Chess NM. Realize gains in real life. Figuring out where to place Pascal's wager on the roulette table. Malt Vault linked below
Joined August 2014
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On modernity, enjoying life, and Bowling for Soup as it relates to p(doom). (As an aside, I no longer fix random typos or slight overuses of turns of phrase, just so you don't have to run my writing through Pangram.)
maltliquidity.com/p/melon-co…
In the event of outcome uncertainty, the true probability of each outcome is simply a division of the outcome space
You don't know the true probability and neither do I. There is no correct probability, just a market implied one. You aren't running a repeated experiment whose outcome can be observed to count the number of successful trials. The reality is Polymarket forecasts closely align with actual outcomes across all probability buckets both 12 hours out and 4 hours out. This argument makes no sense and I can't believe I have seen multiple accounts parrot it. By this same logic, election models are similarly guess work because remember this? Note it was last updated the literal day of the 2016 presidential election.
Here's a hypothetical:
what percentage of the electorate would be eliminated if they had to score 80% on a simple, 10 question test converting fractions to percentages and back again?
The actual way to trade around an election only matters if you have assets (capital, IP, or otherwise) to protect:
You tax optimize your life, move to friendly jurisdictions, and make correlated trades on modelable outcomes based on power shifting.
Individual races, if they’re not obvious, is like placing bets on horses. There’s probably some voodoo that works, but you’re not gonna find it in publicly available polls, blogs, and news
The entire point that many traders, financiers, and math types have made is that a floating probability on an n=1 event is inherently unfalsifiable and amounts to nonsense.
What you’re actually modeling is a binary option, which wouldn’t be delta sensitive at all until about a week out. The entire industry is just circlejerk marketing reality TV for people who don’t actually have capital stakes in the outcomes, bc the methodology that anyone with skin in the game uses is significantly different.
(And yes, I originally got this from Taleb in 2017, and have written about it many times.)
The entire point that many traders, financiers, and math types have made is that a floating probability on an n=1 event is inherently unfalsifiable and amounts to nonsense.
What you’re actually modeling is a binary option, which wouldn’t be delta sensitive at all until about a week out. The entire industry is just circlejerk marketing reality TV for people who don’t actually have capital stakes in the outcomes, bc the methodology that anyone with skin in the game uses is significantly different.
(And yes, I originally got this from Taleb in 2017, and have written about it many times.)
you can also summarize this old post of mine, maltliquidity.com/p/parasoci… and perhaps explain my disdain for binary options trading, as it’s either a speed game when there’s enough data to know the outcome, or a complete gamble. Essentially the only way to win is insider info
It’s funny, I’ve been actually ranting about this for a decade now, to the point where I’ve provably traded around a half dozen election cycles.
If you bet on the end state of the binary outcome, you are either gambling or getting caught in a speed race to the obvious outcome.
The proper way to trade election markets is mean reversion up until the point where delta sensitivity and time decay accelerate in an option (which I highlight in one of my posts as roughly 2-3 weeks out.)
Ven retweeted
It is noteworthy that Dimon found it necessary to even publicly make this point.
In 1995, when I started in finance...or 2000...or 2005... or 2010...or even 2015, Dimon would have never had to say this because it would've been as redundant as saying "the sun rises in the east."
Jamie Dimon to a country that pulled its gold out of New York: you have three armies within 400 miles, while gold in America is protected by two oceans and the US military
“If we have the strongest military in the world and the strongest economy in the world, we will be the preeminent reserve currency. It is those two things.”
“I was in a country somewhere in the Middle East, and also in Europe, and the people said, we took our gold out of the vaults in New York City and moved it to our country. You know what I said to him? I said, you have three armies within 400 miles who can come take your gold.”
“That’s the real world. You’re not thinking clearly about safety. That gold is protected by the Atlantic, the Pacific, the United States military, the rule of law.”
“But if we are not the preeminent military and economy, you will see our reserve status come down.”
What I have concluded is that AGI is a function of being unable to resist feeding the models your own personal context window. Why the smartest people, which correlates with the best memories, struggle with the consciousness question is precisely because spiky intelligence is the only thing that can match us on an instantaneous time frame. Our memory works against us, our humanity attempts to ascribe meaning, rather than the reason and internal mathematics that brought us to this place, to the output.
Floating point linear algebra bullshit doesn’t quite grasp it. Life is a function of experiencing the concept of re-deriving eternal conclusions in your own personal context, and then a shock to the system when you realize nothing is particularly unique about what you think. The true value LLMs have created, and that the AI future bestows, is creating a properly accepting environment of right tail neurodivergent individuals.
