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Experts from a world that no longer exists

• varelse 5y ago
  When someone today complains that solar power is still too expensive, or that cell phones and flat screen TVs in the hands of poor people proves they aren't really poor, they immediately flip my Bozo bit. To be fair people who hate nuclear power have always flipped my Bozo bit although they might have done the job delaying its adoption long enough for solar power to become cheaper by now.
  • ChrisMarshallNY 5y ago
    > or that cell phones and flat screen TVs in the hands of poor people proves they aren't really poor I have been to a social services building, many times, that also has a homeless shelter. I often see shelter residents hanging outside. They almost all have cellphones. They are probably bottom-tier Android devices (all the phones I saw looked like smartphones). Instead of making me think that “the homeless are coddled,” it reinforces my opinion that smartphones have become a basic human requirement.
    • varelse 5y ago
      Derrick Soo, the homeless candidate for mayor of Oakland, has solar panels on his tent to charge his devices. And good on him!
• gorwell 5y ago
  There was an amusing example of this yesterday with The Economist saying, `The sharp increase in inflation over the past year has blindsided many economists. Almost no one saw it coming` https://twitter.com/TheEconomist/status/1461651190144503808 https://twitter.com/TheEconomist/status/1461651190144503808
  • dorianmariefr 5y ago
    "The less confident you are, the more serious you have to act." – Tara Ploughman
  • smitty1e 5y ago
    ZeroHedge has predicted 83 of the last 7 downturns.
    • beckingz 5y ago
      That's pretty good. How many times were they able to predict the same downturn?
    • beamatronic 5y ago
      I’m still standing for delivery of my physical silver
    • dwiel 5y ago
      I follow ZeroHedge, but this statistic isn't very helpful without knowing the number of false positives or incorrect timing.
      • jameshart 5y ago
        At the risk of explaining the joke... "predicted 83 of the last 7 downturns" implies a false positive rate of at least 76 incorrect predictions for 7 correct ones. Of course, if they made 83 downturn predictions but didn't correctly predict the 7 that actually occurred, thee false positive rate could also be worse than that.
        • jointpdf 5y ago
          It’s a reference to a 50+ year old economics joke: https://worldin.economist.com/article/17506/edition2020dont-bet-recession-2020 https://worldin.economist.com/article/17506/edition2020dont-...
          • smitty1e 5y ago
            More accessibly: > The stock market has predicted nine of the past five recessions—a joke from master Keynesian of decades ago Paul Samuelson. https://www.forbes.com/sites/briandomitrovic/2018/11/22/the-stock-market-has-predicted-nine-of-the-past-five-recessions/?sh=4e560203d740 https://www.forbes.com/sites/briandomitrovic/2018/11/22/the-...
  • NikolaeVarius 5y ago
    The social media person at the Economist is bad at their jobs. The article goes into the nuances of the claim. The specific claims are Higher than expected inflation > new data showed that America’s consumer price inflation rose to 5.4% in June, well above economists’ expectations. On July 14th it was revealed that British inflation rose to 2.5% in June, which was also higher than forecast. The specific reason high inflation was not expected was because expected long term slump, which didn't happen > Not long ago economists tended to the view that the covid-19 pandemic would lead to a prolonged slump in the rich world. That view has not worn well > With unexpected growth has come an unexpected spurt of inflation
    • WarOnPrivacy 5y ago
      How dare you soil my single-sentence belief with this filthy nuance.
  • Puts 5y ago
    Well this is not true. There has been debate about an emerging inflation threat for many years now even long before the pandemic due to the rapid rate central banks are printing money to keep the economy floating since 2008. However in the financial market there are many people whose lives depend on constant growth creating a strong sentiment to either willfully mislead the market or just lie to themselves for comfort and self-preservation.
  • Mikeb85 5y ago
    Lol everyone saw it coming, but policymakers needed everyone to think it wouldn't come, otherwise the public appetite for Covid measures would have been far less...
• cblconfederate 5y ago
  Time to dust up those old ideas. Perhaps search HN for the ideas that everyone ridiculed
  • codehalo 5y ago
    Lol. Bitcoin
• renlo 5y ago
  This reminds me of the linotype machine's [0] invention. Many had tried to invent a similar machine and failed, the inventor went into it without knowing about the other failed attempts and used a completely different and novel technique than other attempts and managed to make it work. [0] https://en.wikipedia.org/wiki/Linotype_machine https://en.wikipedia.org/wiki/Linotype_machine
• dougabug 5y ago
  This article is uncannily apropos for HN. The spectrum of opinions towards emerging technologies is so starkly colored by the eras during which practitioners did their primary work. It reminds me of the Heinlein quote from “A Door into Summer”, “When railroading time comes you can railroad—but not before.”
  • wpietri 5y ago
    For sure. The older I get, the more I try to watch out for this effect. It's a pain, but one of the nice parts is that it drives you to look for deeper principles. E.g., when my dad started coding, machine time was really expensive as was storage space, so everybody optimized for those things. Hello, Y2K! Now the opposite is true: developer time has gotten more expensive, and computation is cheap. In one sense, that invalidates a lot of old expertise. But on the other, optimization is still usually important, we're just optimizing for different things. A little reframing of habits and you can end up with a more flexible and subtle model.
    • dougabug 5y ago
      We are in violent agreement! Optimization never grows old, but it’s the more general form of optimization of which you speak, rather than hyper-specific instances of optimization which can overfit to specific eras.
  • 2sk21 5y ago
    I was thinking about this in the context of large transformer based language models like GPT-3. Based on my years of experience in the field, I keep thinking that this is a dead-end on the path to full AI but I have to force myself to keep an open mind and to not to fall into that trap. Incidentally, Morgan Housel, the author of this essay is a very good financial writer - worth reading his other essays too.
    • dougabug 5y ago
      Perhaps this was a cherry picked example on the part of the authors, but the network generating relevant novel images conditioned upon the text prompt “an illustration of a baby daikon radish in a tutu walking a dog” … made me take a (not entirely permanent) break from on ripping on GPT-3. https://openai.com/blog/dall-e/ https://openai.com/blog/dall-e/
• smitty1e 5y ago
  > Some expertise is timeless. A few behaviors always repeat. They’re often the most important things to pay attention to. AKA: wisdom. Seek, cherish, and protect that. Wisdom is functional. 'Expertise' is often knowledge if the current/historical state of affairs. When a dam breaks: > It usually means other parts of the system have evolved in a way that allows what was once impossible to now become practical. The state of the hardware, the software, and the peopleware at any moment in time is an Overton Window.
