, that's what the latest data say? He has been saying that since he edited Samuelson's papers in 1970: markets are not efficient.  His life's work has been on that theme, as his Greenwald-Stiglitz theorem posits market failure as the norm, and his Sappington-Stiglitz theorem suggests that an ideal government could do better running an enterprise itself than it could through privatization.

I've never seen him seriously address government failure, other than the stupidity of IMF personnel, who he noted were rarely top students from Harvard, Oxford, or Princeton. If he thinks second-rate Yalies have negative productivity, what about your typical bureaucrat?

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Niall Ferguson's remark that Keynes's childlessness influenced his dismissive perspective on the long run created quite a firestorm, including a rather pathetic apology that will only encourage his enemies.  I remember reading a Keynes biography around 1988 and the author's theme was that homosexuality was the key to why Keynes thought 'outside the box.'  I personally doubt his homosexuality was so tenuously related to his economics it's hardly worth much thought, though perhaps it would rise to be worthy of an aside at a luncheon.

Diversity is supposedly this great thing because various minorities have different perspectives, why demographics have systematic predilections towards various parties and issues.  It seems a matter of pure logic to accept that if  different backgrounds can generate positive attributes, some could be negative, but if you ever say that you are a bigot.

I'm not anti-gay, and sympathize with their uniquely difficult coming out issues.  Yet, I'm not sympathetic to the idea that if one asserts any negative consequence of being gay, it's homophobia. I see this as an example of the Left showing its power and making sure that issues it categorizes as taboo stay taboo.
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The latest low volatility continue to show the benefits of low volatility this year.

Any way one would make a low vol portfolio--volatility, minimum variance algorithm, beta--generates the same results. See betaarbitrage.com for the data.

Asness, Frazzini and Pedersen have an important paper countering Ronnie Shah of Dimensional's assertion that low volatility is an industry result. It isn't.

Kevin Simler has some thoughts on the economics of status.  He basically argues it's very important and omnipresent. Never mentions the effect on risk premia, though I expect he wouldn't go that far.    That is, status seeking is accepted by economists at explaining parochial things, but somehow it disappears when it comes to addressing risk premiums, or welfare analysis.

Einstein Rebuked

Interesting take on a cliche:

I once read that the definition of insanity is doing the same thing over and over and expecting different results. I fundamentally disagree with this idea. I think that doing the same thing over and over and expecting different results is the definition of hope. ~Debbie Millman

As someone who does the same thing most days, often coming up with nothing, I find this interpretation a real breakthrough.
...
I've been reading a lot of Jaak Panksepp who studies 'affective neuroscience', the biology of emotions like rage, fear, lust, care, panic, grief, and play.  He's famous for documenting when rats laugh via  inaudible chirps that correspond to tickling and the appropriate brain scan signatures. Lots of mammals have the same emotions humans do, which should come as no surprise to dog owners. He notes that he purpose of play is to takes us to the point of bad things happening, which explains why my kids always seem to end play with someone crying. He sees an instinct for seeking social interaction that turns on once the stronger affects (fear, lust, rage) as well as hunger are in check. It's useful to have an instinct to seek novelty and company, and it appears this is hard-wired.  If you take too much opiates, or are autistic, this instinct is stifled.
....
As for the Rienhart and Rogoff brouhaha, I don't see the big deal given our total debt-to-GDP ratio is like 500% if you include Social Security, Medicare, and Medicaid. The fact that 90% isn't a hard tipping point is irrelevant, we are way past that. Further, given we have been running a Federal deficit above 5% of GDP since 2009 every year, the idea that this R and R research has caused great austerity implies a novel definition of austerity.
 ...
I'm sympathetic to Barry Schwartz's admonition that we should satisfice more as a rule: optimizing too much leads to feeling bad about alternatives that are pretty similar. A lot in life is random, so if in picking a college or career you keep wondering 'what if?' you will be less happy and it's unhelpful because generally things you chose among were pretty similar. I think it's a very interesting question how and when to constrain choices you present others: too much choice is onerous, but more choice can better fit someone's unknown preferences. Unfortunately, those skeptical of the market seem drawn to think regulation could be of big help here; I think it's far better to leave such choices to those with skin in the game and a knowledge of the customers.  That is, bureaucrats will often think more than 3 of something they don't care about is enough, because for them it is, but that's a very silly inference. The Bloggingheads discussion is below:

Weekly Roundup

Cliff Asness: An hour interview with Cliff Asness.

 It would be hard to improve upon Cliff's Big 4 Investment Principles:

1. Cheap stocks beat expensive stocks 
2. High carry beats low carry 
3. Low risk beats high risk 
4. The trend is your friend

I would just add that, 'risk' doesn't really help understand these principles, because while you can tell a risk story for #1 and #2 they generally seem characteristics more than covariances, for #3 it goes the wrong way, and #4 it doesn't really seem relevant.

Cliff also riffs on a hot new value metric, based on a paper by Robert Novy-Marx highlighting profit margin.

Sex and Envy: Tim Wadsworth at the University of Colorado Boulder finds that

 “There’s an overall increase in sense of well-being that comes with engaging in sex more frequently, but there’s also this relative aspect to it,” he said. “Having more sex makes us happy, but thinking that we are having more sex than other people makes us even happier.” 

Keeping-up-with-the-Joneses in bed. It's not much removed from my sons, whose misery is most affected by knowledge their brother can do something they can't. Wadsworth notes that regardless of the adjective--attractive, funny, smart, poor--these are only meaningful in a relative sense to peers, and so being sexually active only makes sense relative to others.

Random

The Missing Risk Premium is a quick read, but if you really have no time, here's a 120 page PowerPoint highlighting many of its main arguments.

Here's a paper in the JFE by Cao and Han finding that total variance generates lower-than-average returns, in this case, in option markets. Selling the highest volatility options generates a higher positive return over time. Clearly, this is risky, but so is buying volatility. I think this is best explained as another example of lottery ticket preferences, people love to overpay for 100-1 longshots.

Charles Gallistel argues that the essence of calculation is read-write capability, and currently neurologists have no understanding of the physical basis of memory.  His book is here.  That is, "fire together/wire together", something we do know about neuronal synapses, doesn't lead to storing sums in any obvious way, though this seems to be happening in things from bees and ants to people. Once we figure this out, I think database architecture will undergo a quantum leap in productivity, though perhaps we never will. 

My Favorite Quotes

OK, one day into blogging retirement and I'm posting, but some asked in the comments for the quote list I mentioned, which I thought I'd share. As all arguments need a premise, and no premise holds for all arguments, this highlights we need to know a lot of aphorisms to be wise.

I know I'm missing hundreds more good ones, and some here are much better than others. That is, 'moderation in all things' is highly profound. In contrast, I don't agree that "Genius is only a greater aptitude for patience", but I do think patience is really important, so I like that quote. Then there's "To generalize is to be an idiot", which I think is just wrong, but I find it fascinating that a thoughtful person thinks this is true.

Most quotes without attribution I merely forgot where I read them, or they are a paraphrase of someone, or a mishmash of several authors.  I suppose one could google them and get a hit rate of 50%.

