Perfectly Unperfect

A new year begins, another challenge arises to fulfill my perpetual annual resolution. Here is how I achieved it (changing my mind on a strongly-held belief).

I have always had perfectionist tendencies. For a while when I was younger, they were quite strong. I beat them back. But the tendency remained. And I reconciled that with the belief that it was a positive quality. That striving for perfection, in good measure, was an enhancement to achieving my goals. 

The better I've come to understand failure, the more I have doubted perfectionism. I now no longer belief it is a positive quality. My aha moment came last year while reading Megan McArdle's book, The Up Side of Down: Why Failing Well Is the Key to Success. (Imperfection confession: I haven't finished the book yet. My reading discipline is far from perfect.)

The better you are at something the naturally higher-quality your work will be. Trying to make it perfect is a waste of time. Striving to be perfect is a fool's errand. Generally if editing requires more resources than the original creation, then the endeavor was a failure to begin with.

Effective is underrated. "Easy to Fix" is generally far better in all respects than "Hard to Break". 

Don't get me wrong; working hard is a virtue. Striving for improvement even after much has already been achieved is a desirable quality--when well balanced against the cost. Perfectionism is a different animal. In fact it is an alien to both this world and this universe. It is simply the drive to get more than can be expected. It is alchemy masquerading as practice. 

PS. As a corollary I have also always had completionist tendencies. However, in that case I've known for quite a while that it is a negative quality, but I've struggled to have the resolve to fight it. Tyler Cowen is a role model to follow in this regard (check out the transcript (or listen) at 19:01). It was listening to Penn Jillette's podcast Penn's Sunday School last year that got me thinking a lot about completionism. Penn is a classic example as he will readily admit. He says visiting a museum with him is torture because he insists on reading each and every display fully. 

The Tourist's Perspective

Travel is fatal to prejudice, bigotry, and narrow-mindedness, and many of our people need it sorely on these accounts. Broad, wholesome, charitable views of men and things cannot be acquired by vegetating in one little corner of the earth all one’s lifetime.

--Mark Twain

Something I've been thinking about is how regular, routine life is a constant business trip for most of us. Yet it doesn't have to be. When we are truly on a leisure vacation, we can let go and detach. At least that is what we should be able to do.

Some are better at it than others. Some travel with a sense of obligation to see the things they are supposed to see and an expectation that the world owes them something. Those with this attitude tend to be miserable whether on the holiday road or not. For them the answer to 'how much does it cost?' is always 'how much do you got?'

Others take a healthier perspective viewing travel as a quest for fun. To unwind, explore, and grow--spiritually, mentally, physically. There is no reason to limit this quest and this mindset to the 10 days a year you sleep away from home. Sure the world can be hot and dangerous, but it is also amazingly rewarding.

I think taking on what I call the tourist's perspective opens up the world and frees one's mind. In that way anywhere we are becomes Disneyland for us. Chicago, for example, is a staged adventure set up for us, provided we don't live in Chicago or have significant ties to there. What I am suggesting is that we take that ethos and apply it to our constant travels through all of life. Chicago should be stunning to everyone including the most serious Chicagoan.

A good tourist is an observer who assumes the world is working fine without him; perhaps he can contribute and improve, but he treads lightly. When he sees something he doesn't understand, he first assumes it is correct and he is confused. He is a enthusiastic student and a reluctant teacher. The model is more like Anthony Bourdain rather than Christopher Columbus. Read this and understand that it is not just advice for how to see Europe--it is advice on how to see life.

In the tourist's mindset we don't take anything too seriously, we're more willing to compromise and roll with the punches, and we aren't possessive; of course, this may mean we don't take full ownership of our actions. Like anything, it can be taken too far. We cannot live life constantly under the credo 'What Happens In Vegas Stays In Vegas . . . and everywhere is Vegas'. But you have to have a credo, and something closer to the tourist's mindset should guide us at home and abroad. I say, go for it!

Highly Linkable

Is that a Lite-Brite? No, it's NYC.

Have you heard the country song? It seems there is only one.

Five exam hacks to help you ace the final.

I tend to be an optimist about the future including and because of technology. I welcome the coming singularity. But I have to admit this concerned me and kinda shook me a little. More here.