  • foundart 5y ago
    TIL Overton Window: "The Overton window is the range of policies politically acceptable to the mainstream population at a given time. It is also known as the window of discourse." https://en.wikipedia.org/wiki/Overton_window https://en.wikipedia.org/wiki/Overton_window A very useful concept.
    • aigo 5y ago
      The window, and the ways political agents try to move it in one direction or another, explains a lot of modern discourse It intersects with Chomsky's ideas about manufacturing consent quite nicely too
• dqpb 5y ago
  If you’re really an expert, you should be the vanguard, not the old guard.
• leobg 5y ago
  Great article. Reminds me of Nietzsche’s "On The Use And Abuse Of History".
• dqpb 5y ago
  Maybe “expert” is no longer a useful term. Instead we could differentiate between creators and power users.
  • dorianmariefr 5y ago
    I don’t get the link
    • WarOnPrivacy 5y ago
      I think OP is saying is we're moving toward a time when growing fields are more likely to be saturated by non-specialists
  • ksaj 5y ago
    I've done various forensic-oriented gigs for court cases. I was always given an titles like "Technical Expert" and sometimes really specific "Expert" terminology. In one case I was brought in only to give a high level synopsis about how deleted files can often be carved out either in full or in part, may appear in multiple places at once, sometimes clearly showing edits, and also come with useful metadata stored within the directory entries both past and present. They referred to me as the "Computer Filesystem Expert" which I thought was a bit strange, because I'm not what I'd consider an expert in file systems. Hell, I only barely know how journaling works without breaking down. I just know a lot about a very specific set of details that are useful in a forensic investigation. So there is yet another use of the word "expert" that doesn't necessarily mean the same thing to everyone. It's not a useless title in this case, but it's really ambiguous to a person who understands more than the role requires.
• WarOnPrivacy 5y ago
  buying stocks at all seemed like nothing but speculation in the 1920s because corporate disclosures were so opaque. By the 1970s that had changed, and you could begin to make rational, calculated long-term decisions that put the odds in your favor. Thriving growth follows sunshine. Meanwhile, Govs/Corps compulsively fight transparency. Their only greater priority is revenge on people who drag them into the light.
• rossdavidh 5y ago
  "This time it's different."
• tjr225 5y ago
  I can’t wait to see what the experts at hacker news have to say about this!
• howmayiannoyyou 5y ago
  Tl;dr - Old experts cannot distinguish between historical/economic cycles vs. Paradigm shifts that break those cycles. Nice theory, but adjust your scale over a thousand years and innovation has yet to usurp megacycles of boom/bust, war/peace or the rise/fall of "empires". We may be better informed than we were in the 1700's, but we are no less partisan in our views, speculative in our ventures, nor vulnerable to geopolitical storms. Using one of Housel's examples - high PE equity ratios are indicative of excess liquidity in the system chasing speculative yield; a subset of which excess liquidity is capital fleeing China for the West (or) A federal reserve & US Treasury committed to ensuring Boomer retirement assets are not wiped out in a market reversion to a historical mean. High PE equity ratios are not indicative of any underlying fundamentals that justify the majority of these prices. Yes, Tesla _may_ be an exception _if_ Musk's innovation convergence strategy is monetized as its investors hope. But for every Tesla there is a Nikola, and for every Moderna a Theranos. What do old experts (old farts like me) know that Housel may not? We've lived through about 8 recessions, three economic crisis, one bout of epic inflation, and we've watched change, ignorance and greed greatly disrupt or destroy corporate behemoths like Lucent, Enron, GM, GE, etc. We know what is coming. We just can't tell you precisely when. Housel's temporal sense appears to be stunted. And, yes, he does (as he stated) sound arrogant.
  • GDC7 5y ago
    > Yes, Tesla _may_ be an exception Tesla is not the exception, matter of fact it's the poster child of a world where the stock market going up becomes the goal pf both the elected and non-elected branches of the government and not an agnostic measurement tool to check how American public companies are faring.
• coffeefirst 5y ago
  Something I've noticed in the pandemic: there's a pretty big gap between what people remember "the experts" saying vs what, if you listened to one or two qualified professionals and kept them straight, actually said. Individual experts—the good ones at least—seem to hold up pretty well even if they didn't see everything coming. It's the widespread sampling of chyrons and faces that inevitably says everything all of the time and winds up looking incompetent.
  • paulpauper 5y ago
    This is why eyewitness testimony can be unreliable . People are sure someone said or believed something, or that there is a consensus about something, but this may not be true. Social media can make this worse, particularly by forming false consensuses about issues in which no such consensus may exist.
  • gilleain 5y ago
    Yes it seems like a combination of magnifying and muddling information. Say, for example, a cancer researcher makes a statement like "Red wine contains compounds that might protect from some cancers" - not very interesting as news. So it gets magnified to "Red wine CURES cancer". Next, another expert says "excessive use of alcohol can increases the risk of certain cancers". Of course the news converts this to "Alcohol causes cancer". Finally, combine these two messages and people quite understanderbly conclude that cancer experts have no idea if alcohol causes or cures cancer.
    • skybrian 5y ago
      There is that, but it also seems to be true that a lot of scientific studies are done badly. A lesson of the pandemic seems to be that when doing a meta-analysis you need to make sure to avoid the low-quality and fraudulent studies.
  • AnimalMuppet 5y ago
    From the book of Proverbs (in the Bible): "The wise man gets a lot of advice" (paraphrased). One chapter later: "The fool listens to most of it" (also paraphrased). If you don't have the time to sort it all out, don't listen to all the viewpoints. Society, collectively, is insane - it believes so many contradictory things that could not all possibly be true. You can't listen to society or "they say" as a guide. You'll get nonsense. But part of this is on the news, especially television and internet news. They need a hot take for this hour to draw eyeballs. It doesn't have to make sense, it just has to be new and different. But if you're trying to follow it to learn what to do to protect yourself in the pandemic, it's a hopelessly self-contradictory jumble. People wind up saying "They lied to us! They're still lying to us!" The problem is that "they" - the "they" that the media present to us - is too big a set. Now, individual experts still can be mistaken, give bad advice, or even lie. But no expert is as confused as the union of all the experts.
