books

Crichton Risk (n)

Crichton Risk (n) – A plausible, yet improbable risk scenario that could easily serve as the premise for a Michael Crichton novel, such as space junk crashing to earth carrying lethal viruses; nanobots running amok; genetically engineered dinosaurs eating theme park visitors. E.g. The Large Hadron Collider accidentally turning the Earth into a black hole is one hell of a Crichton risk.”

See also: tail risk, Black Swan theory.

James Ellroy and Elmore Leonard on authors making money

Something that’s always driven me crazy is writers who think of writing as a “calling” and not a business. Sure, you may think of writing as a passion. But if you want anyone else to read what you’ve written your passion is eventually going to collide with someone else’s business interests. Elmore Leonard put it this way:

I think any writer is a fool if he doesn’t do it for money. There needs to be some kind of incentive in addition to the project. It all goes together. It’s fun to sit there and think of characters and get them into action, then be paid for it. I can’t believe it when writers tell me ‘I don’t want to show my work to anybody.’

Perhaps predictably, James Ellroy expressed his opinion even more colorfully:

L.A. Confidential, the movie, is the best thing that happened to me in my career that I had absolutely nothing to do with. It was a fluke—and a wonderful one—and it is never going to happen again—a movie of that quality.

Here’s my final comment on L.A. Confidential, the movie: I go to a video store in Prairie Village, Kansas. The youngsters who work there know me as the guy who wrote L.A. Confidential. They tell all the little old ladies who come in there to get their G-rated family flick. They come up to me, they say, “OOOO… you wrote L.A. Confidential…. Oh, what a wonderful, wonderful movie. I saw it four times. You don’t see storytelling like that on the screen anymore.” … I smile, I say, “Yes, it’s a wonderful movie, and a salutary adaptation of my wonderful novel. But listen, Granny: You love the movie. Did you go out and buy the book?” And Granny invariably says, “Well, no, I didn’t.” And I say to Granny, “Then what the fuck good are you to me?

My five favorite business books

I try to read both fiction and non-fiction. Most of my non-fiction reading is history. But sometimes I also read business books (e.g. The Little Book of Valuation, Secrets of Question Based Selling). Sometimes I even read books that are a little of both. Here are my five favorite business books, in no particular order:

  • The Smartest Guys in the Room by Bethany McLean – The rise and fall of Enron in epic fashion. Also a powerful illustration of how divergent accounting earnings and business can become when investors, analysts and media fall prey to hype.
  • When Genius Failed by Roger Lowenstein – This is the story of the world’s most famous hedge fund meltdown, and an example of “experts” being too smart for their own good (see also #5 below).
  • Barbarians at the Gate by Bryan Burrough and John Helyar – Specifically this is a book about the leveraged buyout of RJR Nabisco. But in a much broader sense it’s also about the massive change in corporate cultures that occurred in the 1980s, and how dangerous it is for successful organizations to allow stability to turn into complacency.
  • The Prize by Daniel Yergin – Everything you would ever need (or want) to know about the history of the oil business.
  • Fooled By Randomness by Nicholas Nassim Taleb – More of a collection of essay-like musings, Taleb argues evolution has programmed us to make really poor financial decisions.

Happy reading!

Stoked to start reading Anathem by Neal Stephenson

Anathem cover

Anathem by Neal Stephenson

It is with much excitement and no small amount of trepidation that I begin reading Anathem by Neal Stephenson, which Christopher Brookmyre described thusly in his review for The Guardian:

…the beating heart of this novel is philosophy, and if I may borrow an analogy from Professor Stephen Law, at times Anathem is not so much a work-out in the philosophy gym as philosophy extreme sports. The history of the avout is punctuated by the breakthrough ideas of saunts, all of them replicating concepts familiar to us here on Earth through Plato, Euclid, Leibniz, Newton and so on. Edmund Husserl’s copper ashtray becomes Atamant’s Bowl; Occam’s razor becomes Saunt Gardan’s Steelyard. This is more than mere facsimile: the most powerful and controversial idea among the avout concerns the “Hylaean Theoric World”, and the question of whether the same ideas will occur independently to thinkers on different planets because there are certain transcendental truths – prime numbers, the value of pi, the laws of geometry – that exist on some higher plane. Taking his cue from the likes of Hugh Everett and Max Tegmark, Stephenson postulates that, while certain conditions are necessary for the cosmos to have taken shape (various laws of physics, such as the speed of light, having to be set at very precise values), there is still room for tiny variations in those values to create parallel cosmoses in which the make-up of matter is minutely distinct. It is the many worlds theory evoked with a greater elegance than I have read in any previous work of “speculative fiction”.

I needed a break from Stephenson after I walked away from REAMDE. I loved Cryptonomicon and Snow Crash. I really wanted to like REAMDE, too. Don’t get me wrong. There were certainly flashes of brilliance in that novel (particularly when Stephenson delved into story behind the novel’s World of Warcraft-like MMORPG, and his use of ransomware as a major plot point). Aside from that, however, REAMDE came up way short on the heavy ideas that make Stephenson’s best fiction so enjoyable.

This does not look like it’s going to be a problem with Anathem.

“The percentage will always stand fast”

fools die cover

Fools Die by Mario Puzo

My favorite Mario Puzo book is not The Godfather. Instead it is Fools Die. At first glance you might think Fools Die is a rambling chunk of literary fiction that is more a catalogue of events than an actual novel. However, this structure is quite appropriate  because in all actuality Fools Die is about randomness.

