I recently read an obituary of someone the town in which I live. He had died from complications of Alzheimer’s at the age of 73. What had caught my attention and stimulated my curiosity was that he had been a runner. I’m a runner too so I read the lengthy obituary just out of curiosity about the rest of his life, and yes, what sort of life had ...
Facebook has been roasted lately due to its user privacy issues, not to mention its hosting of those infamous fake news feeds. No good deed goes unvarnished… But I guess they’re not the only ones to have that problem: how about the Federal Office of Personnel Management where 4 million personnel records were stolen by hackers, including probably ...
Did you get the flu? I was so lucky, I got it twice! So lots of stuff about influenza in the news. Other than that, how could you ever get excited about it? Influenza is a virus. Everyone knows that too. Nothing exciting there either, right? But what if there were many more of the little critters than we had imagined? What if they were literall...
Did you notice the news about Scott Kelly, the US astronaut? His DNA changed while he was in space, 7% of it to be exact. Actually it turns out that the report wasn’t quite correct; in fact the way his DNA was expressed changed for 7% of it. Whatever, his body changed. How so? Well for a start he got 2 inches taller (but that was temporary). And ...
So now several people have been killed in accidents in self-driving cars. What gives? I’ve been driving for many years but I don’t regard myself as a good driver. For one thing I've got poor eyesight. I get easily confused at night and sometime in heavy traffic conditions. Here are three of the driving situations in which I feel most uncomfortabl...
So we’ve had a little excitement about the US imposing tariffs on steel and aluminum and now we’re into a global frisson about the possibility of a global trade war. As we know, they lead to depressions, or so it is said. But here’s the question I want to ask: if a world has declining population growth rates, does free trade still promise the same ...
Stephen Hawking is dead and we will all miss him. One of the reasons for missing him is that he really was responsible for popularizing black holes. Now any Tom, Dick and Harry can toss the term around, talking knowledgeably about singularities, black hole horizons and information loss. All way above my pay grade. But I have a question. What is ins...
We’ve just seen China approve a lifting of term limits on their leader, an epochal decision. Clearly there’s a move to authoritarian leadership globally. As well as China there’s the usual suspects like Russia, Belarus and North Korea, but now there’s some new/newish members of the club including Turkey, Hungary, Poland, Venezuela, Malaysia and Mya...
We’ve just had the latest Winter Olympics in South Korea. Of course it was overshadowed by the nuclear threats hurled at each other by the US and North Korea. Olympics are supposed to be about peace but this clearly wasn’t a very peaceable atmosphere. Now the Dear Respected Comrade is on an ostensible peace offensive, let’s see how long that lasts....
So many articles about how good exercise is for you that it’s become positively nauseating. Even a confirmed curmudgeon like me can’t find anything wrong with it. Yet the CDC says that only 20% of adults actually meet their do-good exercise guidelines (both aerobic and muscle-strengthening activity). That means that 80% of Americans don’t do en...
Recently I have attended three conferences on widely divergent topics. Every one of them featured blockchain and what everyone was going to do about it and with it. It seems that the contemporary standard for demonstrating your innovativeness is showing you are into blockchain. Blockchain is, according to the banks, going to transform the finan...
The amazing Musk has done it again with the Falcon Heavy! Is it possible he did even more than he told us? According to news reports the original SpaceX launch plan was to get into Mars’ orbit, but the space module overshot and is now on its way to the asteroid belt, where it would presumably be lost. Such a pity. Hmm now let me see. Overshoot?...
Now bitcoin and other digital currencies have been cratering. Does that spell their end? Nope, not at all, maybe quite to the contrary. There’s a new game in town for crypto-currencies. It’s called quantum computing. We’re now well into a new arms race for the most powerful quantum computer. IBM has just upped the ante with a 50 qubit quantum compu...
AI has been the talk of the town at CES. There’s suitcases that follow you, more smart speakers and that’s the least of it. But I’m feeling uneasy with all this AI stuff. Part of my concern is it all sounds too easy. Just add more intelligence and everything’s ok. Doesn’t that all sound too easy, too pat? If you stuff even more intelligence into yo...
Now the Falcon Heavy engines from SpaceX are about to be tested, the idea that humans are going to colonize at least some of the planets in our Solar System is now starting to actually look credible, even imminently so. And so of course we are all waiting with bated breath to see if we will find ET once we get there. The scientific consensus is sta...