• nickdothutton 5y ago
  What I found interesting is that the period for reappearance of “failed ideas” is roughly the length of a career. Coincidence or due to any real effect I don’t know. I wrote a little about it here: “Don’t be discouraged by the failure of technology or approaches of the past. If the problem is still important after all this time then it’s a problem worth solving. Don’t avoid unsuccessful solutions. Avoid insignificant problems. Success this time around could be unlocked by advances in any number of unrelated disciplines.” https://blog.eutopian.io/the-next-big-thing-go-back-to-the-future./ https://blog.eutopian.io/the-next-big-thing-go-back-to-the-f...
  • jonplackett 5y ago
    I read a while back that scientific ideas usually take about 50 years to be accepted. Which means essentially that they never are accepted, the people who disagree with them just die and the next generation embrace them. Einstein pretty much hated quantum mechanics and ended up making a bunch of discoveries while making every effort to disprove it. So if that’s how scientists do it - who should be the most amenable profession to new information and ideas, what chance do the rest of us have?
    • dougabug 5y ago
      > Which means essentially that they never are accepted, the people who disagree with them just die and the next generation embrace them. This is to some degree the point made in Kuhn’s “The Structure of Scientific Revolutions.” https://en.wikipedia.org/wiki/The_Structure_of_Scientific_Revolutions https://en.wikipedia.org/wiki/The_Structure_of_Scientific_Re...
    • raziel2701 5y ago
      I think the new ideas get accepted when either the old guard die, and/or an undeniable technology gets created by use of the new idea.
      • teddyh 5y ago
        “A new scientific truth does not generally triumph by persuading its opponents and getting them to admit their errors, but rather by its opponents gradually dying out and giving way to a new generation that is raised on it. […] An important scientific innovation rarely makes its way by gradually winning over and converting its opponents: it rarely happens that Saul becomes Paul. What does happen is that its opponents gradually die out, and that the growing generation is familiarized with the ideas from the beginning: another instance of the fact that the future lies with the youth.” — Max Planck, 1948
• brabel 5y ago
  This article offers nothing of value IMO... because what it's saying is basically that experts will, at some point, fail to see that circumstances have changed and advice that was good in their own "time" is no longer good... however, that's an obvious remark: as another commenter pointed out, people almost always tend to think "this time it will be different" and choose to ignore the experts... I would say more useful advice would be that you do that at your own peril: most of the time, nearly always, the experts will be right... the occasions where things really will be different are rare and far between. Eventually, a lucky kid will do well by ignoring the experts, but only after thousands before them failed doing the same thing.
  • IncRnd 5y ago
    You missed about half the article. There was this part (along with lots of examples), "Some expertise is timeless. A few behaviors always repeat. They’re often the most important things to pay attention to."
    • brabel 5y ago
      I didn't miss it, just ignored it because no one, not even the experts, konw which part of their expertise is "timeless" and which isn't (otherwise the problem wouldn't exist in the first place).
    • ghaff 5y ago
      I'm not sure it's so much about timelesss expertise (Although that exists as well). Rather, the advice is probably something along the lines that when experts tell you that some form of the thing you're doing has been tried half-a-dozen times in the past and has failed--it probably will fail this time too. However, sometimes the difference from what was done in the past is sufficient to make it work this time. Or the surrounding technology ecosystem is qualitatively different. So it's worth considering what it is in today's environment that would invalidate the expert opinion.
  • efitz 5y ago
    And what if the opportunity cost lost retrying something that didn’t work over and over? Maybe it will eventually succeed but what else could have happened with the same effort?
• TedDoesntTalk 5y ago
  > So it will always be the case that those with the most experience – and the good, smart, accurate wisdom that comes from it – will be the least willing to adapt their views as the world evolves. This is where I stopped reading, although I will finish the article. He’s writing about the stereotype. Humility often comes with this experience and wisdom. Some people are capable of seeing that everything is changing, all the time, regardless of their personal experience. That recognition frees you to embrace new, different, the things that used to be unthinkable.
• kingcharles 5y ago
  This quote made me feel better: "Some of the biggest businesses of the last 10 years are all in industries that were the starkest examples of stupidity 20 years ago." I'm still a little bitter from VC experiences 20 years ago. In 1998 my friends and I built a browser-based (Java applet) collaborative word processor and spreadsheet called Office Wherever (o-w.com). We shopped it to a dozen VCs and all went ROFLMAOWTFBBQ. They all said the same - no company would want to put their files on the (scary) Internet (the term "cloud" was still years away). In 2001 my friend and I had built a full music & movie/tv streaming service with a full-screen interface that looks just like the modern ones, built demo hardware, had access to all the rights etc. Everyone we pitched it to went ROFLMAOWTFBBQ. They said people will NEVER get rid of their DVDs! They like having things on their shelves to show off. What a stupid idea! You need to be like Netflix and rent DVDs to people! You stupid! STUPID STUPID STUPID! I wonder what folks are pitching today to VCs who are rolling on the floor laughing when they see the "stupid" demo?
  • 2sk21 5y ago
    I feel you. When I was working in IBM research, I developed a web-based tool eerily close to Jupyter in 2007 but was simply unable to get traction within the company and abandoned the work by the end of the year. I still regret not pushing forward with it to this day.
  • toast0 5y ago
    There was a time that Google had good sucess by launching new products that Yahoo had launched 5 years earlier and cancelled due to lack of interest. Nobody wants to be a patent troll, but being too early and filing patents can set you up for late revenue. Even if it's just watching for patent trolls and licensing your patents to the victims to double troll.