1. You rarely find a nonconformist who goes it alone  ~ Hoffer
2. A beautiful proof should appear inevitable, succinct, and unexpected.  ~ Hardy
3. A boy becomes an adult three years before his parents think he does, and about two years after he thinks he does  ~ General Lewis Hershey
4. A child’s goal is not to be a successful adult but a successful child.  ~
5. A feature of government must be judged good when for a given purpose it uses the force of convention instead of physical force and its evil chances.  ~ Barzun  
6. A gaffe is when a politician speaks the truth.  ~ Michael Kinsley 
7. A healthy appetite for righteousness, kept in due control by good manners, is an excellent thing; but to 'hunger and thirst' after it is often merely a symptom of spiritual diabetes.  ~ Charlie D. Broad
8. A knowledgeable fool is a greater fool than an ignorant fool  ~ Moliere  
9. A little inaccuracy sometimes saves tons of explanation.  ~ H.H. Munro 
10. A man can fail, but he isn't a failure until he blames someone else.  ~ J Paul Getty
11. A man is likely to mind his own business when it is worth minding. When it is not, he takes his mind off his own meaningless affairs by minding other people's business  ~ Hoffer
12. A man who exposes himself when he is intoxicated has not the art of getting drunk  ~ Dr.Samuel Johnson 
13. A man who suspects his own tediousness is yet to be born  ~ Thomas Bailey Aldrich
14. A man's homeland is where he prospers  ~ Aristophanes  
15. A mature man lives humbly for a great cause, an immature man dies for it.  ~
16. A multitude of words is probably the most formidable means of blurring and obscuring thought  ~ Hoffer
17. a passionate obsession with the outside world or the private lives of others is an attempt to compensate for a lack of meaning in one's own life  ~ Eric Hoffer
18. A pathological liar is someone who tell untruths that serve no obvious purpose.  ~
19. A patient had a 50-50 chance of benefiting from visiting a physician as of 1910.  Medicine was more like voodoo than science until the 20th Century.  ~ Abraham Flexner
20. A person’s first duty, a young person’s at any rate, is to be ambitious, and the noblest ambition is that of leaving behind something of permanent value.  ~ GH Hardy 
21. A poet over 30 is pathetic  ~ H.L. Mencken 
22. A Pseudo-science consists of a nomenclature by which all positive evidence as favors its doctrine is admitted, and all negative evidence is excluded.  ~ Oliver Wendell Holmes.
23. A psychotic thinks 2+2  ~5.  A neurotic thinks 2+2  ~4 and can't stand it. 
24. A scientific theory is a tool and not a creed.  ~ J.J.Thomson  
25. A sense of proportion, which implies priority, is the essence of common sense; it requires the ability to compared ends, as opposed to just means.    
26. A single idea, if it is right, saves us the labor of an infinity of experiences.  ~ Jacques Maritain 
27. A spoiled child never loves his mother  ~ Sir Henry Taylor
28. A successful life doesn't require that we've done the best, but that we've done our best.  ~ H. Jackson Brown, Jr.
29. A thing is not necessarily true because someone dies for it.  ~ Oscar Wilde 
30. A true scientist is known by his confession of ignorance  ~ A.O.Foster  
31. A wise man proportions his belief to experience.  ~ David Hume 
32. Ability, connections, and status are wealth 
33. Again and again, the bright thought has occurred, "if we can only define our terms, if we can only find the basic unit, if we can spot the right 'indicators', we can then measure and reason flawlessly, we shall have created one more science."  ~ Jaques Barzun 
34. All anger is self-righteous anger.  There are few cynical opportunists, more often ideologues and moralists. 
35. All bad art is the result of good intentions.  
36. All data are filtered, observation is necessarily 'theory-laden'.  ~ N.R. Hanson 
37. All flatterers are mercenary, and all low-minded men are flatterers.    ~ Aristotle  
38. All movements go too far.   ~ Bertrand Russell 
39. All our advantages have complimentary negatives at some level 
40. All supporters of totalitarian despots have hated the bourgeois.  
41. All things are difficult before they are easy.  ~ Thomas Fuller 
42. All things excellent are as difficult as they are rare  ~ Spinoza  
43. All truth passes through three stages.  First it is ridiculed.  Next it is violently opposed. Last it is recognized as self-evident.  ~ Shopenhauer  
44. Almost all inventors are extremely fond of their latest idea, to the degree that their good judgment is affected.  
45. Almost anyone can do science; almost no one can do good science.  ~ LL Larison Cudmore
46. Almost everything you do will be insignificant, but it is very important you do it.  ~ Ghandi  
47. Always asking for finished products is a sure way to manage projects into failure.  One needs to manage a process that involves iterations of imperfect work.    
48. Always try to simplify your syntax and enrich your vocabulary  
49. An alcoholic is anyone you don't like who drinks more than you do.  ~ Dylan Thomas. 
50. An expert is a man who has made all the mistakes which can be made, in a narrow field.   ~ Niels Bohr 
51. An intellectual is a man who takes more words than necessary to tell more than he knows  ~ Dwight Eisenhower 
52. Analytic or creative work is best done when in a somewhat lugubrious state of mind.  
53. And no one lies as much as the indignant do.  ~ Nietsche  
54. and those who were seen dancing were thought to be insane by those who could not hear the music  ~ Friedrich Nietzsche 
55. Animals don't think about meaning. 
56. Ants are the most selfless animals, yet they are also the most warlike and take slaves.  If you don't value your self highly, how can you value other selves highly?  
57. Anxiety is the essential condition of intellectual and artistic creation.  ~ Charles Frankel 
58. Any explicit, complicated process invites its circumvention.    
59. Any jackass can kick down a barn but it takes a good carpenter to build one.   ~ Lyndon B Johnson  
60. Any sufficiently advanced technology is indistinguishable from a rigged demo.  ~ Andy Finkel 
61. Anybody can become angry—that is easy; but to be angry with the right person, and it the right degree, and at the right time, and for the right purpose, and in the right way—that is not within everybody’s power and is not easy.  ~ Aristotle  
62. Anyone can carry his burden, however hard, until nightfall.  ~ Robert Louis Stevenson
63. Anyone can come up with very hard or very easy problems, the key is to come up with interesting yet soluble problems.    
64. Anyone who has never made a mistake has never tried anything new  ~ Albert Einstein 
65. Anyone who isn't confused really doesn't understand the situation  ~ Edward R Murrow
66. Anything becomes interesting if you look at it long enough.  ~ Gustave Faubert 
67. Anything you're good at contributes to happiness.   ~ Bertrand Russell 
68. Arguments convincing to one group are often totally unconvincing to others.       
69. Aristotle maintained that women had fewer teeth than men; although he was twice married, it never occurred to him to verify this statement by examining his wives' mouths.  ~ Bertrand Russell 
70. Arrive at knowledge over small streamlets, and do not plunge immediately into the ocean, since progress must go from the easier to the more difficult.  ~ Aquinas  
71. Arriving at one goal is the starting point to another.  ~ John Dewey  
72. art is something valuable, neither anticipated nor wanted before it was created.  Science creates valuable ideas that are inevitable.  
73. As farmers and manufacturing has declined, their status has declined, and their subsidies have increased  
74. As regulations proliferate, it's impossible to enforce them all fairly. Enforcement becomes selective and capricious. Legislative micromanagement is the road to tyranny. 
75. As you age, your talents go from Will, to Quickness, no judgment 
76. At bottom are only two pure forms of legislation -- productive and redistributive.  ~ Richard A. Epstein
77. At the center of your being you have the answer; you know who you are and you know what you want  ~ Lao Tzu 
78. Attention implies the withdrawal from some things in order to deal effectively with others 
79. Avoid the temptation to work so hard that there is no time left for serious thinking.  ~ Francis Crick 
80. Bad ideas aren’t retracted, they are orphaned.  ~
81. Bad perseverance is defined by excessive perseverance stemming from ignorance of the situation, economics, or overconfidence.  ~
82. Basic research is what I am doing when I don't know what I am doing.  ~ Werner von Braun
83. Because geniuses can be eccentric doesn’t imply we should elevate pettiness, boorishness, and irresponsibility with virtue  
84. Because reputation lags achievement, we should expect people to reach the zenith of their reputation well past the zenith of their productive output  ~ Richard Posner 
85. Being a professional means doing your job on the days you don't feel like doing it.  ~ David Halberstam 
86. Being objective doesn’t imply being neutral, in fact more the more you know the less neutral you  become  