Here’s some really bad news. Pfizer has just terminated its work in developing a drug to cure Alzheimer’s. Obviously Pfizer has thrown in the towel. Here’s some more grim news: Axovant has just announced that’s its Alzheimer’s drug just failed its trials. There have been a long series of failures in this area (“The List of Failed Alzheimer’s Drug T...
Bitcoin, ICOs, blockchain, fintech, CRISPR+20, RAS, gene splicing, XNA, SpaceX, Hyperloop, the Boring Company, algorithms, AI, Siri, and so on and on and on… Incubators, accelerators, innovation hubs, skunk works, Chief Innovation Officers, innovation catalysts, learning to be an innovator, blah blah and so on and on and on… People glued to their s...
Fintech is hot; as I’m sure I don’t need to remind you. I just went online to find the top 10 opportunities. Here they are. I can’t argue with any of the topics on the list.
But here’s the thing. When you check them all out there’s no mention of behavioral finance. And here’s me thinking this is all about FIN- Tech. Get it? Am I missing something?
Could it be that the fintech crowd doesn’t think behavior matters? That it is not an important variable? Or that psychology is just too soft and squishy a subject to be worthy of serious scientific endeavor, or too new to be taken seriously….? Hmm, that’s worth exploring further.
I wonder what could be going on here? This brings back some sensitive memories, like when it was topical to talk about the hard and the soft sciences, with the soft sciences receiving a small but discernible curl of the lip. Like, they’re not worth exploring if you are into the real hard stuff.
Now of course there would be many who don’t consider economics to be a hard science, its (pseudo?) math focus notwithstanding. But you would think that finance would just about make the cut, Black-Scholes falling from grace notwithstanding. But in this telling, finance is the hard science and behavioral finance the soft-science underbelly.
Here’s what I think is going on. The economics guys have teamed up with the MBAs, both of whom are actually closet positivists who think that psychology, behavioral and neuroscience are too imprecise to be worthy of their attention. What is worthy are Big Data, math with rigor (which excludes pure math of course) and algorithmic ways of doing things, souped up with AI as necessary. But behavior just doesn’t make the cut.
So the cultural divide still persists, almost 60 years after CP Snow coined the term The Two Cultures. Before, the dichotomy du jour was hard vs soft science. Now it’s fintech vs behavioral strategy and neuroscience. Plus ca change etc. etc.
What all of this seems to mean is that the fintech types see behavior as a step too far and they really are not going to go there, no matter what. They were never taught about behavioral finance because the academics largely have ignored it, 3 Nobel Prizes notwithstanding. Until it’s shoved in their face by dark reality, it’s going to remain in the shadows, at least for them.
Why would the fintechnorati feel this way? Could it be because behavioral finance takes formal account of irrationality and they still remember all the lessons which drummed into them that homo economicus always makes rational decisions, reality to the contrary? Or could it be that it just makes the math too hard? Who knows? In 20 years people will be writing books on this, just like the books that hundreds of years later excoriated the inquisition for being so crassly stupid about heliocentrism.
Ironically the popular writers have picked up the cudgels on this one even though the academics and fintech types haven’t. Authors such as Malcom Gladwell and Nouriel Roubini are writing for the people who have to use this stuff and that’s why they’re so popular. But the professionals are missing this boat in a really big and splendiferous way.
My sense is that more aggressive and innovative types of going to run with this ball and outwit the fintech traditionalists. The Chinese maybe? Anthropologists, God forbid?
Science has a nasty way of going in the right direction anyway and making hitherto sceptics look like know-nothings. Watch for it to happen with fintech too.
Now we know that blockchain is revolutionizing not just digital currencies but also accounting and increasingly other areas of finance. So blockchain is fundamentally a financial technology right? I’m not so sure. Check out my Sanctus Sanctorum, Wikipedia, and it will tell you that blockchain is a distributed ledger. As such it can give you a ...
For lovers of democracy, what’s not to dislike? Dystopian news from Lebanon, Saudi Arabia, Yemen, Ukraine, North Korea and so on. Not to mention German, Hungary, Myanmar. Even (especially?) the US! Could things get worse? You remember “The End of History” by Francis Fukuyama? Liberalism and democracy triumph, nothing left to do until mankind reache...