  • leobg 5y ago
    Experiences like this seem not to have made Musk bitter, but just even more determined.[1] Comes down to the old “Would you rather be famous for a great thing you never did, or have done something great without anybody else realizing it?” You experienced the same things as Elon Musk. When he pitched Zip2, the execs from Yellow Pages laughed at him, shoved the yellow pages book over the table and said, “So you think you’re gonna replace THIS?”. What you're saying is that you have seen things and done things like Elon Musk. You didn't get the wealth and the recognition. But that you have these things "in you" - how many people can say that about themselves? You not only had really visionary ideas that were proven right within a decade. But you also built a Google Docs and a Netflix before Google and Netflix did. You're one of the Semmelweises or Lickliders of history. They didn't get rich, and most people don't know about them. But they are the ones who actually drive our world forwards. They are the ones who go "Zero to One". The others are just resellers, even if they end up getting all the credit. [1] I mean, the guy was bullied at school and still did not, as one might expect, end up being driven in life by “paying them back”, or by retreating from humanity. This trait of “taking a lot of crap without becoming dirty himself” is an underestimated quality that he has.
• bbbhahah 5y ago
  "experts" - much like all the liberal fucktarded "covid experts"
  • FormerBandmate 5y ago
    Are you five
• publicdenial 5y ago
  [flagged]
• publicdenial 5y ago
  Is Fauci still considered an expert since he likes to rip vocal cords out of puppies and torture them to death? Just asking...
• ketzo 5y ago
  At first I was a little wary of this, because it had the sort of smooth, business-school-y tone that makes you worry someone’s trying to sell you something. But I after reading I thought this was genuinely insightful. Particularly politically. I think it helps give me some perspective to know that different smart, well-intentioned people have believed wholeheartedly in entirely contradictory positions in their lifetimes.
• DoreenMichele 5y ago
  I enjoyed this so much. The stories about Ford were terrific. A lot of "wisdom" is contextual and gets mistaken for universal. We learn "X works" and, having been burned by everything else we tried, jealously guard the value of X as very special and precious. Scars obtained in the process of obtaining expertise are likely an underrecognized factor in experts becoming ossified in their opinions. They learned that everything else bites and this doesn't. They don't want to get bit again. Then conditions change and now nothing is guaranteed to work like it did before. It likely seems unfair to find their hard won wisdom is now irrelevant baggage.
  • visarga 5y ago
    Experts have done a lot of exploration and gained much experience, but just having abilities is nothing by itself. You need to exploit your abilities as well, employ them for good gain, and that takes time from exploration. Maybe you don't want to explore anymore because it's so good where you are at. This happened to Microsoft as well.
• publicdenial 5y ago
  Is Barbara Ferrer an "expert" even though she has no medical degree? Doesn't she know the facts and science that masking spreads germs?
• publicdenial 5y ago
  Is London Breed an expert in sucking dick? Is Kamala Harris an expert in getting rugburns on her knees?
• publicdenial 5y ago
  Is Joe Biden an expert in fucking little kids including his daughter Ashley in the shower (her words)?
• bigbanggoesbang 5y ago
  Is Gavin Newsom an expert in putting hair gel into his hair so he can be a proper hair-gel nazi?
• bigbanggoesbang 5y ago
  Is Nancy Pelosi an expert in insider trading? Damn, I wish I could get a lucrative government job like that.
• abeppu 5y ago
  This sounds like a bunch of boring truisms when stated this way, but perhaps a little extra insight can be wrung out by binding this to some more specific claims. There's a corner of the cognitive science literature about iterated learning in a Bayesian framing. A question it asked was roughly, "If we partition a dataset over a sequence of agents who each see only a slice, and we allow each agent to communicate something to the next agent down the line, what must be true of the communication between those agents for them to learn the same thing as a single agent who saw all of the data?" And roughly, for the sequence to converge to the same posterior as a single agent, each agent had to adopt an unbiased estimate of the previous agent's posterior as their prior. See esp work from Griffiths and colleagues. In a somewhat looser analogy, there's a family of techniques for distributed convex optimization (like ADMM), where a group of agents are collectively trying to optimize a function over data, and each agent sees only a slice of that data. Note especially that the way the data is partitioned can be entirely arbitrary, including e.g. training an SVM classifier where some agents see only positive data points. And for the group of agents to collectively converge to the global optimum, each local agent basically adds a large term to the function which penalizes disagreement with the other agents. In slightly hand-wavey terms, in either case, for the agents to reach a "correct" conclusion as a group, each needs to be able to give potentially an arbitrarily high weight to the information distilled from others. In the iterated learning case, the posterior distribution received from a previous agent may have more information than the likelihood distribution of the data that an individual agent sees. In the optimization case, the consensus term may contribute more to the local loss than the data that an individual agent sees. So in contexts where one is actually trying to solve the _same problem_ as a group, placing very high weight on the honest information received from previous experts can be critical. But in cases when you're _not_ all working on the same problem, it can be disastrous.
  • ericjang 5y ago
    > So in contexts where one is actually trying to solve the _same problem_ as a group, placing very high weight on the honest information received from previous experts can be critical. Another "loose attempt to make this argument rigorous" might be to invoke Grim Trigger [1] strategies from repeated PD games. A very large negative weight is placed on "dishonest" behavior across a communication channel (game). [1] https://en.wikipedia.org/wiki/Grim_trigger https://en.wikipedia.org/wiki/Grim_trigger
• renewiltord 5y ago
  The thing with believing that this time is different is that your worst case is you fail but your best case is you succeed. The thing with believing that every time is the same is that you guarantee mediocrity. When looking to the probability cone of future outcomes, some of us accept wider cones that encompass positive and negative outcomes. Others accept narrow cones where they constrain outcomes. I personally fall into the former category and also believe that societies that enable both kinds of people (well, all along the spectrum of cones) will succeed. I also believe that the biggest factor constraining your cone parameter is how much you have. The more you have, the less willing you are to expand your cone. This is because human beings are highly loss averse. I have seen this in my own life. The people most able to succeed are those who (intentionally or unintentionally) have a cone with the Markov property. No matter how far along the cone they are, the remainder of the cone looks the same. But Western society is prosperous and so the natural loss aversion leads to risk aversion. And so the balance shifts towards preservation. This article, then, is a message to that aspect of ours that is listening for the possibility that, perhaps, this time really is different.
• intrasight 5y ago
  I did enjoy the article. I forwarded it to some colleagues. I wasn't aware of Ford's rule. But I will say that the rule perhaps only applied in that place and time. I've worked in the nuclear industry, in defense, in aerospace. Not documenting failures in those industries would be a recipe for disaster. Technology is way too complicated today. The man who "either did not know or paid no attention to the previous figures" isn't very likely to help in advanced engineering disciplines. In basic research, I think this man or woman can still make an important contribution.