How do you find something when a Google search isn't enough? Lifehacker suggests some options.

Looks like I need to change my views on flossing--and revise some other oral hygiene practices while I'm at it. (HT: Tyler Cowen)

The "coach who never punts", Kevin Kelley was interviewed recently on the AFA podcast. I predict in 10 years much of his heterodoxy will be orthodoxy.

Kevin Erdmann has a very good grip on housing policy. He Zoro's Shiller in a single paragraph and then proceeds to tear down all of the housing lobby's sand castles.

While we're calling out iconic economists, John Lee of Open Borders challenges Krugman greatly and Cowen to a lesser extent.

John Cochrane continues the craze taking on Keynesianism.

You might read this first before getting right to Pete Boettke answering Noah Smith's question on if economics swings left.

The zero-interest-rate environment succinctly explained with myths debunked by Scott Sumner.

Don Boudreaux offers some new year's advice on bad habits he wishes the government would break.

(UPDATE: housing policy link restored.)

Highly Linkable

A pre-New Year's Resolution I am setting is to blog A LOT more (and not just more links, but in all honesty how else would you know what to read).

I dubbed this "blog post of the year". Enjoy.

This TED talk was insightful. I really like the points she makes. And this TED talk is a great example of why we should be optimistic about the potential of medicine and technology . . . if we could only let the market do its thing . . . but I digress.

Watching this last night, I thought immediately what my heckle would be, "He's more King than you'll ever be, William!" I had read this by David Boaz the day before to give me strength.

I like Landsburg's three short essays on the Eric Garner tragedy. He brings up great points as well as giving a great economics lesson. I would like to know what happened in the missing 1:18 minutes of that video, but I doubt it would change my opinion that it was excessive, unreasonable force. Sadly, Eric Garner is but a statistic in a long line.

While I continue to be very critical of the Ferguson police and militarized police in general, this piece by Paul Cassell along with his other analysis convinced me that declining to bring charges was most likely judicially correct.

I've been waiting for this knowing it would be an epic takedown the likes of which we haven't seen since the Tri-Lams fought down the tyranny of Alpha Beta. Apparently, old grumpy was too.

I appreciate how Jerry Palm is thinking beyond the seen as he actually does some analysis regarding the Big 12's apparent "need" for a championship game in light of being passed over for a slot in the College Football Playoff. My own view is the 10-team Big 12 is much too unstable to look for quick fixes like adding a playoff game or two new (anyone will do) teams. I predict that more will change in college football than has changed already even though we have seen a lot of change. For universities strategic thinking is highly critical right now as is protecting what really matters--beware what loyalties you sacrifice for.

Lastly, glad to say I'm already doing quite a few of these backup strategies.

Highly Linkable

Andy Schwartz has penned the best analysis that I have ever read of the NCAA, its position as cartel, and the situation before it. Read it to understand the problem(s) and choose a side: Team Market (my group), Team Reform (the bootleggers and Baptists coalition of paternalist progressives and traditionalist conservatives), or Team Cartel (the NCAA today). I believe only Team Market is fully on the ethical and logical high ground. Team Reform's advocated position is not sustainable--the economic incentives will break it down as teams depart the model. Team Cartel might be sustainable in the medium term provided it can unconditionally win the multiple-front legal war it faces. I am being an optimist predicting that Team Market wins decisively and soon. I am simply being logical predicting that Team Market wins eventually.

Speaking of predictions, Randal O'Toole, the Antiplanner, discusses planning for the unpredictable as it relates to city planning and self-driving cars. And Mark Rogowsky makes some predictions about the business side of robo-cars, et al.

More predictions: Scott Sumner discusses some things that can't but will go on forever along with making some interesting predictions.

Here is a prediction that I will make in light of this excellent analysis (HT: Barry Ritholtz): Over the next 5 years hedge fund/alternative asset investment strategies will change A LOT while significantly falling out of favor among institutional money managers (anything outside of the retail brokerage level). I'll predict that in five year average fees are half what they are today and allocations are one-third lower. (UPDATE: To clarify, I am predicting that average fees collected are half as high in five years. If you think about how the average is affected, you'll realize this isn't as bold a prediction as it may seem.)