87. Better do a little well, than a great deal badly.  ~ Aristotle  
88. Both the revolutionary and the creative individual are perpetual juveniles. The revolutionary does not grow up because he cannot grow, while the creative individual cannot grow up because he keeps growing  ~ Hoffer
89. Business is not like chess, but like poker, where chance and asymmetric information demand anticipation and probability analysis.  
90. By regulating action, which we can control, we indirectly regulate feelings, which we cannot  
91. Cargo Cult analysis is analysis that superficially looks like sophisticated work, but in reality is missing the essence of true analysis.     
92. Childhood is about developing friendships, interests, discipline and independence.  
93. Children have never been good at listening to their elders, but they have never failed to imitate them.  ~  James Baldwin 
94. Comfort without struggle—and the sense of insecurity that motivates it—leads to self destructive decadence.  
95. Commitment becomes hysterical when those who have nothing to give advocate generosity, and those who have nothing to give up preach renunciation.  ~ Hoffer
96. Common sense and Bayes theorem suggests that given two persuasive speakers, you will find those which most agree with you as most persuasive.     
97. common sense is an intuitive grasp of reality, which takes honesty  ~
98. Common sense is as rare as genius.  ~ Emerson  
99. Common sense is nothing more than a deposit of prejudices laid down in the mind before you reach eighteen.    ~ Albert Einstein 
100. Confused thinking … leads nowhere in particular and can be indulged indefinitely without producing any impact upon the world.  ~ Stanislav Andreski 
101. Convictions are more dangerous enemies of truth than lies.  ~ Nietzcshe  
102. Could Hamlet have been written by a committee, or the Mona Lisa painted by a club?    Creative ideas do not spring from groups.  The divine spark leaps from the finger of God to the Adam, whether it takes ultimate shape in a law of physics or a law of the land, a poem or a policy, a sonata or a mechanical computer.  ~ A Whitney Griswold
103. Courage is a readiness to risk humiliation.  ~ Nigel Dennis 
104. Courage is about doing what you're afraid to do.  ~ Eddie Rickenbacker 
105. Courage is grace under pressure  ~ Ernest Hemingway
106. Courage is no less a virtue because it is rarely needed 
107. Courage is not demonstrated by assuming unpopular stands from the past that subsequently became popular.   
108. Courage is the most important virtue because it is the hardest.  ~ David Brooks 
109. Crass self interest is often masked with pretexts such as justice and fairness and process.  ~
110. Creative minds have always been known to survive any kind of bad training.  ~ Anna Freud 
111. Creative people are often neurotic, and tend to have more anxiety, lower self-esteem and lower tolerance for stress than other individuals.  
112. Criticism is always a kind of compliment.  ~ John Maddox 
113. Cursed is everyone who places his hope in changing the nature of man  ~ Augustine  
114. Data are like inkblot, you read into them your unconscious preconceptions.  
115. Death need not concern us because when we exist death does not, and when death exists we do not.  ~ Epicurus
116. Deep faith eliminates fear.  ~ Lech Walesa 
117. Democracy substitutes election by the incompetent many for the appointment by the corrupt few  ~ George Bernard Shaw
118. Democratic socialism leads away from socialism because people eventually choose nonsocialist policies.    
119. Distrust all those who love you extremely upon a very slight acquaintance and without any visible reason  ~ Lord Philip Dormer Stanlope
120. Do not be a hair splitter in whose hands the complicated questions do not become simple, but the simple complicated. 
121. Doing something important comparatively well gives meaning, because people necessarily then appreciate you.  
122. Don’t let a little dispute injure a great friendship.  ~
123. Don't go around saying the world owes you a living. The world owes you nothing. It was here first.  ~ Mark Twain 
124. Don't look at what people say, look at what they do 
125. Doubt is the essence of consciousness.    
126. Economics involves the implications of individuals making rational decisions given their constraints and sef-interest.  
127. Education is an admirable thing, but is well to remember from time to time that nothing that is worth knowing can be taught.  ~ Oscar Wilde 
128. Education is what remains after one has forgotten everything he learned in school.  ~ Albert Einstein 
129. Education would be so much more effective if its purpose were to ensure that by the time they leave school every boy and girl should know how much they don’t know, and be imbued with a lifelong desire to know it.   ~ Sir William Haley
130. Elegance and consistency are means to an end, which is out-of-sample prediction.  
131. Emphasis on models as the major difference is wrong, the main difference is in variable selection and the transformation of those variables.     
132. Empty vessels make the loudest sound, so they with least wit are the greatest babblers.  ~ Plato  
133. Equations are more important to me, because politics is for the present, but an equation is something for eternity.  ~ Albert Einstein 
134. Errors are many, truth is unique.  ~ Peter Kapitsa 
135. Every decent man is ashamed of the government he lives under  ~ HL Mencken 
136. Every man loves what he is good at.  ~ Thomas Shadwell 
137. Every man supposes himself not to be fully understood.  ~ Ralph Waldo Emerson
138. Every person takes the limits of their own field of vision for the limits of the world  ~ Arthur Schopenhauer 
139. Every speech should contain only three main points.  All else will be forgotten.    ~
140. Everybody is ignorant, only on different subjects.  ~ Will Rogers 
141. Everyone, according to the Japanese, has a hidden ikigai.  
142. Everything ends badly ... otherwise it wouldn't end.  ~ Koglan the Bartender
143. Everything is always decided for reasons other than the real merits of the case  ~ John Maynard Keynes
144. Everything is both simpler than we can imagine, and more entangled than we can conceive.  ~ Goethe  
145. Everything must not always be said, for that would be folly.  ~ Montaigne  
146. Excellence is rarely found, more rarely valued.  ~ Goethe  
147. Exempt from vulgar prejudices, but full of his own  
148. Experience is a dear teacher, and fools will learn from no other.  ~ Ben Franklin 
149. Experience is the Mother of science.  ~ H.G.Bohn  
150. Expert knowledge is limited knowledge ~ Winston Churchil
151. Experts are much better at describing, explaining, performing tasks, and problem-solving within their domains than are novices, but, with a few exceptions, are worse at forecasting than actuarial tables based on historical, statistical models. 
152. Experts not only know what works, they know what doesn’t work.  This makes them bad for creativity.    
153. Facts do not cease to exist because they are ignored  ~ Aldous Huxley 
154. Facts without theory is trivia.  Theory without facts is bullshit.  
155. Facts, however, will ultimately prevail; we must therefore take care that they be not against us.  ~ Francis Bacon 
156. False facts are highly injurious to the progress of science, for they often long endure; but false views, if supported by some evidence, do little harm, as everyone takes a salutary pleasure in proving their falseness.  ~ Charles Darwin 
157. For creative thought, common sense is a bad master.  Its sole criterion for judgment is that the new ideas shall look like the old ones.  In other words it can only act by suppressing originality.  ~ Alfred North Whitehead
158. Forget past mistakes.  Forget failures.  Forget everything except what you’re going to do now and do it.  ~ William Durant 
159. Fortune does not change men, it unmasks them  ~ Suzanne Necker 
160. Friends aren't soulmates, they are people you do things with  
161. From birth to 18 a girl needs good parents.  From 18 to 35 she needs good looks. From 35 to 55, good personality.  From 55 on, she needs good cash.  ~ Sophie Tucker 
162. Genius is only a greater aptitude for patience  ~ Comte de Buffon
163. Give not advice without being asked, and when desired, do it briefly.    ~ George Washington 
164. Given the difficulties forecasting the future, it is very useful to simply know your present condition  ~
165. Good judgment comes from experience, and experience comes from bad judgment.  ~ Barry LePatner 
166. Good models are models useful for making important decisions.     
167. Good warriors are indolent laborers  
168. Great ideas are new, true, and important 
169. Great minds discuss ideas, average minds discuss events, small minds discuss people.    ~ H.G.Rickover  
170. Great young innovators make radical simplifications that allow them to leapfrog the expert’s relative advantage in technical knowledge. Older innovators are most often praised for their wisdom and judgment.  ~
171. Greatests crimes are of excess rather than need 
172. Growing up is about developing friendships, interests, discipline and independence.  ~
