Evolution

Definitions

Evolution in biology can be defined as ”A change in the gene pool of a population from generation to generation by mutation, natural selection, and genetic drift.” You can also have a general definition for evolution, such as ”A process of gradual development in a particular situation or thing over a period of time.”

Evolution is a gradual, random, and slow process most of the time

All the living things started from a birth of a self-copying system with some kind of basic, heritable mutation. Mutations are random errors in copying. Your genes replicate themselves slowly and gradually through the generations. Gradualness is the key feature of evolution. It moves step-by-step from one stage to next. These moves compound in a very long time This process creates new structures and behaviors. And it has no reason or goal in mind. Humans have evolved from simple cells to conscious animals in billions of years. This process adapts to changes by changing itself.

All mutations have an element of luck. Genes maximize their own survival. Genetic effects have their own time and place. These effects may have to be changed by working together with other genes. Together they create chemical environments in our cells. Genes have usually many effects. Some of them are beneficial and most of them bad. Beneficial effects are likely happening later than good ones. Species change through these effects all the time, but slowly. You have to consider this slow speed of change, when you think about how human beings behave. For example, our brains and bodies have changed very little in the last 10,000 years. The environment around us has changed a lot more.

Evolution is a self-organizing system

Evolution happens by adding new strucures, feedback loops, or rules. This ability is the strongest form of a system resilience. Self-organization has rules. They tell the system itself where, how and what can be changed by adding or subtracting something from the system and the under what conditions these changes can happen. Biological evolution has simple set of rules. It has created a complex world with wide variety of species. DNA´s genetic code has four different letters, combined into words with three letters. This pattern and the rules for copying and rearranging it has not been changed in billions of years. These rules have created a variety of failed and successful creatures.

DNA is an evolutionary raw material. It is a stock of variable information and a means for experimentation. It is used for selecting and testing new patterns. Spontaneous mutation creates variety for selecting raw aterial. Changes in the environment are testing mechanisms that determine which individuals survive or reproduce. For technological evolution, the raw material is the understanding of the science. The source of variation is creativity and the selection mechanism are the organizations that fund research or human needs.

Survival of the fittest is not the best definition for evolution

There are some misunderstandings about the evolution. The most common one is that the fittest individuals always have the best chances to survive and thrive through time. You should talk more about the most adaptable and co-operative individuals. Fastest, strongest and biggest do not always cope with changes in the environment. Top-Down hierarchies or bigger structures have problems in coping with change. The faster the changes, the bigger the problems for these structures. Biological evolution is full of random bottom-up processes.

You talk about all the self-replicating genes that are always fighting for the available resources. Genes that are more efficient of getting themselves copied tend to replace the less efficient genes. In the long run, your DNAs become full of well-surviving genes. These genes are best for surviving in the average environment of their species. When the average environment changes, the surviving genes change too. In DNA´s point of view, the average environment is the body, in which DNA visits for a body´s lifetime. The other genes are maybe the most important aspect of the environment. They are not the only things concerning on the environment that matter. For example geographical separation can create different species, because conditions change by the changing geographical location. When the conditions in the environment change fast, we can talk about disruption. 

Adaptability is very important for the non-living things like companies. Their environments are in states of constant change. These changes are many times completely random. Many great inventions like penicillin have been discovered accidentally. Sometimes best solutions for the problem do not win. VHS videos beat Beta videos even though the latter one was the better technology. These examples are all around you. Many researchers have no way of knowing if they ever find anything useful. Companies that suffer from these unexpected discoveries can be the fittest before them and after these discoveries some of these companies even go bankrupt. These things happen because companies couldn´t adapt to changing environments because they are still applying the rules that worked before to the new situation.

This text is just the tip of the ice-berg about evolution. Evolution is all around us and it effects on every living thing on earth. I hope I have covered some basics in an understandable way. Please tell me, if I have failed.

Sources:

Thinking in Systems, Donella H: Meadows
River Out of Eden, Richard Dawkins
From Bacteria to Bach and Back, Daniel Dennett
The Evolution of Everything, Matt Ridley

-TT

Checklists

Definitions

Checklist can be defined as: ”A list of all the things that you need to do, information that you need to find out, or things that you need to take somewhere, which you make sure in order to ensure that you don´t forget anything.”

Checklists help us to manage complexity

You and I live in the era, in which complexity has overcome our ability to remember all the necessary things for doing something which requires expertise. You have a natural ability to deal with approximately ten pieces of information. Bigger amount of information exceeds the capacity of your working memory. Simplifying things can help us, but sometimes things are too complex and the consequences too severe. For example, pilots need to have checklists for take-off, flight, landing and taxiing. The cost of failing to memorize all the items from the checklists could be a fatal accident with hundreds of people dying. Routines are easily forgotten under the stress or boredom. They can also be skipped, even though you remember them, because their importance can be dismissed. Checklists protect you from failures like these. My problem with a checklists are that I forget to have them with me or I forget to use them while I have them. I rely too much on my memory.