That's enough predicting for one post.

So Bryan Caplan has basically been following me around chronicling my strategy for success on my terms in life and in business.

Art Carden points out that while there are many negative aspects to poverty and most transcend time, fortunately a low income in absolute terms isn't one of them. Nothing gets you nothing . . .

I had the same reaction as David Henderson to this otherwise good personal finance article by Megan McArdle. People almost always misunderstand the tradeoff between 15 and 30-year mortgages as well as how to figure the cost-benefit of a refinancing decision. It's not about the time to payback on the closing costs and the likelihood of moving in the future. It is a comparison of two (or more) streams of cash flows discounted appropriately. Those other factors are just part of the input variables that must be included.

Like I said recently, the public doesn't understand inflation; Scott Sumner suggests the Fed may be coming around to understanding this and, hence, moving beyond inflation targeting.

Investing Is Not A Sport

Investing using the sports mindset will leave you saying, "I've made a huge mistake." And it doesn't just take something as colossal as buying real estate in Iraq circa 2002. It is little decisions made all along the way. Examples:

• Buying a stock and then watching its day-by-day or even minute-by-minute performance. This includes trying to explain every fluctuation in price. Most of what goes on over short periods is random noise. This is actually true of sports as well, but it is part of the allure of sports. However, following your investments' gyrations will lead to poor decision making and potentially heart failure.
• Falling in love with a stock. You aren't a fan, you're an investor. You're making an educated evaluation of the asset's value. She's a beauty, but don't fall in love. She's one in a million and there are bound to be plenty better. 
• Thinking that you "obviously" should have purchased some asset that recently had a great run. There is nothing obvious before the fact in investing. That "couldn't miss" real estate deal undoubtedly had tremendous downside risk that just didn't happen to play out. Remember, the reason you're even thinking about it is because it happened to be a winner. "If only I'd had money back circa 2002-03, I would have gobbled up Apple stock." Yeah, Apple's comeback was about as obvious back then as the 2004 Red Sox's comeback against the Yankees in the ALCS right before Big Papi stepped up to the plate in the bottom of the 12th. In hindsight the winning outcome seems logical and likely because it is the winner. We don't have to fully create the narrative as to how it could come to be. Reality has done that for us, but there were many, many other possible outcomes. Often some of these were individually more likely than the actual outcome. 
• Getting wrapped up in performance rather than process. We choose teams and individuals to root for based on a lot of reasons many of which are based on past performance. But successful past performance in investing means buying yesterday's winners--a strategy that doesn't correlate very well with future investing success. Good investing is about finding a good process. That process should generate future investing success.
• Talking yourself into taking a lot more risk than you should simply because the risk started small. Remember this amazing lucky break cum colossal mistake? You are never "playing with house money". 
• As a related point, if you find yourself playing in the equivalent of the championship game, realize that you are mistaken. Investing doesn't work that way. You don't accrue your way into a large reward/low risk situation. Investing is about choosing a risk/reward mix over the long term.
• Sitting a turbulent/uncertain/rough period out on the sidelines. There are no sidelines in investing. Cash is an asset. The mattress, safe deposit box, and interest-free checking account are all examples of investments--albeit, very poorly performing ones. The game is still going on whether you are playing a highly active role or trying to avoid all volatility. Inflation is constantly trying to eat away at the value of your net worth. And ALL periods are turbulent, uncertain, and rough. 

Perhaps golf offers the closest analogy to investing: your performance is largely independent of others' performances, your choices imply the risk/reward mixture (laying up versus going for the green), there is a cumulative effect between actions, the course you choose to play should be dictated by your abilities and your knowledge of the course will affect your performance, about the best you can hope for is a little better than "par", discipline is more rewarded than ability, etc. But even this analogy runs into strong limitations. Investing is always continuously cumulative. You never get to start a new round or new hole. Knowing how to successfully invest relies more heavily on learned skill than raw ability. 

How To Be Teflon

Everybody gets into difficult situations. EVERYBODY. Everyday. If you aren't getting in one today, good for you. Or maybe you're not trying hard enough. Or don't realize you're in one.