173. Guilt is feeling bad about what you did, shame feeling bad about yourself. Choose guilt.  ~
174. Happiness is different from pleasure. Happiness has something to do with struggling, enduring, and accomplishing.  ~ George Sheehan 
175. Happiness is not mostly pleasure, it is mostly victory.  ~ Harry Emerson Fosdick
176. Have strong opinions weakly held.  They are then theories you test.  
177. Have the courage to change the things you can, the patience to accept the things you can't, and the wisdom to know the difference  ~ Serenity Prayer
178. He that loves to be flattered is worthy of the flatterer.  ~ Shakespeare  
179. He who is of a calm and happy nature will hardly feel the pressure of age, though to him who is of an opposite disposition youth and age are equally a burden.  ~ Aristotle  
180. He who is to be a good ruler must have first been ruled.  ~
181. He who is unable to live in society, or who has no need because he is sufficient for himself, must be either a beast or a god.  
182. He who praises everybody, praises nobody  ~ James Boswell 
183. He who says there is no such thing as an honest man, you may be sure is himself a knave  ~ George Berkeley  
184. Holding beliefs proportionate to evidence requires humility  
185. Human beings are, necessarily, actors who...can be divided...into the sane who know they are acting and the mad who do not.    ~ W.H.Auden
186. humans are tribal, so being tribal makes one human.  
187. Humor is the only test of gravity, and gravity of humor; for a subject which will not bear raillery is suspicious, and a jest which will not bear serious examination is false wit.  ~ Aristotle  
188. I can feel guilty about the past, apprehensive about the future, but only in the present can I act.  The ability to be in the present moment is a major component of mental wellness.  ~ Abraham Maslow 
189. I can think of nothing less pleasurable than a life devoted to pleasure  ~ John D Rockefeller
190. I can usually judge a fellow by what he laughs at  ~ Wilson Mizner 
191. I contend we are both atheists. I just believe in one fewer god than you do.  ~ Stephen F. Roberts
192. I desire to go to Hell, not Heaven.  In Hell I shall enjoy the company of popes, kings, and princes, but in Heaven are only beggars, monks, hermits, and apostles.  ~ Machiavelli  
193. I don't know the key to success, but the key to failure is trying to please everybody.  ~ Bill Cosby 
194. I like, as a director and a spectator, simple, direct, frank films. Nothing disgusts me more than snobbism, mannerism, technical gratuity... and, most of all, intellectualism.  ~ John Ford 
195. I love him who desires not too many virtues. One virtue is more of a virtue than two, because it is more of a knot for one's destiny to cling to.   
196. I never saw a pessimistic general win a battle.  ~ Dwight Eisenhower 
197. If a man is often the subject of conversation he soon becomes the subject of criticism.  ~ Kant  
198. If all men knew what each said of the other, there would not be four friends in the world,  ~ Pascal  
199. If an experiment comes out as expected it can be very nice, but if it can only be considered great if it is a surprise.  ~
200. If any philosopher had been asked for a definition of infinity, he might have produced some unintelligible rigmarole, but he would certainly not have been able to give a definition that had any meaning at all.   ~ Bertrand Russell 
201. If at first you don't succeed, try again. Then quit. There is no point making a fool of yourself.  ~ WC Fields 
202. If Columbus had turned back, no one would have blamed him. Of course, no one would have remembered him either.  
203. If everything seems under control, you're not going fast enough  ~ Mario Andretti 
204. If God is dead, everything is allowed.  ~ Fyodor Dostoyevsky 
205. If I asked people what they wanted, I would have given them faster horses  ~ Henry Ford 
206. If many years go by in a field in which no significant new facts come to light, the field sharpens up the opinions and gives the appearance that the problem is solved.  ~ Thomas Gold 
207. If merely 'feeling good' could decide, drunkenness would be the supremely valid human experience.  ~ William James 
208. If people never did silly things, nothing intelligent would ever get done.  ~ Ludwig Wittgenstein 
209. If the facts don't fit the theory, change the facts.  ~ Albert Einstein 
210. If we do not discipline ourselves the world will do it for us.  ~ William Feather 
211. if we expect people to take us as we are, we should expect others to also be as they are  ~
212. If we take man as he is we make him worse, if we take man as he should be we make him what he can be  ~ Goethe
213. If you buy the why, the how is infinitely bearable  ~ Nietsche  
214. If you can distinguish between good advice and bad advice, then you don’t need advice.  ~ VanRoy  
215. If you get a good wife, you will become very happy; if you get a bad one, you will become a philosopher—and that is good for every man.  ~ Aristotle  
216. If you lose your temper, you’ve lost the argument.  
217. If you make people think they're thinking, they'll love you; But if you really make them think, they'll hate you.  ~ Don Marquis 
218. If you read a book and aren't a better person, there's no reason to have read it.  
219. Ignorant men raise questions that have already been answered.  ~ Goethe  
220. In an adequate social order, the untalented should be able to acquire a sense of usefulness and of growth without interfering with the development of talent around them  ~ Hoffer
221. In answering an opponent, arrange your ideas, but not your words.    ~ CC Colton 
222. In banking, it’s credit, spread, and volume.  You can’t have all three.  
223. In disagreements with loved ones, deal only with the current situation. Don’t bring up the past.  
224. In every fat book there is a thin book trying to get out.  
225. In prosperity our friends know us, in adversity we know our friends 
226. In public speech, tell jokes in threes.  Start silly, get more serious. 
227. In real life, good people are interesting and bad people are dull, while in fiction it is the opposite.    
228. In science, read the newest books.  In literature, read the oldest.  ~ Edward Bulwer-Lytton. 
229. In the absence of either fear or hope, only the present moment has any reality: you do what is most amusing, or least boring, at each passing moment.  ~
230. In theory there is no difference between theory and practice. In practice there is.  ~ Janvande Snepscheut 
231. Include a fresh metaphor or illustration in every major presentation  
232. Indignation does not imply moral superiority 
233. Instincts include: seeking, rage, fear, lust, care/confidence, grief/panic  
234. Intolerant people think they are applying integrity 
235. Is does not imply ought, but it informs it.  
236. It doesn't have to be perfect to be good  
237. It doesn't matter how beautiful your theory is, it doesn't matter how smart you are. If it doesn't agree with experiment, it's wrong.  ~ Richard Feynman 
238. It has been my experience that folks who have not vices have very few virtues  ~ Abraham Lincoln 
239. It is a golden rule not to judge men by the opinions but rather by what their opinions make of them.  ~ George Lichtenberg, 
240. It is a hard thing for intellectuals to acknowledge benefits from their rich moral inferiors who never so intended it.   ~ Victor Davis Hanson
241. It is a truism to say that a good experiment is precisely that which spares us the exertion of thinking: the better it is, the less we have to worry about its interpretation, about what it really means.  ~ Peter Medawar 
242. It is always probable that something improbable will happen.  ~ Logan Bleckley 
243. It is awfully important to know what is and what is not your business.  ~ Gertrude Stein 
244. It is dangerous to be sincere unless you are also stupid.  ~ George Bernard Shaw 
245. It is difficult for people to sort out problems on the fly as failure spreads through a complex system.  
246. It is equally a mistake to hold one’s self too high, or to rate one’s self too cheap.  ~ Goethe  
247. It is far better to be flexible and know how to learn, rather than trying to make sure you get it right the first time and don’t make mistakes.    
248. It is hard to believe that a man is telling the truth when you know that you would lie if you were in his place  ~ HL Mencken 
249. It is important to be accepted, more so than to have specific friends. 
250. It is inaccurate to say I hate everything.  I am strongly in favor of common sense and honesty, which makes me against most of what we do.  ~ HL Menken 
251. It is much better to know something about everything than to know everything about one thing.  ~ Pascal  
252. It is much easier to make measurements than to know exactly what you are measuring.  ~ J.W.N.Sullivan.  
253. It is necessary that at least once in your life you doubt, as far as possible, all things.  ~ Descartes  
254. It is not good to have everything one wants  ~ Pascal  
255. It is not he who gains the exact point in dispute who scores most in controversy—but he who has shown the better temper  ~ Samuel Butler 