  • leobg 5y ago
    Oh, well. The early 1900s. Henry Ford not heeding safety precautions. Carl Jung having affairs with his therapy clients. Gotta break some eggs to make an industry, don’t you?
• squiffsquiff 5y ago
  Tldr: "society advances one funeral at a time"
• paulpauper 5y ago
  My heuristic is to extend current trends outwards. Stock prices will keep going higher, like it or not, even though the media for over a decade has been predicting a bear market. Valuations matter, but market dominance, growth, and network effects matter more. Large tech companies are excelling on all these fronts. Microsoft has been dominant and growing for 40 years and its share price reflects that. Google and Amazon have been doing it for the past 20, and Facebook for the past 10.
• paulpauper 5y ago
  Whether it's finance, geo politics, economics or even Covid, I have found that experts tend to have terrible track records. The same people today who are predicting Bitcoin will go to 250k in four years, made that very prediction four years ago. These people are being paid large sums of money to produce worse insights and worse performance that even random bloggers or random posters on r/wallstreetbets. It's hard to take these people seriously no matter how many degrees they have or how rich they are. It's obvious that prestige does not select for competence anymore.
  • antod 5y ago
    To me that kind of observation seems subject to all kinds of biases. You seem to be equating "prestige" in a topic with being an expert in a topic - the two are not necessarily related. eg the more outrageous or unusual the claim from an "expert" (hence the less likely to be right), the more memorable that claim will be, or the more likely it will get attention. And the more someone is a "nobody", the more likely that their numerous eventually wrong claims will be dismissed or forgotten about compared to the memorable times some random was correct by accident. Likewise I find the more certain someone is of something that is still uncertain, the more likely they will be to be wrong. The alternative of wishy washy consensus full of qualifications doesn't report well if at all, and tends to have minor errors picked apart and amplified even while broadly correct overall.
    • paulpauper 5y ago
      >n. And the more someone is a "nobody", the more likely that their numerous eventually wrong claims will be dismissed or forgotten about compared to the memorable times some random was correct by accident. I think this applies more to some subjects than others. I think math and physics experts have a much greater claim to epistemological certainty than political or finance experts. The vast majority of political experts were wrong both about trump getting nomination, wrong about him winning ,and then were wrong about the economy doing well under Trump. I think nobodies in finance and politics can do as well, if not better ,than experts.
• franze 5y ago
  I am sometimes called an expert. I strongly focus on things that I or others already tried and did not work. And then hypothesise if the circumstances are the same or similar this time around. Looking for arguments that they haven’t changed (enough). My track record is ok-ish.
• dsizzle 5y ago
  This seems to assume that experts' advice can only be valued (or not) as an appeal to authority. But that would ignore that experts can also provide _explanations_: "This won't work because this subsystem would violate the laws of physics" e.g. -- and that explanation might then spur someone to find an equivalent subsystem without that flaw, or perhaps one would find a flaw in the initial reasoning, or whatever. Similarly, seeing a list of past failures may inspire variations that seek to overcome the shortcoming without having to waste time first reproducing the same failure. One can try to learn _why_ it failed and use that to guide future attempts. The advice to be wary of experts reminds me of the advice to avoid criticism while brainstorming, the idea in common being that criticism and negativity supposedly stifles creativity. However, it turns out that criticism _enhances_ the brainstorming process https://mitsloan.mit.edu/ideas-made-to-matter/should-we-allow-criticism-while-brainstorming https://mitsloan.mit.edu/ideas-made-to-matter/should-we-allo... It seems that criticism from expertise could similarly be a boon to future advances.
  • 5faulker 5y ago
    From my experience, many of the problems can be solved by spending time on extended introspection. The problem with authorities is that they often don't have a firsthand experience of the problems itself.
  • Vetch 5y ago
    I came here to write something similar: the article does not pay enough attention to changing environments. The dotcom bubble ideas that are now successful do not share the same background environment of internet availability, bandwidth, networks of datacenters, storage, powerful portable computers, and all around higher digital literacy and people used to interacting with computers. If these things hadn't changed then trying and trying again would have continued to fail with high probability. As written, the statement by Ford is wrong, it is important to keep a kind of Tabu list detailing what didn't work in the absence of gradient information. What experts get wrong is they fail to be sensitive to dependent parameters that are not static (I know the article says something like this too but it sort of glosses over it). The problem is many of these are hard to say outside of hindsight. Perhaps listing the requirements before launching and listing the state of those requirements after failure, in addition to the idea might form a basis for what to retry. An expert might say something like "A website for dog food and toys will never work, we already did that 20 years ago and it failed spectacularly", when they should be saying "A Website for dog food did not work 20 years ago, here were our requirements and environment, has anything changed?". But even that isn't perfect so the process can't be deterministic.
• nickthemagicman 5y ago
  This article is trying to drive an artificial wedge between wisdom and innovation when there is none. Both are valuable to people. (regardless of age, sex, race, status, etc)
• anm89 5y ago
  Hilarious that he had to write all of this just to be able to sneak in a justification for MMT in the last paragraph. This is a complete fallacy. Don't listen to reason or experts, the world has changed! Don't worry about debt and deficits, we've invented fiscal policy(which has been around since forever), that old wisdom no longer applies! Believe it if you want. We live more or less in a society with free markets where, at least for people with saved wealth, individual outcomes can be highly variable by your personal ability to understand these systems and allocate your wealth effectively. If you think MMT is great and will have no consequences, then allocate your money accordingly. I'm going to assume that's not true. Just like everything else time will tell who was right.
  • rrrrrrrrrrrryan 5y ago
    > you think MMT is great and will have no consequences Doesn't MMT just tell us that we should focus on inflation instead of The Deficit? I don't think any of its adherents believe that printing money is consequence-free; rather, MMT states that over-printing money will eventually result in inflation, and we can choose to respond to that inflation by either reigning in government spending (which enables us to dial back the money printing), or by raising taxes (thereby decreasing the money supply). Its prescriptions are largely the same as the current mode of economic thought. If you spend too much, you'll have to pay for it somehow. Arguably, it just offers a better model of the trade-offs between taxation/spending/printing/inflation, and suggests a different feedback mechanism to drive policymaking decisions (inflation instead of deficit levels.)
