How some models intertwine and interact, in short part 2

This text is a second part of two-part text that shows how models interact and intertwine. It is a short education for the relationships of the models. This text helps you to edit your latticework of mental models when you read the text with deep thought. Be ready to disagree with me and discard any failed assumptions I might have. Enjoy the text

System structures like interconnections set out the paths of least resistance. For example, politicians do what they promise to people who finance them instead of what they promise to voters. Politicians cannot get elected without financiers, but voters matter less. Evolution is a complex adaptive system which corrects itself through the path of least resistance. The more competitive the field of expertise, the better systems you need to have an edge. Strategy is not only a system, its execution requires several of them.

Feedback loops work in increasing the odds of correct predictions. Successful predictions require continuous processes with balancing loops which produce additional information to improve last predictions. The evolution works through continuous feedback loops. During the lifetime of species, feedback loops must compound the best effects of genes first, and the worst effects last.

Understanding the daily cycle helps in motivating people. Motivation is strongest during the morning and fades toward the evening. Understanding cycles gives an edge in many fields of expertise. Most people have no clue about the existence of a long-term socioeconomic cycle, and they do not understand there are different seasons.

Better skills produce simplicity. Useless energy-consumption diminishes. Better skills help you produce faster reactions when they are necessary. Many skills have natural cycles. Understanding them accelerates learning. Which gives better odds to create an edge. Feedback loops in performing measurable skills work with adjusting your results of previous performance to next one.

Motivation or its absence are reactions to internal or external factors. It can compound after successful repetitions during the practice. Motivation has not only daily cycles, it fluctuates in shorter ones. When the edge becomes abundant, motivation to maintain it can disappear. Motivating is easier when you use psychological tendencies as leverages.

Deliberate practice requires simplicity of the process. It focuses on improving one thing at a time and discard others. Performer needs to a feedback loop between him and the skilled authority that helps him react to flaws in action sequences during practice. Deliberate practice requires a strategy for a long-term development of the performer.

Creating an edge requires a permutation of several factors including talent transferred through genes and most components of the deliberate practice. Edge does not create compounding effects unless people cannot notice the contrast between the skills of a performer with an edge and one without it.

Evolution is a chain reaction which has developed living beings throughout billions of years. It improves biological traits with a minuscule compounding rate. Cultural evolution requires a critical mass of people to develop their norms and actions with mutual understanding. Most psychological biases are the products of slowly developing brains and faster developing environments.

Figuring out opportunity costs of each added option after their optimal number compounds the unwanted effects of the decision process. The same process requires skill when it bases on facts you cannot easily measure.

Working psychological tendencies are reactions to stimuli. They can create edges with skilled exploitation. You learn most of them from authority figures who provide them on purpose or accidentally from random stimuli. Skilled execution of a strategy requires understanding psychological tendencies of each stakeholder.

Excessive self-regard is one of the most common reasons you lose an edge. You forget to be humble and become overconfident about your skills compared to other people. The greater the edge becomes, the higher the odds that your ego grows too much. It is also one of the most common weaknesses smart people have.

The availability of simplified actions others execute helps you to eliminate complexity. Availability of the skilled actions affects your chances to become more skilled during moments without practice. The availability of the reminders about weaknesses has to be minimal. You can improve the execution of a strategy by increasing its availability to all stakeholders.

Social groups work better when the roles in them are simple and clear. Social proof often compounds, but the rate variations are high. The rates increase when perceived authorities spread the message. Sometimes the scarcity of the message strengthens it. This happens when a tight group shares the common delusion and others are against it.

Persuasion professionals can increase need to reciprocate by increasing your path of least resistance by compounding the value of favors or gifts. The availability of other people reciprocating the favor you got, strengthens your need to do the same. When you choose from two similar authorities, your choice is one who did more favors or gave better gifts.

Authority positions imply edges, no matter whether they are real. They are often antifragile. When somebody attacks their credibility, their followers´ beliefs strengthen. Your mind can create a perception of you becoming an authority when excessive self-regard strengthens your beliefs after lots of effort to understand the topic. Authority figures in groups sometimes use invented antiauthorities to strengthen their ideology.

Scarcity of an edge offers leverage to increase its effectiveness. Scarcity is one of the strongest enemies of willpower. It destroys attention effectively. When you feel that the advice from the authority is scarce, it strengthens his status. Abundance of advice inverts the effect. The same effects apply to the scarcity and abundance of status symbols.

The contrast between the current path of least resistance and the preferable new one must often be big enough for recognition, but so small it requires minimal willpower. The contrast between authorities can make a difference in their believability. It increases the perception of importance of the stronger one and destroys the credibility of the weaker.

When your decision-making system confronts its limits and your brain loses willpower with too many decisions during the daily cycle, each added decision increases the odds of undesirable outcomes. The odds of good decisions grow when you use checklists as leverage in complex situations.

Successful strategy cannot produce too many irreversible reactions for stakeholders. Focus on your edges and weaknesses of opponents when you create a strategy for competitions. Strategies evolve when they confront obstacles in execution. Strategies need social proof and authority figures to maximize their effectiveness to stakeholders. Execution of a strategy improves when all stakeholders use the same checklists to apply shared tactics.

Checklists simplify the execution of complex actions. Their use requires willpower and rationality unless you program them to intuition. Checklist is seldom useful when a power-law event strikes. They are useful components of personal systems. Checklists have to be available to your senses and mind. Use contrast to make each item on the list more available.

How some models interact and intertwine, in short part 1

This text is a first part of two-part text that shows how models interact and intertwine. It is a short education for the relationships of the models. This text helps you to edit your latticework of mental models when you read the text with deep thought. Be ready to disagree with me and discard any failed assumptions I might have. Enjoy the text

Understanding requires seeing how models interact and intertwine. It is not enough to figure out each model by itself. I show you how few models interact and intertwine in this text. It focuses on a few direct relationships of each model. The number of combinations of models in the book is beyond the understanding of a human mind when you consider indirect effects of the models. I have limited the number of relationships of each model to a few because you learn more with figuring out them by yourself. This chapter focuses on relationships that you cannot find anywhere else in the book. This chapter helps you add some relationships between models and figure out more of them yourself. It is not for rote learning.

Data utilization, theory of constructed emotions, simplicity, and associations interact with all other models. Data utilization is a process to use the understanding of models to react to all stimuli and create the right response. Theory of constructed emotions shows you the process brain uses to create thoughts, sensations, actions, and decisions in form of concepts that are mental models. Simplicity forms guidelines to keep models as understandable as possible and increases odds to use them with the most efficient ways. Brain uses associations to establish links between all mental models. Therefore, all models are associations.