256. It is not once nor twice but times without number that the same ideas make their appearance in the world.  
257. It is not titles that honor men, but men that honor titles.  ~ Machiavelli  
258. It is one of the blesings of old friends that you can afford to be stupid with them  ~ Emerson  
259. It once took 90% of our population to grow our food. Now it takes 3%. Are we worse off because of the job losses in agriculture?  
260. It takes years of training it ignore the obvious.  
261. It’s always tempting to do good at someone else’s expense  ~ Bastiat  
262. It’s easy to have faith in yourself and have discipline when you’re a winner, when you’re number one.  What you got to have is faith and discipline when you’re not a winner.  ~ Vince Lombardi 
263. It's good to have dreams, but not illusions.  ~
264. It's not what you have done, but the life you lead.  Karma exists 
265. I've never known a person to live to be one hundred and be remarkable for anything else.  ~ Josh Billings 
266. Just as flattery of a friend can pervert, so the insult of an enemy can sometimes correct.  ~ Augustine  
267. Justice is Equality…but equality of what?  ~ Book 3, Aristotle's Politics
268. Keep you fears to yourself, but share you courage with others.  ~ Robert Louis Stevenson
269. Keys to a convincing theory: simple enough to be apprehended without much strain but convoluted enough to require a caste of interpreters. 
270. Kids don’t need encouragement thinking they understand things they have only the vaguest understanding of. 
271. Kids gossip more in part because they expect more from their friends, and thus experience many petty betrayals that they have to talk about.  
272. Knowledge can be communicated, but not wisdom  ~ Herman Hesse 
273. Knowledge has to be sucked into the brain, not pushed into it  ~ Victor F. Weisskop
274. Knowledge is of two kinds: we know a subject itself, or know where to find it.  ~ Johnson  
275. Knowledge of what is possible is the beginning of happiness  ~ Santayana  
276. Laws are silent in time of war.  ~ Cicero  
277. Laymen feel that facts are easy and theory is difficult.  It is often the other way around. 
278. Less is More  ~ Robert Browning 
279. Liberty is more feasible that equality, and pursuing liberty hurts equality less than pursuing equality hurts liberty. 
280. Literature is mostly about sex and a little about having children.  Life is the other way around.  ~ David Lodge 
281. Live your life so that if someone says 'Be yourself' it's good advice.  ~ Robert Orben 
282. Man needs, for his happiness, not only the enjoyment of this or that, but hope and enterprise and change.   ~ Bertrand Russell 
283. Many can bear adversity, but few contempt.  ~ ThomasFuller  
284. many friends are the key to happiness  ~ Epicurus
285. Many think we should cultivate the habit of thinking of what we are doing. The precise opposite is the case. Civilization advances by extending the number of important operations which we can perform without thinking about them.  ~ Alfred North Whitehead
286. Mechanizing man's work had changed but not lighted his toil.    ~ JS Mill 
287. Mediocrity knows nothing higher than itself, but talent instantly recognizes genius.  ~ Arthur Conan Doyle
288. Men are born for each other’s sake, so either teach people or endure them  ~ Marcus Aurelius 
289. Men are made by nature unequal.  It is vain, therefore, to treat them as if they were equal.  ~ James Anthony Froude
290. Men are more apt to be mistaken in their generalizations than in their particular observations.   Machiavelli  
291. Men believe in the truth of anything so long as they see that others strongly believe it is true   Friedreich Nietzsche 
292. Men do not desire merely to be rich, but to be richer than other men.  ~ John Stewart Mill
293. Men need sex more than women, and this gives women power over men.     
294. Moderation in all things  ~ Democritus
295. Modesty is a virtue not because it implies servile humility, but because it implies a combination of honesty and knowledge 
296. Monarchy operates on the principle of honor, republicanism on virtue, despotism on fear, and totalitarianism on ideology or (seen from within) on truth.  
297. Money, it turns out, is exactly like sex.  You thought of nothing else if you didn't have it, and thought of everything else once you did.  ~ James Baldwin 
298. More than pay what makes for a happy organization is confidence that higher-ups are making good decisions.  
299. Most analytical work is nonproductive: little is new and a significant portion is actually incorrect.     
300. Most new ideas are bad. 
301. Most people are too stupid to act in their own interest  ~ Nietsche  
302. Most people do what they to do, no matter how heroic, because they have no option, they have a job to do so they go on and  do it.  
303. Most people find confidence attractive  and convincing in presenting ideas.  Yet, it should be noted that confidence often implies ignorance or duplicity.    
304. Most questions about correct word usage are questions of custom and authority rather than grammatical logic.    
305. Most questions are really statements.   
306. Much that passes as idealism is disguised hatred or disguised love of power.   ~ Bertrand Russell 
307. Natural wealth is both limited and easily obtained, but vanity is insatiable   
308. Nature isn't good or bad, it's indifferent. 
309. Nearly all men can stand adversity, but if you want to test a man’s character, give him power.  ~ Abraham Lincoln 
310. Neutrality only helps the oppressor, never the victim.  ~ Elie Weisel 
311. Never complain and never explain.  ~ Benjamin Disraeli 
312. Never explain--your friends do not need it, and your enemies will not believe you anyway.    ~ Elbert Hubard 
313. Never mistake motion for action  ~ Ernest Hemingway 
314. Never speak ill of yourself, your friends will always say enough on that subject  ~ Charles Maurice 
315. Never will man penetrate deeper into error than when he is continuing on a road which has led him to great success  ~ Friedrich Hayek 
316. New theories, when first proposed and supported, may make the first page of the New York Times.  Their demise rarely makes even page 18.     
317. Nihilism, cynicism, and sarcasm are the symptoms of bored and guilt-ridden people who belittle those who create their comfort.   
318. No conqueror believes in chance.  ~ Friedrich Nietzsche 
319. No delusion is greater than the notion that method and industry can make up for lack of motherwit, either in science or in practical life.  ~ Thomas Huxley 
320. No great genius has ever existed without some touch of madness  ~ Aristotle  
321. No great philosophy is ever proven wrong, just irrelevant.  ~
322. No guest is so welcome in a friend’s house that he will not become a nuisance after three days  ~ Titus Macuious Plautus
323. No human thing is of serious importance  ~ Plato  
324. No matter how far you have gone on the wrong road, turn back.  ~ Turkish Proverb 
325. No one washes a rented car   
326. No one would choose a friendless existence on condition of having all the other things in the world.  ~
327. No opinion should be held with fervor.  None holds with fervor that 7x8  ~56, because it is known that this is the case.  Fervor is necessary only in commending an opinion which is doubtful or demonstrably false.  ~ Voltaire  
328. No people do so much harm as those who go about doing good.  ~ Bishop Mandell Creighton
329. No science ever defends its first principles.  ~ Aristotle
330. No single piece of macroeconomic advice given by the experts to their government has ever had the results predicted.  ~ Peter Drucker 
331. Nobody ever figures out what life is all about, and it doesn't matter anyway  ~ Richard Feynman 
332. Nobody forgets where he buried the hatched  ~ Frank McKinney 
333. Nobody speaks of a beautifful view for 5 minutes  ~ Robert Lewis Stevenson
334. Not to know what happened before you were born is to remain forever a child   
335. Nothing is ever achieved without enthusiasm.   ~ Ralph Waldo Emerson
336. Nothing is so powerful as an idea whose time has come  ~ Victor Hugo 
337. Often times what people do that’s valuable is very simple, but they make it seem more complex in order to flatter themselves   
338. Older, accomplished people often fail miserably to appreciate new theories. 
339. One can always be kind to people about whom one cares nothing  ~ Oscar Wilde 
340. One may go wrong in many different ways, but right only in one, which is why it is easy to fail and difficult to succeed.  ~ Aristotle  
341. One must never lose time in vainly regretting the past or in complaining against the changes which cause us discomfort, for change is the essence of life.  ~ Anatole France 
342. One of the symptoms of an approaching nervous breakdown is the belief that one's work is terribly important  ~ Bertrand Russel 
343. One should respect an honest person even if he expresses opinions differing from one’s own.  ~ Albert Einstein  