This is a guide to for difficult situations. Not a guide. A few ideas. They may be bad ideas. Apply at your own risk.

This isn't about being a Teflon Don. This isn't about committing crimes and getting away with it. It is about rising above a problem. Finding your way out of a difficult situation. Maybe that means a solution. Maybe that means a victory. Maybe that just means an escape hatch. They all look the same from the other side. I'm not saying this is what I'm always able to do. It is just what I try to do.

EVERYTHING IS A COMPLIMENT

Suppose someone just challenged your solution, put down your proposal, laughed at your ideas. It was supposed to be a professional setting. Just like that you are on the emotional defensive. Stop right there. They have just paid you a flattering compliment. They've just said, "As good as that was, you are better. Show me better." Now do just that.

Who cares that they were crass, inconsiderate? We'll get to the insignificant moments shortly. Or maybe they are just bad communicators. Don't hold that against them. Show them the better way. Ask them what they want, what they think. Get them to tell you the way to communicate with them.

Most people lash out when they don't understand. Confusion sparks primitive emotions bordering on physical reaction. Defuse it by giving them control. Figure out what they need to know by letting them do the talking. Always be thinking about solutions and expect that other people are too.

What if you can't? If you and the other person are at an impasse? Back away. Put time between the two of you and the problem. Notice they aren't the antagonist. You aren't the protagonist. It is the two of you against the problem even if it doesn't, and it usually won't, feel that way.

What if you still can't? Oh, well. Walk away. Some people can't communicate. Or won't. Doesn't matter because . . .

ONLY THE PEOPLE WHO MATTER, MATTER

Deep down the important people are always rooting for you. ALWAYS. And the people who aren't are insignificant. It is just like Thin Lizzy said, "If that chick don't want to know, forget her."

People we care about strive to 'get it'. That is how they show they care about us. And we reciprocate. Being a good friend, a good business partner, a good lover, a good person is about forgiveness, understanding, acceptance, and support. We're trying to make each other better while knowing we ourselves are highly imperfect. So imperfect that there isn't time to consider other's faults because . . .

THE LAST MOMENT IS INSIGNIFICANT

What has happened is literally in the past. What comes next is what matters. You will be judged by what happened and what will happen and you can only change one of those things. It is you're next decision that matters. Make it right, or make a mistake, that's okay because . . .

YOUR MISTAKES ARE TINY

Somewhere right now many people are making colossally bigger mistakes than you are right now. You've made bigger mistakes. You will make bigger mistakes. You learn, you adapt, you improve, you move on. Don't be stuck in the past with those who themselves can't escape it.

Don't focus on the mistakes; you're better than your last mistake. Much better. Now show it. Rise above it.

But how? What if it feels big? IT IS BIG. This mistake won't end well. Well, you're wrong. The Universe is big. You are small. Time is long. You are fleeting. And that moment, that mistake is but a flash that can be forgotten, undone, moved past, resolved because . . .

LIFE'S A LONG SONG

Most of life is in your own head. You sleep maybe one third of your life if you're lucky. And that time is just you and your dreams. You are alone with your thoughts perhaps another third of your time. The rest is also you thinking about what is happening around you while you intermittently interact with it.

This leaves very little time for you to actually act--be those actions successes or mistakes. And keep in mind you won't necessarily know the verdict right away if ever at all. Many actions we take are inconsequential. Many mistakes we make are as well. Some aren't, but you'll endure because . . .

YOU'RE TEFLON

You are the reason difficult situations were invented. Just so you'd have something to do.

Always be listening to your favorite music in your head. Give yourself a theme song. A whole playlist. As the situation dictates, switch to the perfect anthem.

Pretend the situation you're in is already scripted and you're just acting it out and you're the hero. Don't be cocky. Don't be arrogant. Just rise above. Let somebody else take the credit and the glory. The audience knows the truth. And they're rooting for you. Always.

Partial Compilation of the Wisdom of Max

As originally posted to Facebook (most recent first) over the past year and a half with slight edits for clarity, I give you

The Wisdom of Max

Me: "Max, put on your jammies."
Max: "I don't want to wear jammies."
Me: "Look, I'm wearing jammies."
Max: "No you're not! Jammies have airplanes and stuff on them. You're just wearing regular clothes!"