Long-term effects of reactions are often their inverted short-term effects. Inversion relates to probabilities and statistics because it makes them easier to use when certain conditions are in place. It helps you suffer less from excessive self-regard by changing the question ”what are the good points about my beliefs, facts, etc.?” to form ”what are the weaknesses of my beliefs, facts, etc.?” Inversion is a great way to produce a better strategy by starting from the end and moving to the beginning, etc.

Some parts of mental models are irreversible reactions to other models. For example, there are no power law events if the number of particles of a reaction do not reach a critical mass. Different elements of the system react to changes in one element. Chain reactions of interacting models happen. For example, there are no good high-stakes decisions without a great decision-making system in which simplifying leads to fewer options and better quality data that lead to smaller effect of psychological tendencies that can lead to better probability of the best decision.

Combinations of models often work to the same direction. You cannot have deliberate practice without motivation, an effective and fast feedback loop with skilled coach or instructor and willpower to endure with constant failures, etc. Permutations of models have similar characteristics than combinations, but they include path dependence. For example, you cannot have superb skills without the compounding effects of multiple correct repetitions.

Compounding effects do not happen without a feedback loop. Increasing inertia leads to stronger effects of compounding. Having a slight edge creates winner-take-all effects through compounding in the long term. Opportunity costs compound with increased complexity. Evolution also creates variety and extinctions through compounding effects of mutations in genes. Using leverage can increase the compounding effects.

Reaching critical mass requires inertia, compounding effects, feedback loops, and its acceleration fastens with leverage. Critical mass of repetitions is also a necessity to create the novel path of least resistance. You cannot have a latticework of models without enough of them. You cannot have an edge and use it to your advantage without the critical mass of skill.

Inertia that results from the critical mass of people, their psychological tendencies, simplified, sticky messages and the right environment, is a requirement to form enough social proof for social epidemics. Timing is crucial for components that provide inertia for social contagions. If the moment is wrong in the socio-economical long-term cycle, inertia does not have enough power.

The path of least resistance interacts tightly with some models like Inertia, critical mass, tendency to focus on the most available things, social proof, etc. When something has inertia, moving to the same direction and/or preserving the status quo are paths of least resistance. Social contagion grows naturally when it reaches critical mass and creates the path of least resistance. Your tendency to focus on what is the most available to you uses the path of least resistance. The same applies to your other psychological tendencies when the conditions are the most favorable. They often relate these conditions to the bottoms of your daily cycles.

Each decision compounds negatively after sleep against willpower toward the end of day. You need willpower to conscious creation of the path of least resistance. It fluctuates with the daily cycle, sharing its top, and slumps. High-stakes decision-making systems require willpower, and you need it to resist psychological tendencies when they are not beneficial.

Self-reinforcing feedback loops can create leverage, and self-balancing loops deleverage. You can increase the effects of leverage with higher availability. You can also get yourself to act by leveraging the power of your other psychological tendencies. You can create paths of least resistance to use levers, such as support systems. If you want to have an edge, use the leverage produced by compounded repetitions, help from other people, strong motivators, and deliberate practice. You will either have to hire a coach to create a feedback loop with instant inputs to your outputs or find how the greatest performers of all time have done things.

The probability of making the right conclusions, actions, and decisions increases with the proper use of all models in the book. The result you get depends also on randomness. Probabilities increase or decrease when the psychological tendencies affect decisions. You can use statistics to reveal your lack of skill compared to your existing beliefs. Statistics comprises useful tools to predict the evolution of genetic characteristics of the offspring.

Power law events follow the compounding rate changes of social contagions. They create results with extreme statistical distributions and unquantifiable expected payoffs. Self-reinforcing feedback loop can turn slight edges to extreme differences in results. The results apply to many things, including extinction of species.

Understanding antifragility separates skilled from lucky fools in many areas of expertise like investing. Antifragile is a characteristic of a system which gets stronger from the impacts of power law events like evolution by natural selection. Its understanding follows the extreme power law distribution in human population because most people believe that you get resiliency or robustness when you invert fragility. Strong beliefs that result from excessive self-regard are antifragile. They get stronger whenever you get evidence against them.

Strategy for Life

Most people have not created a strategy for life. It is easy to live day after day, doing things you have always done without a plan. It is time for you to create your plan. The majority of this text follows Rich Horwath´s book ”Strategy for you”. The key difference is that this strategy focuses on systems.

Lets begin from the end. Do this step alone. It is crucial to not let anyone affect it. Imagine your state of being after you have executed your strategy. Define what you want to be in terms of the four key components: mind, body, spirit, and relationships. Ask: ”What do they mean to you?” Think about your values related to these terms. For example, if you value freedom, the state of being signifies to be free. If you value health, the state of being is to be healthy, etc. Think about what your ideal life will look after you have achieved these states. Do not hold back. It is not a time to think about your chances to get the life you want. Reality checks will come later. The purpose is to start from the fundamentals.

If you cannot define what you want in terms of your values, think about the past. It is the best indicator in your deepest desires of the future state of being. What excited you then? Who was involved? After you have thought about the past, ask: ”What are things that feel great today regarding body, mind, spirit, and relationships?” If you do not know, keep a notebook or smartphone with you all the time. Write things that feel great. Eventually, you can notice and define your wanted states of being. These states are part of your strategic intent.

The next step is to define uniqueness. Find out the special understanding, skills, and personality traits you have. The best way to do this is to ask others. Ask friends and seek professional help if you can. Your ego is the worst enemy to discover why you are special. Therefore, you are not the best judge of uniqueness. Ask about the past and the present. Do the former if someone has known you for decades. Ask about your body, mind, spirit, and relationships. Ask what are different about them? Can others define your distinct style to express yourself? Your uniqueness has two components. You can have a special style to express similar actions as others or you can have special actions.

Resource allocation

It is time to focus on your resources. Lets get back to the four key components and think about the resources you allocate to them. They include time, talent, and financial assets. I will focus on time now. Once you have used it, you will never get it back. Time allocation is one of the most important tasks. If you have never found out how much time you use in a week for each action, it is time to do it.

Measure categories like sleep, work, exercise, learning, commute, relationships and parenting, spirituality, eating or preparing meals, other chores, TV, radio, and social media. There are 168 hours in the week. Finding out 150+ hours of them is enough. If you had a minute-by-minute schedule, you wasted lots of time. You could not say ”no” well enough. The highest odds are causes related to work. Modern knowledge workers are the prime examples.

Think about your major systems related to the four components and resources. Do you have any? It is likely that you have them but have not thought of them as systems. Think about their structures in terms of goals, feedback loops, interactions, etc. Anything from one to five main systems in each category is a reasonable number. Systems can interconnect many categories. Finally, think about how your major systems support the state of being you want to achieve. For example, if you want to be free, think about the systems that create your income streams. Single stream is not enough, unless you have enough money to last for decades.