344. Only a small part of scientific progress has resulted from planned search for specific objectives.  A much more important part has been made possible by the freedom of the individual to follow his own curiosity.  ~ Irving Langmuir 
345. Only by reading great works can you really get an inkling of how a great intellect works.   
346. Only mediocrity can be trusted to always be at its best  ~ SirMaxBeerbohm  
347. Only the simplest mind can believe that in a great controversy one side was mere folly  ~ AJ Kane
348. Only thoughts reached by walking have value.  ~ Nietsche  
349. Opinion is ultimately determined by the feelings, and not by the intellect.  ~ Herbert Spencer 
350. Opportunities are usually disguised as hard work, so most people don’t recognize them  ~ Ann Landers 
351. Our Constitution is made only for a moral and religious people. It is wholly inadequate to the government of any other.     ~ John Adams 
352. Our ignorance of history makes us libel our own times. People have always been like this  ~ Gustave Flaubert 
353. Our minds are lazier than our bodies  ~ La Rochefoucauld  
354. Our narrative self interprets the many parallel processes going on in our brains  ~
355. Our task is not to penetrate the essence of things, the meaning of which we do not know anyway, but rather to develop concepts which allow us to talk in a productive way about phenomena in nature  ~ Niels Bohr 
356. Patience is the companion of wisdom.  ~ Augustine  
357. Peace of Mind comes from not wanting to change others  ~ Gerald Jampolsky 
358. Pedantry is the dotage of knowledge.  ~ Holbrook Jackson 
359. People are best judged by their actions  ~ Max Perutz 
360. People can do remarkably well in controlling complex machines whose workings are fully understood and open to view.  ~ Robert Chiles 
361. People know more than they can articulate (eg, grammar) 
362. People want to hire someone more intelligent but less ambitious than themselves.   
363. People who need advice are least likely to take it.   
364. People wish to learn to swim and at the same time to keep one foot on the ground.  ~ Marcel Proust 
365. Perfection is achieved, not when there is nothing left to add, but when there is nothing left to take away  ~ Antoine de Saint-Exupéry
366. Personal retribution is the justice of those with a weak state   
367. Pick battles big enough to matter, small enough to win.  ~ Jonathan Kozol  
368. Play is about taking things to the point of bad things happening   
369. Politicians seek to elicit the words, “I don’t know why. I just like the guy.” 
370. Poor is the pupil who does not surpass his master.  ~ Leonardo DaVinci 
371. Prejudices, not faulty reasoning, are the main obstacles of truth  ~
372. Preparing for battle, plans were essential.  But once the battle was joined, plans were useless.  ~ Dwight Eisenhower 
373. Pride is in general censured and decried, but mainly by those who have nothing to be proud of  ~ Arthur Schopenhauer 
374. Progress has been much more general than retrogression  ~ Darwin  
375. Prose talent depends on having something to say and an interesting, highly developed way of saying it.  ~ Fitzgerald  
376. Quoting one is plagiarism. Quoting many is research.  ~
377. Real knowledge is to know the extent of one’s own ignorance.  ~ Confucius  
378. Reality is not subject to the limits of human knowledge.  ~ Troy Gustavel 
379. Religion is about telling us what we shouldn't do, spirituality about telling us to feel comfortable doing what we want
380. Republics decline into democracies and democracies degenerate into despotisms. 
381. Reputation is what you are perceived to be, your character is what you really are. 
382. Rudeness is a weak man’s imitation of strength  ~ George Orwell 
383. Sadness diminishes a man’s powers  ~ Spinoza  
384. Science is a great many things, but in the end they all return to this: science is the acceptance of what works and the rejection of what does not.  That needs more courage than we might think.  ~ Jacob Bronowski 
385. Science is built up with facts, as a house is with stones.  But a collection of facts is no more a science than a head of stones is a house.  ~ Henri Poincare 
386. Science means simply the aggregate of all the recipes that are always successful.  The rest is literature.    ~ Paul Valery 
387. Scientific progress is the cumulative growth of a system of knowledge over time, in which useful features are retained and unuseful features are abandoned.   
388. Scientific research is not itself a science: it is still an art or craft.  ~ William H. George
389. Scientists are always dispensable, for in the long run, others will do what they have been unable to do themselves ~ Peter Medwar 
390. Search for pleasure, search for power, search for meaning.  The last is most important.  ~
391. Seek simplicity and distrust it  ~ Alfred North Whitehead
392. Seek, above all, for a game worth playing  ~ Robert S. de Ropp
393. Selfishness and altruism are always present in children, one towards group mates, the other towards outsiders.  ~
394. Self-righteousness is a loud din raised to drown the voice of guilt within us  ~ Hoffer
395. Sexiness is unselfconscious and full of self-confidence, indifferent to the effect he or she is producing, and uninfluenced by others. There must be physical attraction, but beauty is unnecessary   
396. Show me a good and gracious loser, and I'll show you a failure.  ~ Knute Rockne 
397. Silence is sometimes the best answer.   
398. Simplicity is the ultimate sophistication.  ~ Leonardo Da Vinci
399. Small opportunities are often the beginning of great enterprises.  ~ Demosthenes  
400. So far as I can remember, there is not one word in the Gospels in praise of intelligence.   ~ Bertrand Russell 
401. So long as men praise you, you can only be sure that you are not yet on your own true path but on someone else’s  ~ Friedrich Nietzche 
402. Some think people who are equal in any respect are equal all respects; because men are equally free, they claim to be absolutely equal  ~ Aristotle  
403. Sometimes being brutally honest seems cruel but is kind.  Sometimes it is just cruel. 
404. Sometimes it is more important to discover what one cannot do, than what one can do.  ~ Lin Yutang  
405. Stories embody our search for meaning in an otherwise indifferent world, or experience of the rapture of being alive. 
406. Stress isn’t caused by bad times, but by working where you feel your talents are being underappreciated.    ~ Lynn Cheney 
407. Stupidity is without anxiety.  ~ Goethe  
408. Success is a lousy teacher. It seduces smart people into thinking they can’t lose.  ~ Bill Gates
409. Success is from effort, ability, and luck. 
410. Success is peace of mind, attained only through self satisfaction knowing you made the effort to do the best you are capable   
411. Suffering only has meaning when you cannot control the cause.  Your attitude can then be heroic.  ~
412. Take the time to deliberate, but when the time for action arrives, stop thinking and go in  ~ Andrew Jackson 
413. Talent hits a target no one else can hit; Genius hits a target no one else can see.  ~ Arthur Schopenhauer 
414. Talent should be judged at its best, character at its worst  ~ Lord Acton 
415. The art of being wise is knowing what to overlook  ~ William James 
416. The average man believes a thing first, and then searches for proof to bolster his opinion  ~ Elbert Hubbard  
417. The average man, who does not know what to do with his life, wants another one which shall last forever.  ~ Anatole France  
418. The benefit of optimism is that it mitigates discouragement   
419. The best apology against false accusers is silence.  ~ Milton  
420. The best use of life is to spend it for something that will outlast it.  ~ William James 
421. The best way to have a good idea is to have lots of ideas.   ~ Linus Pauling 
422. The Catholic and the Communist are alike in assuming that an opponent cannot be both honest and intelligent.    ~ George Orwell 
423. The central business of adulthood, finding serious things to tie yourself down to   
424. The chief difference between free capitalism and State socialism seems to be this: that under the former a man pursues his own advantage openly, frankly and honestly, whereas under the latter he does so hypocritically and under false pretenses  ~ HL Mencken 
425. The chief virtue that language can have is clearness, and nothing detracts from it so much as the use of unfamiliar words.  ~ Galen  
426. The devil can cite Scripture for his own purpose  ~ Shakespeare  
427. The difference between a good and excellent employee is that the good one does what you tell them, and the excellent one does what you want.     
428. The difference between an average artist and a bad what is what he can draw.  The difference between a good artist and an average one is what he sees.    
429. The difference between life and the movies is that a script has to make sense.    ~ David Schmaltz
430. The enemies of the future are always the very nicest people  ~ Chistopher Morley 
431. The essence of sport is courage.  ~ Thomas McGuane 
432. The eye sees only what the mind is prepared to comprehend.  ~ Henry Bergson 