    • anm89 5y ago
      > Doesn't MMT just tell us that we should focus on inflation instead of The Deficit? While this is roughly aligned with some of MMTs talking points, I don't think you can reduce MMT to just this. At a minimum these talking points have some other implications like: 1) Our current congress is capable of reigning in spending - I strongly disagree that there is any political will power to do this regardless of inflation. The last time we ran a budget surplus was 2001. Interest payments + treasury spending + social security / medicare pay as you gos are currently 111% of all tax receipts. So even if we want to reduce spending it's not really clear how you do that without putting SS/ medicare payments on hold because the Federal government is running a deficit EVEN IF YOU ELIMINATE 100% OF DISCRETIONARY SPENDING FROM THE BUDGET. And that still implies that if you wanted to have just a decrease in the deficit you would have to spend less on defense which is never going to happen. Yeah you could cut veterans spending, transportation or education (probably not in reality) but it wouldn't matter, they are a margin of error of the deficit. https://fiscal.treasury.gov/files/reports-statements/mts/mts1021.pdf https://fiscal.treasury.gov/files/reports-statements/mts/mts... https://twitter.com/lukegromen/status/1359529371875356672 https://twitter.com/lukegromen/status/1359529371875356672 2) That the timeframes of tax policy decisions exist on the same time scale as would be necessary to use tax policy decisions to regulate inflation. - This is the core fallacy of MMT, even much more so than point 1. Maybe congress can figure out how to reduce spending, maybe if for no other reason than spite by a congress controlled by a different party then the president. But the idea that there is any feasible way to fine tune taxation to manage inflation on a fast enough timescale to be useful is beyond the pale. We get maybe one meaningful tax plan per president and even that is a battle every single time. so we are talking about maybe on average a meaningful change to tax policy every 6 years. Yet how fast did inflation just jump? We went from a CPI of nothing to 5+ in a few months. Who is this magical bureaucrat who just jumps in and fine tunes the taxes to account for this? It simply does not exist and will not exist any time soon without a major political revolution in America. But the problem is the policy is justified based on the idea that micromanaging velocity and money supply is possible but any time I've heard an MMTer questioned on this point, they openly admit that this part would need to be worked out when the times comes. Anyway, no obligation to agree with me. But as I said, be sure you know what you're talking about if it's your own money on the line.
• jaybrendansmith 5y ago
  Now my own way to look at this, at least from a software product perspective but perhaps it's applicable everywhere: "Everything always gets easy if you wait long enough." It's almost a motto at this point, because there are so many technical challenges that prevented this or that product in the past, or more likely, made them niche utilities that required deep expertise to maintain. These utilities suddenly become building blocks that are simple and commoditized, allowing larger products to be built where before it was impossible, or at least very difficult. For anyone starting a software business: You can enter a crowded market as long as most of the difficult problems have almost been solved, and if you can establish that beach head, then acquire and sustain customers quickly enough, you can win, because everything is perpetually getting easier. The downside of course is that eventually your product will be commoditized into oblivion, but that's part of the game.
• abetusk 5y ago
  This line is what I think of whenever the cryptocurrency vitriol comes out here: """ Pets.com was mocked, but Chewy is now a $30 billion business. Webvan failed, but Instacart and UberEats are now thriving. eToys was a joke, but now look at Amazon. Some of the biggest businesses of the last 10 years are all in industries that were the starkest examples of stupidity 20 years ago. """
  • pfdietz 5y ago
    They laughed at Galileo, but they also laughed at Bozo the Clown.
  • b3morales 5y ago
    Taking this as a lesson is just survivorship bias, unless all the failed 90s companies have had their business plans replicated. Some ideas are ahead of their time; some are just bad.
  • the_cat_kittles 5y ago
    just because something is profitable doesnt make it not stupid.
  • cosmojg 5y ago
    If Bitcoin is the new Pets.com, what's the new Chewy? How long will it be until we find out?
    • ransom1538 5y ago
      IMHO Federal reserve backed crypto.
  • mehlmao 5y ago
    Chewy isn't profitable yet, is it? All of the new and successful example businesses (save Amazon) only exist because of money being thrown around, and can't sustain that forever.
• Tarucho 5y ago
  Everything is tied to the present situation. My past failures could be someone else tomorrow successes. But what about human nature knowledge?
• zackmorris 5y ago
  It's weird reading this as someone who identifies strongly as Gen X, witnessing how we can't seem to address existential threats like global climate change until the Boomers retire. Or a thousand other problems. I've spent the last 20+ years under a near-constant form of gaslighting where everybody told me my ideas would never work. Having to watch time and again as a different version of me wins the internet lottery. Dunno about all of you, but I'm kinda over it. My dad (a Boomer and self-proclaimed radical in the 1960/70s environmental spirit) reminded my just yesterday though that not all Boomers are alike, and that stereotypes hurt. I wish we had a different term for people who self-ossify, glorify ignorance, and take it upon themselves to dictate to others why they're wrong. I'm thinking of guys like Mitch McConnell and Milton Friedman, so sure in their certitude that it's inconceivable to them that their theology could actively harm the modern world. How do we resist such glacial forms of resignation?
  • gedy 5y ago
    Unfortunately , as a fellow Gen X, "Boomer" is turning into a term for "older than me and a little more successful/further along in life". Hate that some younger people are calling me a Boomer, when we didn't have pensions _or_ 401ks, our families were gutted with parents divorcing, etc.
  • pfdietz 5y ago
    Milton Friedman was a supporter of taxes on pollutants. He recognized that negative externalities are a case where government intervention is needed, and thought Pigovian taxes were the best way for government to do that. Were he alive today he'd be advocating carbon taxes.