Max: "Do you know why they call them black widows [pronounced 'weiddos']? Because they are so weird looking."

Max: "It's really easy to kill zombies. You just get a sword and hit them a bunch. It's pretty fun." Who says Minecraft doesn't teach you anything.

Max: "Birthday parties are gooder than everyphrang because ... Getting older ... sigh..."

Max: "Old people are lucky. They can't go to jail. Guess why. Because they forget so much."

[from April] "It's chalk and water. When I asked him what he was doing he said, 'MOM, I'm sciencing.' Well, I guess I can't argue with science."

Max referring to a friend at preschool: "Heston's not really a bully. He's just kinda the boss."

I'll be vague to protect the innocent, but Max's quote was good: "Mom, tell your friend next time to NOT put nuts in the chocolate chip cookies."

In this photo we see Max explaining that "the inside of a bean has seeds that are like bullets. If you break it open and put them in a straw, you can fire them like bullets." Thank you, Papa, for that helpful bit of knowledge.

Max thinks this bird poop on the car window is cool because it looks like a rocket ship.

Max is at a friends birthday party. A few of his observations:
     "I can never trust a hot dog."
     "My real name is Max, but in your gang my name is Zane."

He's been working in this all morning running around fretting, "I don't know if this will work..."
It is an "Opathenator". He told me what it does, but it is too complex for me to summarize in a Facebook post. (notice the use of a laser)

(At Victoria's The Pasta Shop) Max said, "Bring me all the lemons."

Max wants everyone to know he had three dreams last night (2 bad and 1 good): 

1. We as a family were going on a train ride and he fell in the river. 
2. He was being chased by dragons and one ate him. 
3. A jet landed right by our garage (this was the good one. He said I would like it and maybe I'll have it sometime). 

     He then said, "Dreams are like listening to music with headphones only without headphones."

Max: "If you put honey all over [which he pronounces as 'O-er'] your yard, you'd have ants EVERYWHERE!"

Max: "I AM happy. I'm just not acting happy."

Max: "Guess what whiskers are for."
Me: "What?"
Max: "To shave."
Walked right into that one. But he continue, "They actually are just to give you something fun to shave."

Max: "If you tell somebody you went potty, but you didn't, and you don't tell them the truth, it's a lie. . . . 
I thought of that all by myself. That's what I do. I think of interesting things."

Laying down with Max while was going to sleep and me thinking from the long silence that he was, he raised up to say, "If I had some hot macaroni and there were ants nearby, I'd put it on the ants so they would die. Ice would work too."

Today Max and Elise went to the Myriad Botanical Gardens. Max said, "Mom, I have to ask you something. Can I pick these flowers? Can I take these flowers home?"
April replied, "No, you cannot."
Max said, "Okay, I just had to ask."

So Max was drawing with Eva today. He drew this guy in the middle and said, "that's a vampire." 
Eva asked, "How do you know what a vampire is?" He answered, "A vampire is just a naked zombie." And .... now I will have nightmares.

Max: "I wish I was three! Everything was easy when I was three. But in a while I'll be five, and that will be so cool!"

[from Nana]: While keeping Eva, Max and Elise this weekend, I gave Max and Elise both orange popsicles. Max quickly ate half of his then set it in his plate. Elise laid hers which was barely touched down immediately and grabbed his.
Max: "Hey! That's mine!"
Me: "That's okay just take hers she had barely touched it."
Max: "It might have germs, she licked it."
Me: "But Max she's your sister you don't care if you eat after your sister do you?"
Max: "No, not now that she is in our family."
Me: "Well she has always been in your family, she has the same Mommy and Daddy as you, remember when she was born?"
Max: "Yes, but when we first got her we didn't eat after her or anything for a while until we finally let her be in our family."
Guess it is one of those exclusive families that only accepts the best...

Max: "Papa, sometimes people think things that aren't true, but they don't know."

More from Max: "Some times things are funny, [shakes his head] but people don't laugh."
"You know bad words? You can learn good things from bad words."