Creating a checklist

You need to make decisions concerning on the checklist you are creating. You need to define a situation where it is used. You need to decide a time a place and conditions to use and create it. For example, a shopping list is created at home, going through a refrigerator and a freezer to find out what is missing, used as soon as you get inside of the store by striking through all the items until they are finished. You must also decide whether you want to have a do-confirm checklist, in which you perform the action first and then see the checklist and overwrite all the performed actions from the checklist. You may want to have a read-do checklist, in which you first read the item from the checklist and then perform the action. Then, after the action you overwrite the item from the checklist. Choosing the right way of using the list depends on the situation.

You also need to choose which items belong to the checklist and how it looks like. Simplicity and avoiding the most crucial mistakes are the most important things. Checklists shouldn´t be too long. You shouldn´t have more than ten items, especially, when the failure to go through them could be fatal. You should keep the list shorter by focusing the most lethal items. These are the steps that are easiest to overlook and the most dangerous to skip. The reason for this is that your attention starts easily to disrupt, when the checklist takes too long to go through. It is better to have many checklists in that case. A checklist should be no longer than one page. It shouldn´t have any waste or unnecessary colors and can have both uppercase and lowercase letters.

Using and creating a checklist is not a fast and desirable routine

Without testing the checklist in the real world, it will probably fail to fulfill its purpose. Finding an optimal checklist for the purpose you create requires trial and error. You need to study the failures the first versions of checklists provide. You have them optimize it gradually. Start with one change. When you see it work make another change until you are done. You will probably need to continuously improve it. When things change, you need to change the checklist. A checklist is only a tool for helping you. If it doesn´t help, refine it. If you cannot make it work, forget it.

It also takes time to use the checklist. You must create a habit to use the list first. This takes time from weeks to months depending on the task and how often you have done things differently in similar situations. Most people do not like checklists. They make you feel like you are like a child who needs continuous help. They are embarrassing to some extent. Nobody wants to show their checklists to others. You should see it differently. Checklists help you to get all the routines away from your mind. And you can start concentrating on the things that require deep thinking. You have to accept that your ability to remember all the things is restricted. Checklists help you. See them as a tool, instead of humiliation or a sign of weakness.

I have a simple list of psychological biases that have effects on me, when I am making bigger decisions. It looks like this:

• Egocentricity
• Association bias
• Availability bias
• Authority bias
• Social proof
• Scarcity bias

Sources:

Checklist Manifesto, Atul Gawande

Poor Charlie´s Almanack, Peter Kaufman, Charles T. Munger

Have a nice week!

-TT

Inversion

Definitions

Inversion can be defined as ”Something that is the opposite of what it was before” or as ”A reversal of position, order, form, or relationship”.

Inversion is a powerful problem-solving tool

When you are confronting a problem, you can many times get an easier answer by inverting the problem. For example, calculating probabilities of certain events are easier by calculating them not happening. Many times you save time too. There are also many other math problems that are easier to solve with inversion.

There are many other problems to take inversion into advantage. One of the best ways to use it is to ask yourself: "what we shouldn´t do?" Many strategies focus on what to do and forget maybe even more important aspect of what not to do. Successful people should ask themselves ”What shouldn´t I do to stay successful?” instead of asking ”What I should do to stay successful?” They should also ask ”What I shouldn´t do the same way as before?” instead of asking ”What I should do the same way as before?” in order to become more successful. It is also easier to think about what not to do than what to do. Failures leave more clues. Success can be a consequence of some small change in your daily habits. Basically, you learn more by thinking about what went wrong, instead of thinking what you did right. It is even better to learn from other people´s mistakes.

Successful investing is more about avoiding catastrophical losses than getting this right. Avoiding all the insanities of other investors help you to get better investment returns. When you lose less, you have a possibility to gain more capital. Some of the craziest things investors do can destroy an investing career. Avoiding them is a requirement for investing success. You can also use inversion in investing, by trying to find as much disconfirming evidence as possible about your best investing ideas. By doing this, you will probably not invest too much money to them. And you can even gain an insight that the idea is as good as you think it is.

You should also ask ourself, ”What I don´t know?” You get more into trouble about the things you don´t know than things you know. You should not focus on the things you don´t understand or you don´t have enough information about. One thing you usually forget is that you cannot predict the future. It is always the thing you don´t really know. You can make predictions, but you should understand that your success is always uncertain. Instead of predicting, you should think about the probabilities and accept the uncertainty.

Thinking about the worse case scenario instead of success

You should also think about what are the consequences of failing. If you are considering some big changes in your life, you should also think about the worst case scenarios for them. For example, trying to do something else than you have done before may not have many bad consequences. This is especially true, when your ordinary life is not very satisfactory. By figuring out what are the worst things that could happen, you may free yourself from the agony of not taking an action. You can see that failing is not a very bad option, compared to not doing anything.

For example, learning a latticework of mental models with information from most of the biggest scientific disciplines by studying the works of the all time greatest practitioners don´have many bad consequences. It may cost you some money and time. There are always some opportunity costs. You get better understanding of the world and people by developing our latticework of mental models. The worst thing that can happen is learning the wrong things. And this is added to the loss of money and time. When you focus on finding the best sources for learning the mental models, the risk of learning from wrong sources is low. In my opinion, the opportunity costs of learning the new things from other disciplines than our field of expertise are low.

Sources:

Poor Charlie´s Almanack, Peter Kaufman, Charles T. Munger,

Tools of the Titans, Tim Ferriss

Flip it, Michael Heppell

-TT