SWOT analysis

A good source for the principles of SWOT-analysis is Albert Humphrey´s article in businessballs.com. Strengths and weaknesses are internal abilities. Opportunities and threats are external situations. The first two describe something you have and the second two are about future situations. Together they form a useful model to design a strategy. I prefer potential edges instead of strengths. Edges are the unique combinations of your talents. They create faster learning and higher peak potential. Weaknesses bring constraints. They complicate and slow chances to go where you want to be. Opportunities are beneficial and can help you increase odds to reach the wanted states of being. Threats have the potential to reduce odds to reach the wanted states.

You can have control over internal abilities. They include resources, understanding, internal systems, relationships, values, etc. Make shortlists of the edges with the highest potential and greatest weaknesses. Be concise, specific, and focus on causes, not results. For example, my live interactions with others are poor because I am shy.

You can influence opportunities and threats, but not control them. They include the actions of others, the supply and demand of your skills, economic situations, technological changes, etc. Quantify the odds of future situations and their expected payoffs when you list your opportunities and threats. Do not be specific. Use ranges. Think about the possible impact they have in reaching your states of being. Choose the ones with the largest effects. Deal with them in strategy. Use discovered uniqueness, resource allocation, and SWOT-analysis to create strategic visions for each component of life before you design your strategy.

Design and execution

After creating strategic visions, design strategies in terms of four key components of life. Define the current state, what you want to become, objectives, allocated resources, and vision to each strategy. Involve all stakeholders in each step. Without their approval, it is impossible to design strategies you can execute.

Start from the smallest difference between the desired result and the current situation to design the first strategy. It requires the least effort and has the highest odds of success. It creates inertia and helps you to move forward. Start from it and finish with the strategy that requires the hardest effort. Do not forget the time frames. They take years to execute. A complete change in some state of being can take up to ten years.

Objectives are a big part of the design. They focus on systems and their structures. This perspective is important because visions change. What you want today might change in a few years. Great systems can work with different states of being. The first objectives you design are crucial. Focus on new and simple systems with short time frames. Objectives with the longest time frames and highest complexity become later. After designing the first objectives, make a what-to-change list. Think about whether you have to add resources to the items in the second. A not-to have-list becomes last. It has all systems and system structures that create obstacles to execute strategies.

Each design must have a vision, current and desired states, resource allocation, objectives in the executing order, what-to-change and not-to-have lists, and time frames for execution. Most parts change during the execution. Time frames have the highest odds of change. Most people are too optimistic about them. The longer the frames and the more complex the objectives, the larger the changes. No strategy survives the whole execution. Be flexible, willing to eliminate, and change parts of the strategy when you have to.

Do not hide strategies from senses. They are hard to execute without availability. Execution also requires tactics. They are specific instructions on how you implement strategies. They are beyond this text.

Latticework for behavior change

The text below is from my book: Odds Favor the Prepared Mind. The first time each model appears, it is in bold text. It does not differ much from the texts in this blog before, but shows how much better the language and the grammar are in the book. I hope you enjoy it! 

You can divide behavior change into two components. You can create behaviors or change the existing ones. Some behaviors happen once, others more often, and some of them are consistent, repetitive sequences of actions, habits. All behaviors are chain reactions with three parts. These combinations are systems. You can apply all the chapter´s lessons to all behaviors. Behaviors are not only something you do, they can be something you discard.

Chain reactions have triggers, behaviors themselves, and motivators. You can call triggers also cues, clues, and prompts. You can call behaviors routine or actions. You can call motivators prizes or rewards. To be consistent, I will talk about trigger → behavior → motivator sequence.

First, you notice a trigger you associate with a behavior and a motivator, then you execute the behavior. Trigger is a stimulus or stimuli you can detect with senses. Behavior is the action sequence from start to finish. You can mix up motivators with the symbol value you give them. For example, motivators are not the food you eat or sweet drinks. They are emotions, hormone bursts, and feelings. Behaviors happen only when you can detect the trigger, you can execute behavior, and the motivator is strong enough to create a want to do the behavior.

Behavior creation

Your brain capacity is limited. Consistent and repetitive behaviors save it. They are the products of evolution. These behaviors are paths of least resistance. It is the most important model to understand behavior creation. Each repetition strengthens a reinforcing feedback loop which saves energy for the next repetition. The completed loop compound energy savings. Automatic behaviors follow when you have achieved a critical mass of repetitions. The key to the automatization of a behavior is several repetitions, not time. The more often you can repeat the chain reaction, the faster the behavior becomes recurring.

All novel behaviors require conscious efforts to repeat them. Rational decision-making system controls consciousness. This requires willpower. Once behavior becomes automated, it creates inertia, and intuitive system takes control, and it creates the path of least resistance. Here is a simple checklist to create behaviors:

• Trigger is available

• Behavior is possible

• Motivator is powerful enough and instant

Behavior does not happen without a trigger. Its availability to senses is crucial. The easier it is to sense the trigger, the higher the odds of executing a behavior. You can increase the availability of the trigger by using the finish of the existing behavior as a sign to execute the new one. For example, putting dental floss next to the place you keep your toothbrush. The number of daily repetitions of behaviors have to match. If the existing behavior happens twice a day, the same has to apply to the new one.

The ability to do the behavior is crucial too. It is easy to design the right trigger, but it is harder to estimate the ability to execute a behavior. When you want to create a behavior, execution has to follow the path of least resistance principle. The easier, the simpler the behavior itself is, the higher the odds it is sustainable and consistent. All behaviors begin with a small and simple step. Trust in gradual development is hard but worth it. Some exceptions can only think big and manage it, but they are rare.

If you want to create a behavior of eating vegetables, start with your favorite and eat one piece of it. After you have created a consistent behavior of eating one piece of your favorite vegetable, try to eat two of them. By slowly increasing the portion, you can reach the point where you want to be. Once you fail, diminish the number of pieces you want to eat, until you get back on track. Expect failures at some point. React to them, but do not give up.

Last, but not least, motivators have to be forceful enough. Do not depend on willpower. Focus on internal desires to create behaviors. Pleasant feelings and emotions are signs of desire. Do not create behaviors you hate, even though they are good for you. They have low odds of implementation. For example, eating healthy food is a respectful goal. Eating lots of vegetables you hate decreases the strength of motivator. The strongest motivators often relate to excessive self-regard. The strength of motivator go hand in hand with ability. The easier the behavior is, the weaker the motivator can be. It cannot wait and has to appear right after the behavior.