433. The fact that an opinion is widely held is no evidence whatever that it is not utterly absurd; indeed in view of the silliness of the majority of mankind, a widespread belief is more likely to be foolish than sensible.    ~ Bertrand Russell 
434. The first step toward success is taken when you refuse to be a captive of the environment in which you first find yourself.  ~ Mark Caine
435. The fortune of our lives…depends on employing well the short period of our youth  ~ Thomas Jefferson 
436. The fruits of philosophy are the important thing, not the philosophy itself.  When we ask the time, we don’t want to know how watches are constructed.  ~ Geoge Lichtenberg 
437. The function of wisdom is to discriminate between good and evil.  ~ Cicero  
438. The goal of life is to be happy and have meaning.  Meaning comes from doing  things others value.  It's a balance, and takes prudence. 
439. The greatest obstacle to discovery is not ignorance; it is the illusion of knowledge.  ~ Daniel J. Boorstin
440. The greatest way to live with honor in this world is to be what we pretend to be; and if we observe, we shall find, that all human virtues increase and strengthen themselves by the practice of them.  ~
441. The high-minded man does not bear grudges, for it is not the mark of a great soul to remember injuries, but to forget them.  ~ Aristotle  
442. The ideal man bears the accidents of life with dignity and grace, making the best of circumstances.   
443. The implied volatility is the wrong volatility we use in the wrong model in order to get the right price.  ~ Peter Carr 
444. The importance of a problem should not be judged by the number of pages devoted to it.  ~ Albert Einstein 
445. The insights that make you rich change every couple years.  Insights that make you happy don’t.  ~
446. The intuitive mind is a sacred gift, and the rational mind is a faithful servant.  ~ Einstein
447. The judge should not be young: he should have learned to know evil, not from his own soul, but from long observation of the nature of evil in others.  But knowledge should be his guide, not personal experience.    ~ Aristotle  
448. The man who early on regards himself as a genius is lost.  ~ George Christoph Lichtenberg
449. The man who sees both sides of a question is a man who sees absolutely nothing at all  ~ Oscar Wilde 
450. the mark of a great writer is the ability to interest the uninterested in the subject she writes about  ~
451. The more fundamental a scientific law the more briefly it can be stated.  ~
452. The most exciting phrase to hear in science - the one that heralds new discoveries - is not "Eureka!" but "That's funny..."  ~ IsaacAsimov  
453. The most imaginative people are the most credulous, for to them everything is possible.  ~ Alexander Chase 
454. The most important characteristic of a good manager is someone who can recognize value, whether certain projects add value or simply a waste of time.    
455. The most melancholy of human reflections, perhaps, is that on the whole, it is a question whether the benevolence of mankind does more good or harm.  ~ Walter Bagehot 
456. the most troublesome problem which confronts social engineering is how to provide for the untalented and, what is equally important, how to provide against them.  ~ Hoffer
457. The most vicious liars tell the truth in a way that leaves a false impression, leaving them technically immune to the charge of lying. 
458. The old aren't good at science, the young aren't good at politics  ~ Michael Chricton 
459. The old repeat themselves, and the young have nothing to say. The boredom is mutual  ~ Jacques Bainville 
460. The older I grow, the more I distrust the familiar doctrine that age brings wisdom.  ~ HL Mencken 
461. The only way to deep happiness is to do something you love to the best of your ability  ~ Richard Feynman 
462. The opposite of the religious fanatic is not the fanatical atheist but the gentle cynic who cares not whether there is a god or not.  ~ Eric Hoffer
463. The point to remember is that what the government gives it must first take away.  ~ John Striderr Coleman
464. The poor don't need money or pity, they need temperance, diligence, thrift and other bourgeois virtues.   
465. The preoccupation with detail necessary for works of creative genius is correlated with an  inability to manage or delegate  ~
466. The problem with heart disease is the first symptom is often fatal.  ~ Michael Phelps 
467. The real power of an individual isn't what they know, but the ability to learn.   
468. The remarkable thing is that we really love our neighbor as ourselves: we do unto others as we do unto ourselves. We hate others when we hate ourselves. We are tolerant toward others when we tolerate ourselves. We forgive others when we forgive ourselves. We are prone to sacrifice others when we are ready to sacrifice ourselves.  ~ Hoffer
469. The responsibilities we have as individuals can't be given to society: education, parenthood.
470. The secret to being a bore is to tell everything.  ~ Voltaire  
471. The state of nature is not peace, but of war.  ~ Kant  
472. The stupid neither forgive nor forget.  The naïve forgive and forget.  The wise forgive but do not forget.    ~ Thomas Szasz 
473. The sum of our knowledge is not like what the mathematicians call a convergent series … where the study of a few terms may give the general properties of the whole.  ~ George Thomson 
474. The superior man is distressed by his lack of ability  ~ Confuscious  
475. The test of man or woman’s breeding is how they behave in a quarrel  ~ George Bernard Shaw
476. The theory of the Communists may be summed up in the single sentence: the abolition of private property.  ~ Karl Marx 
477. The thing that we call failure is not the falling down, but the staying down  ~ Mary Pickford 
478. The thing you are most certain of, that your consciousness exists, you cannot prove.  ~
479. The thruth is that there is no terror untempered by some great moral idea.  ~ Jean-Luc Godard 
480. The ultimate result of shielding men from the effects of folly is to fill the world with fools.  ~ Herbert Spenser 
481. The ultimate test of our integrity is not how we deal with those whom we agree but how we deal with those who we do not agree.  ~ Nathaniel Branden 
482. The value of an ideal has nothing whatever to do with the sincerity of the man who expresses it.  ~ Oscar Wilde  
483. The value of marriage is not that adults produce children, but that children produce adults.  ~ Peter DeVries 
484. The very best thing you can do for the whole world is to make the most of yourself.  ~ Wallace Wattles
485. The virtue of simplicity is to avoid affectation.   
486. The wise learn many things from their foes.  ~ Aristophanes  
487. The wise man will want to be with him who is better than himself.  ~ Aristotle  
488. The world has always been the same; and there is always as much good fortune as bad in it.  ~ Machiavelli  
489. The world’s great men have not commonly been great scholars, or great scholars great men  ~ Oliver Holmes  
490. The worst hatred is that which has superseded deep love.  ~ Euripides  
491. The young always have the same problem—how to rebel and conform at the same time.  They have now solved this by defying their parents and copying one another.  ~ Quentin Crisp 
492. Theory is an explicit set of instructions for building a mechanical imitation system   
493. Theory is knowledge that doesn't work. Practice is when everything works and you don't know why.  ~ Hermann Hesse 
494. There are some things so stupid that only an intellectual can believe them  ~ George Orwell 
495. There are three reasons for punishment: deterrence, retribution, and incapacitation.   
496. There are too many people who imagine that there is something sophisticated about always believing the best of those who hate your country, and the worst of those who defend it.  ~ Margare Thatcher 
497. There is a condition worse that blindness, and that is, seeing something that isn't there  ~ L Ron Hubbard  
498. There is much pleasure to be gained from useless knowledge.  ~ Bertrand Russell 
499. There is no great genius without a mixture of madness.   
500. There is no method but to be very intelligent.  ~ TS Eliot 
501. There is nothing more unequal than the equal treatment of unequal people.   ~ Thomas Jefferson 
502. There is nothing so absurd but some philosopher has not said it.  ~ Cicero  
503. There is only one good, that is knowledge; there is only one evil, that is ignorance.  ~ Aristotle  
504. There is simple ignorance, which is the source of lighter offenses, and double ignorance, which is accompanied by a conceit of wisdom.  ~ Aristotle  
505. Things are never so bad that they can’t be made worse.  ~ Humphrey Bogart 
506. Things exist before their idea does: the nation formed before the concept of a nation.     
507. Think of your audience as intelligent but impatient readers  ~
508. This food-and-shelter theory concerning man's efforts is without insight. The desire for praise is more imperative than the desire for food and shelter  ~ Hoffer
509. Those good at war aren't good at peace, and those good at peace aren't good at war.  ~ Winston Churchill 