    • zackmorris 5y ago
      Interesting, I didn't know that. Most of the clips I see of him online show him berating young people who aren't wrong IMHO. A bit serendipitous, but his name popped up just now when I was searching for an article about regulation to make companies responsible for their own externalities: https://www.bloomberg.com/opinion/articles/2021-10-29/cop26-capital-markets-can-t-save-the-planet-but-they-can-help https://www.bloomberg.com/opinion/articles/2021-10-29/cop26-... Big investors really do think of themselves as universal investors The typical attitude is: “If we’re a big investor, we’re universal investors. We can’t say we’re going to divest fossil fuels companies; we have to stay invested.” Other companies in the portfolio will continue to use carbon. At the same time, a universal investor needs to look after the wellbeing of its clients. That means making sure they have a healthy climate to breathe when they retire, and not just that they have an adequate cash flow. Put differently, the report says they believe that they “own” the negative externalities caused by the companies in their portfolio “due to the sheer depth and breadth of their holdings in all asset classes and regions.” As far as they are concerned: “Such ‘paper’ holdings do not negate their fiduciary responsibility to wider society.” This is a long way from the “shareholder value” philosophy associated with Milton Friedman that held sway for decades. Right now I put the responsibility for environmental collapse squarely on the shoulders of corporations, their shareholders and fundamentally consumers who (due to tragedy of the commons) frankly don't know how to begin to be sustainable when it takes everything they got to make it in today's world. To say that another way, I don't think that Friedman's views are fundamentally incorrect, I just think that they put attention in the wrong places. For example, capitalism is just economic evolution. It doesn't need to be defended as some alternative to social democracy. Capitalism isn't going anywhere, but it can be constrained by human will so that it doesn't make us slaves to it, toiling in the workaday world every day until we die as the earth burns around us.
• streamofdigits 5y ago
  Experts tend to be specialists, focused on silos and deep dives into specific domains. The world is instead getting radically interconnected as "everything" is represented - more or less faithfully - by fungible bits. We are going through an "anti-specialization" phase, where everything is in principle connected to everything. This amorphous digital ocean phase will probably not last, but it might be decades before a new landscape has settled.
  • musingsole 5y ago
    In the future, every individual must be an expert on a single subject to a currently unimaginable depth. However, expertise must be simultaneously robbed of prestige and its value relegated to only its utility.
• pezzana 5y ago
  > “Don’t buy stocks when the P/E ratio is over 20” was a good lesson to learn from the 1970s when interest rates were 7%, the Fed hadn’t yet learned what it’s capable of, and most businesses were cyclical manufacturing companies vs. asset-light digital services. Is it relevant today? At a broad, philosophical level, yes. In practical terms, probably not. In the same sense, buying stocks at all seemed like nothing but speculation in the 1920s because corporate disclosures were so opaque. By the 1970s that had changed, and you could begin to make rational, calculated long-term decisions that put the odds in your favor. The funny thing is that exactly this kind of talk was all the rage leading up to both the 2000 and 2008 crashes. The boom makes it impossible to imagine what the bust will look like, and vice versa. Most people are utterly incapable of seeing 180 degrees through the business cycle. They simply can't do it and rather extrapolate current conditions to infinity. This is a big part of boom/bust cycles. They are spaced out by just enough to entice a new group of greenhorns who ever more loudly beat the new paradigm drum. Then this new class learns that the business cycle is in fact immortal. But for many, it's a short-lived lesson. And that part about making "rational, calculated long-term decisions" is amusing. Because it's during the boom that companies start to engage in accounting shenanigans. The book-cooking will all come out in the next bust, just like it always has. 100x + price-to-earnings multiples will cover a multitude of sins. As Warren Buffet allegedly said, it's only when the tide goes out that you find out who's been swimming naked.
  • nly 5y ago
    The problem is we're all now dependent on stock market performance to make retirement feasible. Employer guaranteed defined-benefit pension schemes are dead. My uncles pension scheme was structured to pay out 1.5% of his final salary, inflation adjusted for the rest of his life, for each year he'd worked. He worked at one company his whole career, from age 18 to age 55, when he retired. Factoring in his mortgage, which he paid off prior to retirement, his disposable income never even dropped when he retired. Exact figures don't matter too much, but to achieve that with a defined-contribution pension you need to invest something in the range of 15%+ of your gross salary for 30 years and achieve a 7% above-inflation annualized investment return. And it won't be final salary but career average. Most people aren't doing this so are fucked
• socmovesus 5y ago
  Everyone is seeing this all wrong. Our problem is only with experts who linearly regress away other real people! A politically empowered minority see the masses a rounding error. Experts in economics tell us it’s OK to watch our family members die of preventable disease for profits sake. That doesn’t mean we don’t need Fauci’s and Grace Hopper’s. We need experts in qualifying physical reality not constraining criteria for success. Experts accept ideas are not sacrosanct.
• CalChris 5y ago
  > Webvan failed, but Instacart and UberEats are now thriving. Instacart has been in business since 2013 and had its first profitable month last year during the height of the quarantine. It’s probably closer to Webvan than anywhere near Amazon.
  • spaetzleesser 5y ago
    These companies still have no clue how to make profits. I wouldn’t call that “thriving”. They are still riding a huge investment bubble.
  • Zanfa 5y ago
    And Uber has made like $25 billion in losses with no end in sight?
• DeathArrow 5y ago
  >“Expertise is great, but it has a bad side effect. It tends to create an inability to accept new ideas.” Doesn't being an expert already contain the idea of continuous learning? Is expertise something static?