Invert the question: ”How can I produce a behavior?” Ask instead: ”How can I fail once I create it?” The answers are: failure to create an available trigger, the behavior is too hard to execute, or motivator is too weak or appears too late after the behavior itself. Sometimes the combination of these factors is the right answer. Seeing the points of failure in advance reduces its odds.

Four components of behavior change

Existing behavior is hard to eliminate but easier to change. The more repetitions you have, the harder it is to change, and the longer it takes. The number of repetitions has to be larger than it was before. Remember the path of least resistance model. Change one behavior at a time. Behavior change has four components:

1. Recognizing a behavior

2. Experimenting with symbols of motivator

3. Isolating a trigger

4. Creating a strategy

All three components of behavior are not self-evident. Behavior itself is the easiest to recognize. For example, you want to buy healthier food instead of crap. It is easy to recognize what you buy from groceries with low effort.

A real motivator is hard to recognize. Try several symbols of motivator. For example, buy different groceries every time. Ask for help from a friend or a partner, or anyone who is a part of your life. Use a notebook to record behavior and how you feel right after it. Keep a record of which feelings and emotions occur without delay. Share them with a person who helps. Do this until you are sure about your findings.

Triggers are hard to identify, but they have common characteristics. You can associate them with environments, persons, emotional or physical states, times of day, and previous behaviors. They can be combinations of associations. Notebook and help from others become handy again. Buying unhealthy groceries is an exemplary example:

• Environment (The nearest grocery store from your home)

• Company (With your partner)

• Emotional/Physical state (Frustrated and tired)

• Time (Between 4 and 5 pm.)

• Previous behavior (Commuting for half an hour)

Keep notes until you have noticed the trigger. Try what happens without it to be sure you are right. If you have identified a combination of characteristics, eliminate one and see what happens. If it does not trigger the behavior, eliminate this characteristic. Do this until the trigger is as simple as possible. You can try to hide the trigger of inappropriate behavior from your senses or diminish its availability. Sometimes you can eliminate the whole trigger. When part of it is an emotional or a physical state, elimination is next to impossible. When you have simplified components of the existing behavior, it is time to create a strategic plan to change the behavior. This plan could look like:

• When I am at the door of the grocery store at 4 pm, with my partner, frustrated and tired after commuting from work (trigger).

• I avoid shelves and stands with unhealthy food (changed behavior).

• I do this to buy healthy food that normalizes my blood glucose level (a better motivator that causes the same effect as bad food).

• Execute this plan as often as possible.

Changing the existing behavior takes longer and more repetitions than creating a novel one. You can also expect more frequent setbacks. The more the behavior has repeated, the higher the odds of failures.

Timing

Timing is important. Significant behavior changes start from the path of least resistance. The easier the behavior itself, the stronger the motivator, and the more available the trigger is, the least resistance you confront. Timing is best when you feel good about yourself, motivated, and able to execute the change. The effect of a motivator depends on a cycle. The daily cycle is the most important. Behavior change is the hardest during slumps. It is easiest during the top-part of the cycle. Change does not occur without an enormous quantity of conscious effort in the beginning, which requires the least amount of effort during tops. Behavior change is easier right after a vacation or during it. Change does not occur, unless the behavior is part of your vacation.

Gradual change is a reasonable path to follow. Do not change everything at once. Schedule new behaviors first, unless bad behaviors are lethal or produce fast destruction. When the environment changes, timing to change behavior is optimal. If you change location, be open to behavioral change. If you have to do the latter, choose the former. Triggers and abilities to behave can disappear. This is great when you have to reduce destructive behavior.

Sometimes changes are forced upon. Current Covid-19 pandemic has created significant chances to change behavior. Sudden changes in environments have hidden triggers and created obstacles to behaviors themselves. They have changed some motivators. Start changing now if you suffer from the pandemic. Do not despair if it causes you problems. Sudden events like the pandemic produce surprising changes that you can exploit to become the person you want to be. It is a favorable chance to create lasting changes.

Checklist for behavior change

Checklist of mental models that appear in this chapter:

• Reactions

• Combinations and permutations

• Systems

• Motivation

• Association

• Evolution

• The path of least resistance

• Feedback loops

• Compounding

• Critical mass

• Decision-making systems

• Inertia

• Checklist

• Availability

• Probabilities (Odds)

• Simplicity

• Willpower

• Excessive self-regard (ego)

• Inversion

You can understand behavior change better by using this checklist. Every time you think about it, go through the list with deep thought.

A simplified latticework for gaining an edge

 You can learn a single model fast. It lets you have superficial knowledge about a certain topic. This does not mean you understand it well. Knowing a model is just a tip of the iceberg in understanding it. You have to understand how it interacts and intertwines with others to get a complete picture of how to use the model. If you do not understand how these models work together, as a latticework, your understanding is next to nothing. In this text, I focus on how gaining an edge relates to other models. Some things are new and some things are old. In this text, I have bolded the all models when they appear the first time.

How gaining an edge interacts and intertwines with other models

Lets start with the easiest thing. What is an edge? It is one´s higher probability of success compared to the other. For example, the product of a person´s skills and motivation is better compared to someone else when they compete. Randomness can change the result in the short run, but it does not change the edge.

Gaining an edge in a highly competitive field of expertise requires the combination of four distinct components: talent, motivation, deliberate practice and the right environment. It requires understanding motivation and deliberate practice models themselves. Talent is a product of evolution. These three models: motivation, deliberate practice and evolution through genes interact with the right environment and the edge is the by-product. However, gaining the edge in a less competitive field of expertise does not require the interaction of all components. You only need three of them. Here, you can think in terms of intertwinements instead of interactions.

Let´s get back to a highly competitive field of expertise. You have to understand also other models when the deliberate practice is needed to gain an edge. Deliberate practice requires few things: motivation, willpower to continue practice after failures, and the availability of an efficient, accurate, and fast feedback loop between you and the authority figure who gives accurate advice of what you did wrong or how you could improve. Deliberate practice also requires the best timing. You can find it when you understand natural cycles of motivation, willpower, and learning. Learning also fastens when you can find the natural cycle of things you have to learn. For example, you can learn to play better tennis when you understand the natural cycles of hitting the ball.

The last component, the right environment is maybe the most important one to gain an edge. It requires the paths of least resistance for all the things that help to get it. By inversion, it requires the paths of most resistance for all things that makes things harder. When you have created the former, for example in the form of right habits, inertia grows and moves you forward. The right environment focuses on using your psychological tendencies to increase the probability to get an edge. Tendencies like social proof, associating yourself with the right signals, and the right authority figures you lean on, help you get what you want.