Perhaps nothing illustrates this point better than the scene where the casino boss, Gronevelt, takes one of the characters out for an educational gambling binge (only in describing a novel like Fools Die could I write a phrase like “educational gambling binge” with a straight face):

Cully remembered one period in the history of the Xanadu Hotel when three months straight the Xanadu dice tables had lost money every night. The players were getting rich. Cully was sure there was a scam going on. He had fired all of the dice pit personnel. Gronevelt had all the dice analyzed by scientific laboratories. Nothing helped. Cully and the casino manager were sure somebody had come up with a new scientific device to control the roll of the dice. There could be no other explanation. Only Gronevelt held fast.

“Don’t worry,” he said, “the percentage will work.”

And sure enough, after three months the dice had swung just as wildly the other way. The dice pit had winning tables every night for over three months. At the end of the year it had all evened out. Gronevelt had had a congratulatory drink with Cully and said, “You can lose faith in everything, religion and God, women and love, good and evil, war and peace. You name it. But the percentage will always stand fast.”

[…]  By the middle of the second week, Gronevelt, despite all his skill, was sliding downhill. The percentages were grinding him into dust. And at the end of the two weeks he had lost his million dollars. When he bet his last stack of chips and lost, Gronevelt turned to Cully and smiled. He seemed to be delighted, which struck Cully as ominous. “It’s the only way to live,” Gronevelt said. “You have to live going with the percentage. Otherwise life is not worthwhile. Always remember that,” he told Cully. “Everything you do in life use percentage as your god.”

If there’s a practical lesson in all this it’s don’t play the lottery. But I think there’s something vaguely spiritual going on here. Maybe a super dysfunctional kind of zen (oxymoron, anyone?).  In the words of the Greek statesman/philosopher Solon: “let no man be called happy before his death. Till then he is not happy, only lucky.”

Why we fight

the crimean war by orlando figesI like to read fiction and non-fiction parallel to one another. Right now on the fiction front I’m tackling William Gibson’s Mona Lisa Overdrive. My current non-fiction book of choice, on the other hand, is The Crimean War: A History Orlando Figes. I like non-fiction because it tends to make me think. Contrary to what you may have learned in school all history is written from a particular point of view, and emphasizes a particular narrative. The best history is quite thought-provoking. In fact it makes you question things happening in the present.

With that in mind, a quote:

As the great historian of the Crimean War Alexander Kinglake wrote (and his words could be applied to any war): “The labour of putting into writing the grounds for a momentous course of action is a wholesome discipline for statesmen; and it would be well for mankind if, at a time when the question were really in suspense, the friends of a policy leading towards war were obliged to come out of the mist of oral intercourse and private notes, and to put their view into a firm piece of writing.”

If such a document had been recorded by those responsible for the Crimean War, it would have disclosed that their real aim was to reduce the size and power of Russia for the benefit of ‘Europe’ and the Western powers in particular, but this could not be said in the Queen’s message, which spoke instead in the vaguest terms of defending Turkey, without any selfish interests, ‘for the cause of right against injustice.’

Nothing plays better with the mob than a selfless war waged with righteous fury. Convenient, too, that it’s members of the mob who end up dying of dysentery in the trenches, rather than members of the political class.

In Russia, novel read you

Day of the Oprichnik cover

Day of the Oprichnik

Vladimir Sorokin’s Day of the Oprichnik is Ivan the Terrible meets A Clockwork Orange. It’s a day in the life of a secret policeman in a futuristic Russia. The Tsardom of Russia is back in full force. Andrei Danilovich Komiaga drives a red Mercedes adorned with a severed dog’s head (servants pick a new one each day). His ringtone features the sounds a man being tortured to death. His workday consists mostly of extortion and murder, with the occasional odd gang rape for good measure. And when he’s not burning, raping and pillaging Komiaga spends most of his free time on drugs.

This novel has its roots in Ivan the Terrible’s oprichnina. From Wikipedia:

The oprichnina consisted of a separate territory within the borders of Russia, mostly in the territory of the former Novgorod Republic in the north. This region included many of the financial centers of the state, including the salt region of Staraia Russa and prominent merchant towns. Ivan held exclusive power over the oprichnina territory. The Boyar Council ruled the zemshchina (‘land’), the second division of the state. Until 1568, the oprichnina relied upon many administrative institutions under zemshchina jurisdiction. Only when conflict between the zemshchina and oprichnina reached its peak did Ivan create independent institutions within the oprichnina.

As for methods:

The first wave of persecutions targeted primarily the princely clans of Russia, notably the influential families of Suzdal’. Ivan executed, exiled, or tortured prominent members of the boyar clans on questionable accusations of conspiracy. 1566 saw the oprichnina extended to eight central districts. Of the 12,000 nobles there, 570 became oprichniks, the rest were expelled. They had to make their way to the zemschina in mid winter, peasants who helped them were executed.

Sorokin’s Russia has also turned inward. The king (His Majesty, Komiaga exclaims breathlessly)  is obsessed with orthodox religion. He’s outlawed cursing. Blasphemy is punishable by death (And thank God, Komiaga would add). In fact there are two forms of religion in Day of the Oprichnik: traditional Russian Orthodox religion and a religion of absolute loyalty to the state.

The novel clearly links Ivan the Terrible’s Russia to contemporary, Putin-led Russia. It’s a vicious satire of crony capitalism, religious fanaticism and obscene nationalism. Day of the Oprichnik is not a particularly pleasant read . It’s certainly not for the faint of heart. Fortunately it’s quick and punchy. Sorokin hardly wastes a word.

Worth a look if you’ve got a strong stomach.