“Everything happens for a reason” has a tacit addendum of “you’re not privy to all these reasons.”
Trading well, in particular, has a way of compounding hubris in your own brain. That because you’re profitable, and that you want it to be a function of being smart, and people want to know what you think about things as a result, that you have some unique read on the chaos machine that other people don’t.
And there are ways to ground yourself. The inverse is the way to actually survive over time. You don’t bet on right, you bet on not being wrong. But part of aging — and why I really relate to the “coming of age” aspect in this post — is that there are funny little ways you’re taken down a peg when you think you have it figured out. And OP undersells how brutally Job is told that he has no clue what he’s talking about. That just because you can generate profit out of the machine, it doesn’t mean you actually understand the whole system. It is simply too incomprehensible for us to know, and it will blow up in your face and destroy your mood at one point or another.
There’s something kind of whimsical about the algorithm delivering exactly what you need to read at any given time. I’ve been complaining about a lack of reading material, productive conversations, and latent psychosis everywhere around me for months, how reality is just vices and corruption everywhere around me. Much like the algorithm only gives you what you actually want, life will give you exactly what you construct around it as well. I complain about sports gambling, yet I find utility in the system when it comes to making profit. I complain about the financialization of everything, yet my entire life is built around interpreting this system. Part of what you learn through sitting down and reading the book once in a while is that you can’t extrapolate conclusions when there is simply never going to be enough data to ever give you a clear perspective. And that doesn’t mean there’s some magical reset button, or fix everything button, but simply being aware that your moods are not necessarily your fault and belief is the only thing that gets you through anything is a large part of not being consumed by the chaos machine.
Nihilism and psychosis go hand in hand — if psychosis is a “break” with reality, then one can only assume that the break is supposed to deliver some form of thinking that pulls one out of the doom spiral. So much of what we see in the world is people confidently proclaiming what is going to happen to the world, and, man, it was a real benefit of the algo to push the book of Job in front of me while trying to make sense out of what is real and what isn’t in this day and age.
Dario is a genius, undoubtedly so, but I think the path of certain types of genius requires a certain acceptance that delusions in reality are ordered, and that the game is not supposed to be won on our timeline, and a lot of the Anthropic belief system relies on convincing everyone that everyone else is wrong, when what is, is.
This game is a lot longer than this year, or 40-45, or even our lifetime, and if you truly believed in an AGI, accepting it doesn’t have to be a hardwired race of market domination and capital accrual is probably the best chance you have at winning, and that would require bundling with Elon, who I truly feel is the modern day Icarus.
But maybe I’ve just been reading too much, who knows.
David Foster Wallace correctly saw there was no way out of the irony trap, and, well.
Europe is notoriously insufferable about this, depending on which country you’re in. Either you get nickel and dimed nonstop for simply desiring a drink with your food or ketchup for your fries, or you choose a cheaper, subpar experience of a simple customer service standard.
Europe is entirely a product of mild annoyances, I really don’t get why people travel there outside of going to enjoy specifically the high end experiences (which are incredible, of course)
Indeed, all the alpha is knowing where the actual risk profile lies versus the consensus perception.
Financialization is a value add, but the structures get incredibly complex and very few people intuitively get it.
Hence why the risk disclosure is so important
This quoted post is unavailable.
Some old posts on Enron:
xitter.cf/edgefills/status/18403…
A big, big problem as you approach 30 (and the wedding debates in general) is people using social norms to justify spending out of your bank balance.
Even as someone who can afford to make everything and can manipulate my schedule around as needed, I’ve been run ragged with the nonstop stream of events to attend. I surmised after 30 and weddings, I could cut things down as needed. And yet, by the end of the year, I’ve totally tanked my battery and have no real desire to engage with almost everyone who made their unique event sound unmissable.
You will not regret looking selfish, when it’s really your own interest, in the face of people wanting you to subsidize their event and day. If it isn’t an obvious inclusion in your schedule, odds are it’s simply not something aligning with your life or priorities anyway. You’re allowed to state preferences, especially when you have to pay for things. And I’ve made this mistake more than enough over the past few years, and really, I just want my money and time back.
My friend wants to plan a couples, no-kids weekend getaway, splitting the cost of a large AirBNB, in January for her 30th birthday. I really do not love this idea (husband is mortified), neither to spend the money nor to get someone to take the toddler for 3 days. It would be a 2.5 hour drive away for us, too, so it’s not like we’re close if something happens. I haven’t been away from him for even 1 night yet and he still just seems so young! It would be very hard to leave him for that long.