These are not the only models in the gaining an edge latticework. You also need strategies to create the paths of least resistance, the right environment, using natural cycles to your advantage, etc. There are other models you need, but I will let you figure out them if you are interested. This is also a more overall picture and misses the details. You can figure out more of them from many sources, including my new book.

I will probably continue with smaller latticeworks when I publish the next text.

New book: Odds Favor the Prepared Mind available on Amazon

 Hello everyone. 

I can finally give you the news that you can purchase my new book: Odds Favor the Prepared Mind: The Latticework of General Mental Models on Amazon. You can get it in paperback and Kindle versions. The majority of the content is the same as in the blog. I have included more synthesis, and two chapters: Behavior change and mental models, and Strategy for Life. Here is the book cover:

                                                                    

You can find some material that is not in the blog like: 

- Why most of our strongest beliefs and authority positions are antifragile

- How persuasion professionals and the path of least resistance relate

- Why you cannot ignore path dependence

- Why you should focus on system instead of goals, etc.

I hope you enjoy the book while the blog is on break. I am mentally exhausted and have to recover a while. I have no idea when I will be ready to continue, but it could take a few weeks.

Regs,

Tommi Taavila

Book coming soon

Hello everyone!

I am almost ready to publish my first book in English about mental models soon. If everything goes well, it is ready at some point during next week. I am not ready to announce the title of the book. But I am pretty sure that its subtitle is close to: "The latticework of general mental models."

The book has about 40 models, some of their interconnections and intertwinements, and two brief chapters about larger latticeworks of mental models: Behavior change, and Strategy for life.

Blog returns when I have recovered from the book publishing operation.

Regs,

Tommi T

On a book finishing break

Sorry for the silence for the last few weeks. Most of my efforts have gone to finishing my first book in English. I am hopeful it will be finished before the end of July. This book has a similar content compared to this blog. It will be clearer and written better.  

I am not ready to announce the title of the book. But I am pretty sure that its subtitle is close to: "The latticework of general mental models."

I will tell you more about it as fast as possible.


-TT

Status quo

Inertia has two distinct parts. The first is that objects in motion will continue their motion toward the same unless there is a force that changes the motion. The second one is that objects that are at rest will remain at rest unless they are acted upon a force. The Status quo is about the second part. It is all around us as the first part. People, their bodies, and organizations all want to protect their status quo. Even the people who should be the most rational, scientists, suffer from it. Changing the status quo is hard, but not impossible.

Status quo, bodies, and minds

Your body and mind both tend to preserve the status quo. Your body wants to keep its temperature within a certain range and wants to keep fluids in balance. Status quo helps your body to function in optimal ways and to prepare for any threats that might get in your way. When the temperature rises, your body starts to sweat more to keep its temperature within the range. This happens to many other functions and other temperature changes or changes inside your body. Your body is full of balancing feedback loops that focus on keeping its status quo. Otherwise, your body would collapse and the death would occur fast.

Your beliefs and identity have status quo. Your thoughts also depend on it. Your mind keeps producing the same answers to questions day after day. It rarely produces any new thoughts even when they are important or necessary. It is even rarer that your mind destroys your old thoughts about the situations you normally confront.

Science and status quo

You might believe that scientists are the most rational people. You might think that they are willing to get rid of their old assumptions and change their views after you have given them evidence that they were wrong. This rarely happens in real life. For example, it took centuries or even millennia to approve the fact that earth is not the center of the universe. Science is changed by the crazy ones who are willing to endure to prove themselves right when people with old theories abuse them. Scientists are humans and they have egos and psychological biases.

Once scientists have made their conclusions about their research, they will toss out most evidence against their theories. They cannot objectively see their results after they have made their conclusions. They are willing to preserve their status quo at almost any cost. You will not easily find a scientist who is willing to destroy his theories even though the evidence shows them wrong. What you will find are scientists who disapprove of all people who can convince others that they were wrong. These people are the last ones who will change their minds. Their egos cannot handle contrarian evidence. This does not mean that science is bullshit. On the contrary, it means that the process is working. This resistance is part of the due process.

How to beat it

The longer the status quo has worked, the harder it is to break it. And the harder it is, the more effort and wisdom you need to overcome it. Willpower will not get you far. You can use it and beat the status quo for a short time, but eventually, you will succumb back to your previous situation. You have to use your path of least resistance and increase it bit by bit to overcome the status quo in your current environment. You have to start the change with minimal steps. If you increase steps too fast, you will fail. Then, you have to start again, but it will be a bit harder. The effort you have to put to reach the next step will increase. When you use incremental steps long, you can reach the critical mass needed to change and get in a position where the change will happen.

Even though the path least of resistance is key to change the status quo, there are few other ways you can make the change easier. In other words, you can make the resistance smaller. Use your psychological tendencies to weaken the resistance. You can cheat yourself with them to put more effort to overcome the status quo. If you can change your environment to overcome the status quo, do it. You can increase the availability of the triggers that will move you in the right direction. This is easier when the environment has changed. Sometimes the only way you can make the change is to change your environment. This is important especially with addictions.

Until next time!

-TT

PS. Do you consider yourself a helpful person? If you found anything useful in this text, please teach it to your friends.

Covid-19 and evolutionary point-of-view

You can think about the Covid-19 pandemic from the evolutionary point of view. You have only one life. There is path dependence. If you die to this virus, everything else is irrelevant. This applies to all diseases and potentially other lethal events. The only smart thing to do is to minimize your odds of having to suffer from them. People who undermine the possible impact of the virus are, plain and simple, stupid. There are opportunity costs for minimizing the odds, but the opportunity costs of dying are infinite. You have to find the balance of avoiding the virus and the other life.

Instead of the survival of the fittest, this pandemic is about the survival of the most adaptable. People who thrived before the pandemic can have great problems in adapting to new conditions if they maximized their output compared to their resources before the pandemic. People who have slack in their lives are in pole position to survive Many lives are disrupted in one way or another. Some people suffer the wrath of the virus and most do not experience big effects. It is safe to say that some people are more adaptable for fighting this virus than others. Even young and healthy individuals have died to it. Nobody knows why it happened to them. From an evolutionary point of view, Covid-19 makes genes of the human race more adaptable to the current situation in total.

What about the necessary changes in this situation? Can you adapt your rhythms of life to the current situation with the virus? Can you change your schedule in a way that you can minimize the odds of possible contagion of the virus? Can you change your daily rhythms to make the change? Can you use trial and error if you have to go out to exercise or work out at home? Can you go out when others stay at home or do you follow a tight schedule? Can you work or do your chores like buying groceries from home? Can you find a place to live far away from others and grow your own food or cook it yourself? If you have not done these things before, can you reprogram your brains to do them?