510. Those who see their lives as spoiled and wasted crave equality and fraternity more than they do freedom  ~ Hoffer
511. Those with the best ideas are right about the most important things, not about the most things, or the most complicated things.    ~
512. Three ideas are central to science, that of equilibrium, cause and effect, and chance   
513. To be able to concentrate for a considerable time is essential to difficult achievement.  ~ Bertrand Russell 
514. To be engaged in a desperate struggle for food and shelter is to be wholly free from a sense of futility  ~ Hoffer
515. To be fertile in hypotheses is the first perquisite of creativity and to be willing to throw them away the moment experience contradicts them is the next.  ~ William James 
516. To be great is to be misunderstood.  ~ RalphWaldoEmerson,  
517. To be happy, we must not be too concerned with others  ~ Albert Camus 
518. To be liked tell people things about themselves that they would like to be true.  ~
519. To be wronged is nothing unless you continue to remember it.  ~ Confucius  
520. To change and to improve are two different things.  ~ Germanproverb  
521. To disagree with three-fourths of the British public is one of the first requisites of sanity.  ~ Oscar Wilde 
522. To do nothing is sometimes a good remedy.  ~ Hippocrates  
523. To do something, say something, see something, before anybody else—these are the things that confer a pleasure compared with which other pleasures are tame and commonplace, other ecstasies cheap and trivial.  Lifetimes of ecstasy crowded into a single moment.  ~ Mark Twain 
524. To escape criticism  do nothing, say nothing, be nothing.   ~ Elbert Hubbard 
525. To generalize is to be an idiot.  To particularize alone is a distinction of merit.  ~ Blake  
526. To inspire kids make them feel special, part of a brave corps on a secret, impossible mission.  ~
527. To kill an error is as good a service as, and sometimes even better than, the establishing of a new truth or fact.  ~ Charles Darwin 
528. To make an improvement in the state of the art, one has to know the state of the art.  This is inevitably detail oriented work.     
529. To many, total abstinence is easier than total moderation.  ~ St.Augustine at Hippo
530. To recognize the significant in the factual is wisdom.  ~
531. To those who think, life is a comedy, to those who feel, life is a tragedy  ~
532. To Unlearn is as hard as to Learn  ~ Aristotle Politics B4
533. Truth is what will be steadily borne out by subsequent experience  ~ William James 
534. Truth springs from argument among friends  ~ David Hume 
535. Ugly things are made by those who strive to make something beautiful, and beautiful things are made by those who strive to make something useful  ~ Oscar Wilde 
536. Unless a man has talents to make something of himself, freedom is an irksome burden  ~ Hoffer
537. Use nouns and verbs, not adjectives and adverbs   
538. Use the phrase 'it's a bit like… ' in speeches   
539. We all have the strength to endure the misfortunes of others.  ~ La Rochefoucauld  
540. We all start in ignorance and aim for virtue   
541. We are all motivated by a keen desire for praise, and the better a man is, the more he is inspired by glory.  ~ Cicero  
542. We are less hurt by the contempt of fools than by the lukewarm approval of men of intelligence  ~ Luc de Clapeirs deVauvenargues
543. We are making forecasts with bad numbers, but bad numbers are all we've got.  ~ Michael Penjer 
544. We are ready to die for an opinion but not for a fact  ~ Hoffer
545. We are what we repeatedly do. Character is a habit.  ~
546. We ask advice, but we mean approval  ~ CC Colton 
547. We believe a scientist because he can substantiate his remarks, not because he is eloquent and forcible in his enunciation.  In fact, we distrust him when he seems to be influencing us by his manner.  ~ I.A. Richards  
548. We believe in axioms or assumptions, not because they are deduced from the real world, but because the consequences they imply fit the real world.  ~
549. We excuse the ignorant; we forgive the wicked  ~
550. We have a tendency to assume people are a unity, and thus good people all good, etc.  But the fact that Hitler was good to dogs and children isn’t a paradox.    ~ Richard Posner 
551. We have so much ill fortune as inconstancy, or so much bad purpose as folly, we are not so full of evil as we are of inanity; we are not so wretched as we are base  ~ Montaigne  
552. We improve ourselves by victories over ourself.  There must be contests, and you must win.  ~ Edward Gibbon 
553. We prove what we want to prove, and the real difficulty is to know what we want to prove.  ~ Emile Chartier 
554. We receive three educations, one from our parents, one from our schoolmasters, and one from the world.  The third contradicts all that the first two teach us.  ~ Charles Louis de Secondate
555. We took risks. We knew we took them. Things have come out against us. We have no cause for complaint.   
556. What is confidence?  Ignorance, ignorance, sheer ignorance – you know there’s no confidence to equal it. It’s only when you know something about a profession, I think, that you’re timid or careful.  ~ Orson Wells 
557. What is fruitful alone is true.  ~ Goethe  
558. What is said when drunk has been thought out beforehand.  ~ Flemish proverb 
559. What makes a principle a principle is our willingness to apply it to our own disadvantage.   
560. What was hard to endure is sweet to recall  ~ European Proverb 
561. Whatever enlarges hope will exalt courage.  ~ Samuel Johnson 
562. Whatever you do, you need courage.  Whatever course you decide upon, there is always someone to tell you that you are wrong.  There are always difficulties arising which tempt you to believe that your critics are right.  To map out a course of action and follow it to the end, requires some of the same courage a soldier needs.    ~ Ralph Waldo Emerson
563. When a debater’s point is not impressive, he brings forth many arguments,    ~ Talmud  
564. When a woman isn't beautiful, people tell her. "You have lovely eyes, you have lovely hair. “  ~ Anton Chekhov 
565. When choosing a boss, being competent is more important than being nice.     
566. When making a point, don’t feel compelled to say everything you know about something.  It just obscures your point.  ~
567. When people are free to do as we please, they usually imitate each other  ~ Hoffer
568. When subjects felt happy, there is a decrease of activity in the regions of the cerebral cortex that are committed to forethought and planning.    ~
569. When we feel that we lack whatever is needed to secure someone else’s esteem, we are very close to hating him  ~ Luc de Clapeirs de Vauvenargues
570. When you have nothing to say, say nothing  ~ Charles Colton 
571. When you become senile, you won't know it  ~ Bill Cosby 
572. Whenever a subject takes seriously definitions and origins, it is involved in blather, not progress.  ~
573. Where freedom is real, equality is the passion of the masses. Where equality is real, freedom is the passion of a small minority  ~ Hoffer
574. Whereas wisdom favors the probabilities, folly favors only the possibilities.  ~ Gracian Balthasar 
575. Whoever fights monsters should see to it that in the process he does not become a monster.  ~ Nietsche  
576. Wide, cohesive lack of consistency is a great strength, because it can then be used to prove anything right, something found in all creeds.   
577. Woe unto you, when all men speak well of you!  ~ Luke,6:26  
578. Worldviews are more a mental security blanket than a serious effort to understand the world  ~ Bryan Caplan 
579. Wrong hypotheses, rightly worked from, have produced more useful results than unguided observations.    ~ Augustus De Morgan  
580. You can pretend to be serious; you can’t pretend to be witty  ~ Sacha Guitry 
581. You can’t be brave if you’ve only had wonderful things happen to you.  ~ Mary Tyler Moore
582. You can’t build a reputation on what you are going to do.  ~ Henry Ford 
583. You cannot teach a man anything, you can only help him to find it for himself.  ~ Galileo Galilei 
584. You don't get somebody to like you by doing them a favor. That only tends to build resentment over the fact that they are needy and you are not. No, you ask them to do you a favor.  ~ Ben Franklin
585. You forgive others mainly for the selfish reason of moving on   
586. You have enemies?  Good.  That means you have stood up for something  ~ Churchill  
587. You have the right to your own opinion, not your own facts   
588. You need data more than theory to destroy bad theories.     
589. You only live once, but if you do it right, once is enough.  ~ Mae West 
590. You wouldn’t care what people think about you if you knew how little they think about you   
591. Your wisdom should be without pride.    ~ Augustine  
592. You've got to jump off cliffs all the time and build your wings on the way down.  ~ Ray Bradbury 
593. The principle difference between heaven and hell is the company you keep there.   ~ Lois Bujold
594. People have a hard time with things that are too complicated, and things that are too simple