  • Reuzel 5y ago
    Experts are overfitting to the territory. It is the territory which changes (or expands), not their knowledge of it. There is a necessary reason to the decay in pheromone trails: adaptivity. Compare an army scout on a Starcraft map. First they make visible the entire map. Then they start tracking details. They detect patterns: if it rained last week, this area will be flooded, and other routes are faster. The army scout operationalized their expertise, made it valuable to others, and hence has something of value to exchange. Anything which attacks their operationalized expertise thus attacks their livelihood. They invested all this energy into materialization, and are prone to sunk-cost fallacy and economically motivated thinking. Don't patch their exploit! If the hive has enough energy for another scout, then too much communication and history of failure of the current expert may negatively effect their own diverse map constructions. There are multiple ways to victory and it is better to know all of these in case one way is flooded. But it is very risky for one agent to explore all these roads. Imagine any time the new scout wants to veer of the map, or when it has rained, the expert loudly exclaims: I already checked that road last year, you can not veer of the map there. Also, take these roads, they are always shorter when it rains. Now last month, the roads stopped flooding after rain, but the expert did not waste a failed exploration on that, and the new scout never gets to try (they also do not want to waste energy on failures, but now contribute to enforcing the wasted/stale energy materialization of the outdated expert. For the expert to admit their ideas are outdated, is to admit their own loss of value. Retiring a fighter who practiced a defense against a kick people stopped using in the 90s. Hardly, if ever, they themselves step down. They want to keep "continuous learning" and adding even more detail to their expert map. When the hive veers off the map, the expert knows they are at a disadvantage, their value no more than a newby scout. Ossification is in their best interest (but not in the interest of the hive). https://www.pnas.org/content/118/41/e2021636118 https://www.pnas.org/content/118/41/e2021636118 The size of scientific fields may impede the rise of new ideas. Examining 1.8 billion citations among 90 million papers across 241 subjects, we find a deluge of papers does not lead to turnover of central ideas in a field, but rather to ossification of canon. Scholars in fields where many papers are published annually face difficulty getting published, read, and cited unless their work references already widely cited articles. New papers containing potentially important contributions cannot garner field-wide attention through gradual processes of diffusion. These findings suggest fundamental progress may be stymied if quantitative growth of scientific endeavors—in number of scientists, institutes, and papers—is not balanced by structures fostering disruptive scholarship and focusing attention on novel ideas. A crafts teacher divvied up his class in two parts. One part he taught his expertise at vase making, down to the level of detail, in context of art history. They were to be graded on a single vase, so failure was frustrating and a frightening loss of energy/hurt ego. The other part of the class was to be graded on the number of vases they made. The crafts teacher focused on teaching them to learn from mistakes, cut losses and start over, how to get better at the mechanics instead of the art. In the end, the part of the class graded for most vases made, also created the highest-graded single vases. Failure was a necessary part of the initial exploration phase, allowing them to exploit unclaimed ground, instead of trial-error-mimicking already-existing expertise. There is a lesson there, I think. Deep Learning comes to mind, before and after its hype. Where the statisticians correctly calculated flooded roads of overparametrization, engineers still charged ahead, and some actually came out alive on the other side, establishing a shortcut/conquered obstacle. Some statisticians still don't want to get their feet wet. And this ok too! There may be more elegant ways, which keeps dry boots with similar outcomes. Let them find these.
• lettergram 5y ago
  One thing I also find interesting are when people think the rules change when they really don’t. For instance, Green energy is the future yes, but it’ll take generations. So people assume the rules change faster than reality.
  • ryukafalz 5y ago
    It better not take generations! We don't have that kind of time.
• the_cat_kittles 5y ago
  this author is revealing something embarassing about themselves, namely that they think of expertise in almost exclusively financial terms. knowing how to get rich is not really the same thing as expertise to me.
• cblconfederate 5y ago
  Not just experts, visionaries too. One that strikes me as odd is Electric cars. Why just make a 'faster horse'? We can have battery transport options in all kinds of shapes and forms, why sell sedans and SUVs and underutilize the road networks?
• polskibus 5y ago
  Timing is king. If you know when the current experts will become the old fools, and bet on it, you can be the richest man ever. It’s akin to knowing when the stock will rise or fall. Close to impossible unless you know more than others (and therefore become an expert ).
• thesausageking 5y ago
  I can't read a Collaborative Fund post without remembering the email to a former board member the founder of CircleUp wrote to the partner there who was on his board: https://docs.google.com/document/d/17tEc9ETL4tjfTmNbpwJJ5OSx1c4j10ZBgeYXWGzO30Y/edit https://docs.google.com/document/d/17tEc9ETL4tjfTmNbpwJJ5OSx...
• devops000 5y ago
  You should consider the shareholder yield instead dividend yield
• germandiago 5y ago
  OTOH a sentence attributed to Einstein was: "Insanity is doing the same thing over and over again and expecting different results.”
• epa 5y ago
  The idea of pets.com vs chewy is a function of bias due to failed events is a bit stretched. The real reason is consumers trust and access to online payments. In 2000 very few were online shopping because the experience was clunky and unsafe. Mobile and fraud protection changed the game.
• steve76 5y ago
  >Not a day goes by that I don’t become more confident that the secret to business and investing is identifying the few things that never change and hold onto them for dear life, and identifying what evolves and be ready to adapt those views quickly. So that's all it takes. God you're spoiled. Talk to me when you've been on a ventilator.
• pepoluan 5y ago
  I disagree with Ford's principle of "not logging failures". The key is to log _in_detail_ ... the setup, the materials used, the failure, and most importantly, how and why it failed. If someone else wants to try, they can see that if they try the _exact_ same way they will end up with failure. But they can -- and should be encouraged to -- try with changes to the variables.
• kragen 5y ago
  The segue from Henry Ford's chain casting into buying stocks with a high P/E ratio seems sort of intentionally irrational; it would have made as much sense to tout perpetual motion machines. They laughed at continental drift! They laughed at Fulton! The underlying value of a stock is the net present value of its future paid-out earnings. This is just a fact of the financial system, as fundamental to it as the conservation of energy is to the physical universe. It should have been mentioned in the article. The reason P/E ratios vary is that companies' earnings change over time and companies go bankrupt. If you buy a stock with a P/E ratio of 20 years and then the company's earnings stay the same forever, eventually those earnings will find their way into dividends or buybacks, and your return on investment will be 5% per year, forever. If the P/E ratio is 10 years, 10%. If the P/E ratio is 50 years, 2%. (If the company invests the earnings in assets, it doesn't pay them out in dividends or buybacks that year. But then the depreciation of those assets is deducted from its earnings in following years, so to maintain the same earnings, it would need to have higher earnings-plus-depreciation. So ultimately it all balances out.) So when people rationally buy a stock with a P/E ratio of over 20 years, either: 1. They're expecting the company's earnings to go up by enough to put it back below 20; or: 2. They're expecting less than 5% per year return on investment, which probably means they're treating the company as a very-low-risk investment like commercial paper rather than like an ordinary stock; or: 3. They're hoping to find a bigger fool to unload the stock on before its price returns to what its earnings can rationally justify. If you buy and hold a stock whose P/E ratio is 350 years, like Tesla today, and those earnings never change, you're getting an 0.3% annual return, forever. Which, and forgive me because I'm not an expert here, sucks. (Apologies for including the correct units on P/E ratios. I'm not the kind of person who thinks "vega" is a letter of the Greek alphabet.)