Even though survival is the most important thing, you have to think about the financials. This situation brings higher-order effects. Some of these effects cause financial distress. Can you adapt your finances to the new situation or new world? This pandemic will have profound effects on the world, nations, companies, and individuals. Some financial rules will probably change. There will be no return to the past. Some nations, companies, and individuals will thrive financially while others will suffer. Many old successful business models will crash and new models will be born. Some industries will change permanently. Best-adapted companies will pay small money for the destroyed businesses that were in ok shape before the pandemic. They can become more successful. Companies and individuals who have cash and small fixed costs concerning their total costs and income can buy things cheaply.

It is a great time to make changes

Covid-19 pandemic is not all about doom and gloom. It is also a great time to make changes. When your life has changed, it is easier to make other changes too. For example, you can use your time more efficiently because some time wasters have disappeared. You do not have to use so many hours to get to work and back. You can also avoid colleagues who waste your time. You can arrange your work in a way that is not dependent on others. It can be easier to develop ways to become more productive in your work without explaining it to others. Or listening to them tell you it is a bad idea to do things differently because it is not the way we do things here.

This is also a great time to get rid of bad habits or other behavior or develop new ones. Bad habits can disappear if the trigger and the prize do not exist anymore. You are then forced to make changes and reprogram your brain. The paths of least resistance to growth with new behavior can be easier to develop. It can also be harder to reach out to old paths of least resistance because the physical and mental efforts can become too hard. You can also develop a better attitude to a crisis when you notice that you can survive this one and thrive after it. Do not be afraid of the future, because it can be better than you think and the odds to make changes are higher today than before the pandemic.

Until next time!

-TT

PS. Do you consider yourself a helpful person? If you found anything useful in this text, please teach it to your friends

Critical mass of social contagion and Covid-19

You can understand the Covid-19 pandemic and its impacts better with the latticework of mental models. You can also become better prepared for future pandemics with the latticework. Even though the virus is a biological phenomenon, it spreads through social contagions when the critical mass is achieved. If you understand social contagions better, you can see what needs to be done and how to cope with the pandemic better.

Covid-19 as a social contagion

Covid-19 spreads through the population with close human contacts. Like all social contagions, it has three parts. First, there are a significant few. They are people who spread the disease faster than the rest of the population. Second, social contagion needs to be sticky to spread. Third, it needs the right environment to spread. When all these three parts are in place, the virus soon becomes unstoppable, after the critical mass is achieved, unless you do something. When the critical mass is achieved, the growth accelerates exponentially, until it starts to decelerate. The contagion collapses eventually.

Let us start with the significant few who spread the virus faster than the rest of us. What is common with these people is that they have a better possibility to spread the virus. They meet lots of people and they have close contacts or they have close contacts with these people. They can be real estate agents, work in junk food restaurants or work in call centers, etc. They live in dense urban areas or use public transportation to commute to work. They are also people who have to work for a living, are workaholics, or do not care about minor illnesses like flu. The best way to stop or slow the pandemic is to focus on finding the significant few who spread the virus faster. Then you have to limit their odds of spreading the virus which means that you have to stop them to meet anyone.

In the second part, the stickiness factor is simple. One reason why COVID-19 is so sticky is that many people who spread it do not know they have it. They can spread it without knowing it and it is a problem. This fact is important because they have not tested people who do not have any symptoms. The other reason why it is sticky is explained by the fact that it does not kill people easily or fast. It is not like Sars which killed many more people compared to the number of infections and disappeared fast. The third factor which made it sticky is the length of high odds of spreading. Covid-19 can spread about two weeks from the first symptoms. One problem is that we do not know if it can spread even before the first symptoms arrive. I am not a professional. I have no exact data about the disease.

The environment is simple. Covid-19 spreads through social contacts. Urban areas with dense populations are ideal places to spread. It is hard to avoid social contacts when you live in a place like them. You cannot avoid all people in dense areas. It also spreads in events and places in which many people gather together closely. These events and places include sports events, weddings, public transportation, etc. These events and places have to be shut down when you want to avoid spreading the virus. All you need is a one-person with the virus and it spreads like a wildfire in a dry season.

The faster you can address all these factors and manipulate them, the less the virus spreads. If I am right about the latter, the first wave of the disease decelerates its spread faster in the countries which have focused on the factors than public offices have predicted. Time will tell us whether that is the case. When the contagions are dangerous like the pandemic, it is better to overreact than undermine its effect. If you want to stop spreading your actions have to be fast and decisive. Therefore, the actions that the public feels are not necessary, are smart things to do when it comes to social contagions with highly negative effects. And because this pandemic is a power-law event, you cannot predict it or its impact on societies.

The next text is about Covid-19 and evolution.

Until then,

-TT

PS. Do you consider yourself as a helpful person? If you found anything useful in this text, teach it to your friends.

Power law distributions

The last text was about Mediocristan and Extremistan. Let's forget the former and focus on the latter. Extremistan is a world in which the enormous outcomes are the results of small causes. 80/20 rule is the best known power-law distribution. It states that 80 percent of the outcomes come from 20 percent of the causes. This is just one power-law distribution and there are uncountable amounts of them. Do not focus on the 80/20 rule when you think about power-law distributions. Covid19-epidemic is an extreme example of a power-law distribution. Even though it is not sure, it likely started when one person ate some part of an animal he should not have. Millions of people will suffer from the virus.

The good, the bad and the irrelevant

It is not important to only understand that a minority of causes or inputs produce the majority of effects and outputs. Understanding that the majority of causes or inputs produce a minority of causes and outputs is equally important. Let's say that your causes and effects have 80/20 distribution. Then 80 percent of your causes and inputs are irrelevant. Their effects and outputs are close to zero. It is safe to say that 20 percent of your causes and inputs have large positive and negative effects and outputs. If your life is good, then your 20 percent has larger positive than negative effects. If your life is bad, the negative effects of that 20 percent are larger.

You do not have to be a rocket scientist to understand you have to enlarge the effects of positive causes and inputs in your life and diminish the negative ones. You can change to get rid of some of the irrelevant 80 percent of the causes and inputs. Change them into positives. It is unlikely you can get rid of all the negative causes and inputs. You can find ways to diminish some of the effects and outputs. You can transform some of them into irrelevant ones.

Long-term predictions are not smart in Extremistan

You can make predictions in Extremistan and be right for a short time, but the overall results of predictions are usually negative. As I mentioned in the last text, you need 100 billion fold data points in the 80/20 world compared to the normal distribution world. When the power-law distribution is 50/1, you cannot have enough data points or computing power to make any useful predictions. Financial markets and economies are parts of Extremistan. Therefore, an economist, financial pundit, or someone else who believes they can make exact predictions are idiots. Their total effect on the economy is negative. The funny thing is that they believe their predictive models are based on solid math. In short, do not believe anyone who believes they can make any useful long-term predictions in any social interactions. The world today is not predictable.