Am I just a party pooper who needs to get over it? Genuine question. Like I actually need advice here guys
Admittedly, if I agreed with Anthropic’s exec team, I’d approve a voting structure that insulates from passive giants and index liquidity holding control over novel company applications.
But I, like many others who have the ability to allocate and strong opinions, also find this an impossible governance barrier to ignore.
Any public valuation will be entirely dependent on how much the governance structure is trusted.
“Everything happens for a reason” has a tacit addendum of “you’re not privy to all these reasons.”
Trading well, in particular, has a way of compounding hubris in your own brain. That because you’re profitable, and that you want it to be a function of being smart, and people want to know what you think about things as a result, that you have some unique read on the chaos machine that other people don’t.
And there are ways to ground yourself. The inverse is the way to actually survive over time. You don’t bet on right, you bet on not being wrong. But part of aging — and why I really relate to the “coming of age” aspect in this post — is that there are funny little ways you’re taken down a peg when you think you have it figured out. And OP undersells how brutally Job is told that he has no clue what he’s talking about. That just because you can generate profit out of the machine, it doesn’t mean you actually understand the whole system. It is simply too incomprehensible for us to know, and it will blow up in your face and destroy your mood at one point or another.
There’s something kind of whimsical about the algorithm delivering exactly what you need to read at any given time. I’ve been complaining about a lack of reading material, productive conversations, and latent psychosis everywhere around me for months, how reality is just vices and corruption everywhere around me. Much like the algorithm only gives you what you actually want, life will give you exactly what you construct around it as well. I complain about sports gambling, yet I find utility in the system when it comes to making profit. I complain about the financialization of everything, yet my entire life is built around interpreting this system. Part of what you learn through sitting down and reading the book once in a while is that you can’t extrapolate conclusions when there is simply never going to be enough data to ever give you a clear perspective. And that doesn’t mean there’s some magical reset button, or fix everything button, but simply being aware that your moods are not necessarily your fault and belief is the only thing that gets you through anything is a large part of not being consumed by the chaos machine.
Nihilism and psychosis go hand in hand — if psychosis is a “break” with reality, then one can only assume that the break is supposed to deliver some form of thinking that pulls one out of the doom spiral. So much of what we see in the world is people confidently proclaiming what is going to happen to the world, and, man, it was a real benefit of the algo to push the book of Job in front of me while trying to make sense out of what is real and what isn’t in this day and age.
I love Job for many reasons, but mainly because it does a very clever jujitsu move on you as a reader. You start out thinking you've seen behind the curtain -- the scene in heaven w/ God & Satan making bets about Job.
So then after Job's trials, as his four friends come visit him to give their theories of why Job is in the predicament he's in, you've got your own little theory based on the opening scene, right? You're essentially the fifth friend who has their own read of the situation.
Then God comes in at the end and is like, "all your theories are wrong. None of you were there at The Beginning, and none of you know enough of the real backstory to really understand what's happening here. None of you can actually tame the chaos monster and organize all the things into a coherent whole. Only I can do that."
You, the reader, think God is calling out Job and maybe his four friends. But He's calling you out, too. You, the reader, are in the same boat as Job and his four friends. You think you have enough info about what is going on with Job because you saw the opening scene in heaven, but actually you're just as clueless and limited as the story's characters.
So the opener of the story is actually a trap, and the conclusion springs it on you. You think you have the backstory via some special perspective, but you're just like all the other confused people in the story. You don't really know and you're not ever going to know, either.
Job's lesson is that not only does God not owe you a theodicy (so stop expecting one), but even if you could see into the unseen realm you still wouldn't have a clue. You're never going to have enough information to put the whole, chaotic picture together in some satisfactory way. It's never going to all hang together in a coherent way that makes sense.
In some ways, I think Job is a coming of age story. This is one of things you learn in midlife -- that the pieces actually didn't ever fit together like you once thought they did, and the fact that it used to make coherent sense to you says more about who you were in that phase of life than it does about any larger meaning behind the events themselves.
The Job story is literally yelling at you that you cannot organize the chaos of life events into a coherent "why" -- it's simply beyond you. That you once thought you could was the arrogance of youth. God is actually the only one strong enough to tame the chaos monster & split its carcass into a neat, ordered, coherent structure.
This isn't the answer anyone wants, but it's the only answer that's telling you like it is.
Anyway, Job is a great book. The haters are wrong. I like it because I don't like to be lied to.