Wednesday, October 14, 2020
Volume 1, Issue 45
“One thing I have learned in a long life: that all our science, measured against reality, is primitive and childlike—and yet it is the most precious thing we have.”
Do you believe in science?
This question has come up frequently during the COVID pandemic, yet what does it really mean? The truth is that scientific inquiry never ends and some of the most important discoveries in human history have been the result of questioning the prevailing scientific consensus. Science is never settled or static; it is constantly evolving as human knowledge and comprehension advances.
Take the question of whether masks are effective for preventing the spread of COVID. As I described in early May, public health officials initially minimized the efficacy of masks before the consensus shifted to widespread advocacy of masks as a simple and low-cost preventative measure when coupled with social distancing. During March and April, as more information became known and the prevailing consensus was questioned, a new scientific consensus emerged.
Matt Ridley considers the broader implications of this topic in What the Pandemic Has Taught Us About Science, an essay that appeared in the Wall Street Journal last weekend. While he emphasizes that scientific inquiry must always be open to new ideas and theories, he also grapples with the question of when openness risks indulging cranks and people with ulterior motives:
… One of the hardest questions a science commentator faces is when to take a heretic seriously. It’s tempting for established scientists to use arguments from authority to dismiss reasonable challenges, but not every maverick is a new Galileo. As the astronomer Carl Sagan once put it, “Too much openness and you accept every notion, idea and hypothesis—which is tantamount to knowing nothing. Too much skepticism—especially rejection of new ideas before they are adequately tested—and you’re not only unpleasantly grumpy, but also closed to the advance of science.” In other words, as some wit once put it, don’t be so open-minded that your brains fall out.
Balancing open-mindedness with skepticism is indeed the most difficult aspect of interpreting scientific topics, not only for those of us who lack formal training in the relevant field but for scientists themselves, especially those who have tied their reputation to a theory that is under attack. But we have no choice but to attempt to be informed and we cannot afford to not have opinions. When it comes to a pandemic with life and death implications, knowing what to believe becomes more than an academic matter.
So, if the question is whether I “believe in science”, the answer is a resounding yes, but we must have the courage and intellectual honesty to view scientific inquiry as a process rather than a destination. This can be difficult in a highly charged political environment and when life-and-death matters are at stake, but it is our duty as citizens to make the attempt.
Feynman on the Scientific Method
The Limits of Simplicity
A famous quote attributed to Albert Einstein is that “everything should be made as simple as possible, but no simpler.” What holds true for scientific theories also is true for the design of products and services, as a recent Farnam Street essay points out.
Tesler’s law of the conservation of complexity states that the total complexity of a system is a constant. If you make the user’s interaction with a system simpler, then complexity must increase behind the scenes. It is counterintuitive to think that some processes can be made too simple, but this can happen when users lose the ability to easily control complexity and are only presented with constrained default choices.
Making a process appear too simple can also reduce confidence in the system if users have an intuitive understanding that the process is complex behind the scenes. One of the challenges facing autonomous vehicle manufacturers will be to give owners a sense of control, at least while the technology is not well established.
Silicon Valley Pay Cuts Ignite Tech-Industry Covid-19 Tensions by Katherine Bindley and Eliot Brown, October 11, 2020. It just seems too good to be true … will it really be possible for technology workers in San Francisco or Seattle to decamp to Boise or Salt Lake City while continuing to enjoy their current pay packages? COVID has demonstrated that many jobs can be accomplished remotely. But it has always seemed doubtful that employees would enjoy all of the benefits of relocating to less expensive metro areas. (Wall Street Journal)
Your Cash Earns Zip, Zilch, Nada. Don’t Make It Worse by Jason Zweig, October 9, 2020. Reaching for yield in today’s environment is extremely tempting. Treasury bills yield around 0.1% while the ten year treasury note pays a meager 0.79%. This is well below the Federal Reserve’s inflation target of 2%. As Jason Zweig points out, “Investing for income in this environment is like trying to squeeze water out of a fistful of sand at high noon in Death Valley.” Yet investors who take risks with capital they cannot afford to lose are tempting fate. If the security you are considering pays much more than 1%, it’s certain that you are taking at least some risk of principal loss. (Wall Street Journal)
This Thing Predicts Everything by Ryan Holiday, October 6, 2020. Many factors influence whether an individual has a successful life, but Ryan Holiday makes the case that character reigns supreme as a predictor of outcomes. Character is fate. Some good people will fail and bad people will succeed, but character traits will predict the kinds of actions people are likely to take in life. “Who we are, what we believe, the standard we hold ourselves to, the things we do regularly, our personality traits—ultimately these are all better predictors of the trajectory of our lives than talent, resources, or anything else.” (RyanHoliday.net)
Dillard’s jumps more than 20% after one of Buffett’s investing lieutenants discloses personal stake by Pippa Stevens, October 12, 2020. Ted Weschler has reported that he owns over a million shares of Dillard’s representing nearly 6% of the company’s shares outstanding. Weschler was hired as an investment manager in 2012 and, along with Todd Combs, now manages a significant amount of capital at Berkshire Hathaway. However, the Dillard’s purchase is a personal investment for Weschler, one that amounted to around $50 million based on where shares were recently trading. I initially learned about this development from an issue of the Market Crumbs daily newsletter which I recommend. (CBNC)
Accountable to Darwin vs. Accountable to Newton by Morgan Housel, October 7, 2020. It is important to understand whether Darwin or Newton is “in control”, and Darwin is in control most of the time: “He has his fingers in anything that involves people making subjective decisions. In business and investing his guiding principle was summed up by author Maggie Mahar who wrote, “men resist randomness; markets resist prophecy.” He has little tolerance for outliers and no tolerance for fragility.” (Collaborative Fund)
The Knights Templar and Eunate
It seems like more than a year ago, but the photos below of the Church of Saint Mary of Eunate were taken exactly one year ago. From an American perspective, Europe is an ancient place, a land of ancient architecture and culture. But locals are used to walking through landscapes that have not changed much in several centuries.
The COVID pandemic has demonstrated that there is much we take for granted. The ability to travel the world with few restrictions seems hard to imagine today.
Copyright, Disclosures, and Privacy Information
Nothing in this newsletter constitutes investment advice and all content is subject to the copyright and disclaimer policy of The Rational Walk LLC.
Your privacy is taken very seriously. No email addresses or any other subscribers information is ever sold or provided to third parties. If you choose to unsubscribe at any time, you will no longer receive any further communications of any kind.