When predicting is not possible, you have to prepare for everything. How to do it is a whole another ball game. One way to deal with it is to reduce tight interactions. Do not use all your resources to achieve something like putting all of your time or other resources like money into one endeavor. Be less leveraged than you can. Have smaller debts than you can take. Be more independent. Rely less on other people and their resources. Have many income streams. Then you rely less on a single one.

Start making small experiments. Make small and numerous adjustments to your inputs. See what happens. There are lots of examples of what you can do. Make small changes in your marketing materials when you can do them in a cost-efficient way. Change a few words or colors, etc. Make small adjustments to your daily habits like your eating. See what happens if you diminish the availability of bad nutrition and increase the availability of a good one. Put some of your sweets (if you have them at home or work) into somewhere you cannot see them without increased effort in finding them.

Do you consider yourself a helpful person? If you found anything useful in this text, teach it to your friends.

Until next time,

-TT

Mediocristan and Extremistan

There are two statistical worlds in which we live. Nassim Taleb has described them with names Mediocristan and Extremistan. The first world is a normal distribution world and the second world has extreme distributions. In mediocristan, two persons that have a combined length of 4.00 meters are close to each other. For example, they have 2.01meters and 1.99 meters in length. In extremistan, there are two persons whose combined wealth is 10 million. It is most likely that one of them has wealth close to that of 10 million and the other has wealth about 100,000. As you can see, these worlds are totally different from each other. In other words, one figure does not change statistics much in Mediocristan, but one figure can change everything in Extremistan.

Mediocristan

Mediocristan is the world where the majority of the people think we live in. This applies even to the majority of the most educated persons. Success equals effort and skills in this world. Mediocristan applies to most biological effects on humans. Genes work in ways that produce mostly results that can be found the normal distribution. The results that genes produce have high predictability. You can define probabilities to them and they do not change much. Here are some percentages how much some biological or psychological attributes of humans are explained by the genes they inherit:

• Height 70%, Weight 80%
• Reading disability 60%, Verbal ability 60%
• Face remembrance 60%, Spacial ability 70%
• General intelligence 50 %, Personality 40%

As you likely know, your biological parents´ genes affect your biological and psychological traits. If they have some extreme traits, likely, these traits are not so extreme in you. In a world with normal distributions, return to averages happen fast. If you have a height of 2.10 meters, your son´s height will likely be closer to average.

Extremistan

Extremistan is the place where a minority of the people think we live in. Extremistan applies to most social effects on humans. Success is non-linear with effort in this world. Social contagions produce results that produce extreme distributions. Most of them are from Extremistan. Some social attributes that are from Extremistan are book sales per author, wealth, and sizes of companies. There is no predictability in Extremistan. It is almost impossible to predict extreme statistical distributions like changes in stock prices. Even figuring out the mean of a simple 80/20 Pareto distribution requires a sample size of a hundred billionfold compared to normal distribution according to Taleb. Changes in stock prices have much larger extreme distribution. Therefore, they cannot be predicted in any modern computer or human brain. This means is that it is much easier to prove that someone is wrong than what the reality is. Today´s world suffers from the domination of high-effect, low-probability events. Most scientific breakthroughs happen when they are not expected, instead of deadlines put to researchers.

Events and effects that combine both worlds

Some events happen in both worlds. For example, some economic effects from predictable catastrophes like earthquakes have extreme distributions. An earthquake that has twice the power than the other can cause tenfold economic effects on people. The earthquake in the same magnitude as 100 years before can also cause manyfold effects today than it did then. These kinds of socio-economic effects grow in magnitude when more people live in big cities, and we use more of nature´s resources.

The modern world grows larger and larger winner-take-all effects. Even a little bit more skillful athletes can earn ten times more money than athletes a few percentage points below their skill levels. The same effects can apply to authors, musicians, and other artists. But this does not always apply. Even a little bit luckier author with the same skills can make a hundredfold more money than others.

Nothing to add,

-TT

Next text delayded due to sickness

Sorry for not publishing anything, but I have been sick for almost two weeks. I hope next post will be ready next week.

-TT

Three levels of causation

What makes you smarter than other animals? You can understand that the stimuli you receive do not represent only facts or data. The latter is the modern word for the former. You can also understand that the stimuli you receive are connected by cause-effect relationships. Your understanding of data consists of these relationships and you can act based on them. You can also imagine new events by using these relationships. No other animal can do it. The ladder of causation consists of three levels of cognitive ability.

The first level, seeing or observing

Your brain is a great pattern detection machine. It can observe and receive stimuli around it. It does that with greater efficiency than you can think. Your brain makes all kinds of associations based on the stimuli you have received in different situations in your life. It can also make good predictions based on those associations which are based on your experiences without specific reasons. The problem is that data is mostly stupid. It does not tell about cause-effect relationships. It does not tell which is the cause and which is the effect. You have to interpret and understand the data. Your brain can make good predictions to questions like ”What if I see x doing y” or ”How are stimuli related to each other?” If artificial intelligence is at this first level, it cannot function in new situations. Every new situation has to program to it by a human being. This level is all about the observed world.

The second level, doing or intervening

When in the first level you can observe things that have already happened, in the second level you can change them on purpose. You cannot understand cause-effect relationships just by observing them without interventions or smart experiments or copy somebody else´s actions. You cannot answer the question: ”What happens to the sales of iPhones if you drop the price by 40%?” if you have no observations beforehand.

Scientific experiments made in controlled conditions are second-level tools. For example, an online retailer can direct different customers to slightly different sales pages that sell the same products. Then, it can see the data about the conversion rate of both of them. Good questions at this level: ”What if you change red to blue color?” or ”What if you ban a person from doing something?” This second level of causation also makes it possible for you to create great causal models based on your observational data. This can be done even without experimentation if the cause-effect relationships are reliable enough. This level is all about an observable new world.

The third level, imagining or retrospection

Imagination can create answers to questions without data at all. For example, you can think about what had happened if you had not done anything. You can more easily understand the reasons behind certain outcomes. For example, you can think about what could have happened if you were unlucky and separate luck from skill. You can compare your observed data to an imaginary world or an imaginary outcome. You can also invent something that is currently not from this world without making any experiments. This level is all about the world that does not exist, yet. Technological developments do not happen without this level. Reaching out beyond the existing reality is not possible.

A simple example of all levels

A simple experiment is to lower the price of something for 50 percent. The first level of causation means that you cannot know what happens unless you have done it before. No statistical methods can be used to discover what happens unless you have experienced the same price reduction before. It is not the same thing to lower the price from 3$ to 1.50$ than from the previous experience: 2$ to 1$. The second level of causation demands experimentation of letting some customers have the price reduction and not giving the same price reduction to others. The second level of causation does not answer the question: What if we had reduced the price to 2$ from 3$? It is the third level question. This requires imagination.

This is all for this time,

-TT

Aging and skills

You have to consider age when you think about skills. Physical and cognitive skills have different perspectives about age. Physical skills like playing basketball have different characteristics than cognitive skills like playing chess. All the statistics about ages are from Michael Mauboussin´s book The Success Equation. It is a good book about skills and luck.

Physical skills

Different physical skills like sports have different optimal ages for peak performance. They are not the exact figures but small ranges of ages. Men and women have small differences between their peak ages depending on the sports. There are no specific ways to determine which physical skills have higher or lower peak ages. A simple answer is that skills that need more fast-twitch muscle fibers have lower peaks and skills that need more slow-twitch muscle fibers to have higher peaks. For example, running fast requires fast fibers, and endurance running requires slow fibers. Peak performance for running fast happens when you are 22-24-year-old male and 21-23 old female. Peak performance for endurance running is 26-28 for both genders.

There are also some other physical characteristics like the visual system and the body-eye-coordination that need to be considered. Visual acuity weakens when you age. Therefore, baseball batters lose their edge after a certain age. Basketball players need both, fast-twitch fibers and great body-eye-coordination, therefore their peak age (24-26) is lower than peak age for baseball (27-29). Athletes that rely only on their body-eye-coordination like golfers (30-35) have higher peak ages than other athletes.

Cognitive skills

Cognitive skills usually mean the ability to make decisions. If you want to make good decisions, you have to be able to understand the stimuli you confront, how it relies on the understanding you already had about the similar or relevant stimuli about the situation, to understand what stimuli to discard and what to use to make a decision and overcoming your intuition if it is needed. Aging has a much slower effect on your ability to use your cognitive skills than using your physical skills. Aging helps in a stable environment and when you have lots of time. Peak age is much lower in an unstable environment with the necessity to make fast decisions.

Cognitive skills can be divided into two different groups. The ability to solve new problems and the ability to solve problems that are related to your experiences. The first group is called fluid intelligence. It peaks around 20 and is in constant decline about one percentage point a year until you die or your brain has big damage like Alzheimers-disease. Your ability to resist your intuition when it is wrong declines when you get older so does your ability to plan for the future. In other words, you cannot change your patterns of thought as well as you were younger. Therefore, the faster speed of change in the modern world becomes harder as you become older. You also have to be younger to create new things.

You can grow your ability to use things you learned before grows until you die, but in your early forties, the growth slows. Your peak when you are old is not much higher than you were in your twenties. It is only about 25 percent higher. Your vocabulary, ability to understand historical events, and geography, all grow until you die. If the current situation is just one of those previous events, you probably understand it better than later generations, especially if you have time to think about it. Your creativity in putting together old information and/or being an experimental creator peak later.

The overall cognitive performance declines after a certain age. The peak age is about 45 years. You cannot fool yourself in any way. You have to accept this. Some things that combine novel and old things like personal finance have later peak ages. The peak in the ability to make good decisions on personal finance is about 53 years of age.

You can read more about aging and skills from Mauboussin´s book. Until next time!

-TT

Luck; Skill, or both?

Do you need luck, skill, or both to become successful? You can find many answers to this question. Some people say others have luck and they have great skills. Some people say you need both. The answer to this question starts with words ”It depends on.” and continues with ”what you are doing. Michael Mauboussin has written a great book, ”The Success Equation” which gives more answers to this question than I can give to you in this text.

Let's start with the definition of luck. It can be defined as ”A single unrelated event that gives you an advantage or a disadvantage.” Some people may say that you can work hard to be lucky. They say you can develop yourself to become luckier. These phrases do not apply to the definition of luck. What happens is that when you have better skills in what you do, luck strengthens your success. Skill can be defined as: ”An ability to use your understanding to execute an action or a decision.” The more skilled you are the better ability you have to do this on average. The last two words are the most essential ones. Single actions or decisions that give you a great result do not mean you are skilled. Great executions that you can deliver on an average day by day are the best symptoms of great skills.

Luck-skill-continuum

Different types of actions or decisions can be put into luck-skill-continuum. On one side of the continuum are actions or decisions that need only luck and on the other side are actions or decisions that need only luck. You can find most actions and decisions from the middle of the continuum. They are based on luck and skill. In the middle are the actions that are based on both luck and skill and from this point to the left luck becomes more important and from this point to the right skill becomes more important. Lottery and most games like roulette at the casino are completely on the left side of the continuum and games like chess are on the right side of the continuum. Ask yourself: ”Can you lose on purpose?” if you want to know about the position on the continuum. If you can lose on purpose, you are on the right side of the continuum. If you cannot, you are on the left side of the continuum. In the middle, you can find an author that sells lots of books. Shitty authors cannot sell any books, but good ones can still not sell if they are not lucky.

Three things tell you more about the actions or decisions and whether to put them to the left or right side of the continuum. The first one is the sample size. When you are on the right side of the continuum, even the small sample size of the results can tell you much about skills. For example, the time for a hundred-meter run can tell you whether the runner is a good or a bad one. In the lottery, you can put hundreds of coupons and how much you win tells you nothing. In other endeavors like playing poker, small samples tell you nothing about the skills of the player, but when you play hundreds or thousands of hands, more skilled players win and worse players lose much more.

The second one is the form of feedback you get. When you need to be skilled, the feedback you get is based on clear cause-effect relationships not random or complicated like on the left side of the continuum. In this side, the feedback you get will lead you to problems. You may think that you are skilled even though you are just lucky. This does not happen on the right side of the continuum.

The third one is the return to the average or to mean if you want to use the statistical word. When the endeavor is based on skill, the return to the average happens slowly. When the endeavor is based on luck, the return to the average happens fast. In the middle of the continuum, the speed of the return to the average is somewhere in between.

There is an interesting paradox about the role of luck in the middle of the continuum. The better the relative skills of the performers are, the more luck you need to perform better than average. What I mean with this is that when the average performance is closer to the best one, the more luck you need to succeed and vice versa. The bigger the difference between the average performer and the best performer there is, the less luck the best performers need. When this is the case, you have to be sure you are better than your opposition.

I kept this text short. Sorry for not publishing anything for a long time. Hopefully, I will get something published in the next two weeks after this.

-TT