Max: "Daddy, does it frustrate you that the house is taller than you."
Me: "no, not really."
Max: "But it's frustrating when things are taller than you."
Later . . .
Max: "My favorite thing to do today is to watch Eva while she plays. That bothers her. I like distracting her."

As I was grinding coffee this morning, Max said, "If you run out of concrete you can use coffee but it is really hard to do. REALLY HARD! You have to add boiling water and wait a long time."

Max: "David Graybill [his 6'4" cousin] couldn't take a bath. He is too tall. Do you know why David grew so tall? Let me tell you. Some people grow wide [he stands with his legs apart and arms lifted out to demonstrate]. But David grew long [he stands tightly together very straight like a pencil]. It happens at night. You don't notice because it is at night. But it happens."

Max: "If Superman was a real person, he'd be made of steel. But his cape wouldn't. His cape would be made of red cape stuff."

April: "I'm sending you kids to boarding school for the summer. I can't take the fighting."
Max: "I don't want to go to boring school. I don't want to ever go to boring school. I like my house."

[at Pi on the Plaza District] Max walked up to this sign and said, "What is my imagination saying?"

Elise is watching Sesame Street. Max can't figure out for the life of him what this is.

Max: "Dreams are important. They are good for you--even bad dreams."

Playing with Eva, Max said, "Remember what we did a long, long, long time ago, before today ..?" The rest isn't important. The specification that three long times ago is "before today" was the interesting part.

[from Nana]: Last night we gave our grandson Max (age 4 1/2 yrs.) a lava rock we found in the desert on our trip to Yuma. I said, "We picked up this lava rock for you in the desert. It is from a real volcano." His eyes got a look of excitement and alarm and he took it from me the way a person would take the surprise gift of a million dollars. "Wow" he said, "WHERE DID YOU GET THIS?" I told him we found it in the desert. He continued, "I mean, HOW DID YOU PICK IT UP? IT HAD TO BE BURNING HOT!"

Max today: "Robots were invented in the olden days to help people catch rabbits and chickens." I think he's watching too much Looney Tunes.

Max is focused in school work and focused in his Martial Arts.

Max from the shower: "Elise doesn't have boy parts! Where are her boy parts! She is like a cow. Milk comes out of there." How is he just noticing this?

Max explaining: "... And then a BIG giant ball of fire came down and there was fire everywhere and it killed all the dinosaurs. Then the scientists buried them, and then there were people who grew up, but first the scientists so they could bury the dinosaurs..." He drifted off as his non-sequitur became apparent.

Seems like he'd make a good pet owner.

So what do you do when you're playing hide-n-go seek, you are winning (not able to be found), and you have to go to the bathroom? Champions, like Max, apparently stay in place and pee their pants. ‪#‎commitment‬‪ #‎WhatChampionsDo‬

Eva has two friends over for a sleepover.
Me: "Max, let's get out of Eva's room and let the girls play."
Max: "No way! I wanna party with them!"

Max: "We talk about vinegar at school. You can drink it but it seems really bad but it is good for your bones."

Max relaxing in his new blanket-fort-house. There is a 20-foot "secret entrance" that runs behind the kitchen and around the side. It's really cool.

Max is showing Elise Minecraft. He is sad because in the zoo he built the piranha has jumped out of its pond and is going to die.

In another conversation, Me: "You need to get to sleep. It's a school night." Max's sharp reply: "I don't go to school at night!"

Max: "Your pants would be really stinky if you had cheese in them for a really long time." I am now checking all his clothing.

[from Nana]: Babysitting Max age 4 1/2 yesterday he told the dolls, "daddy has to go to work to buy food for your or else you will starve to death and Daddy will go to jail." then he looks up for a second and considers that thought, "well maybe I wont go to jail, then he continues, yes Daddy would go to jail."

April is taking Eva to the OKC Philharmonic tonight to see Sarah Chang play violin. I was telling her that a lot of people will be dressed very fancy tonight. Max said, "I don't like fancy." "What do you like?" I asked. "Cool," he replied.

At the end of her workout yesterday, April was out of breath and Max said, "Mom! When you are out of breath you have to go outside and eat some air or you might pass out!"

Max: "Flowers make nectar in their tummies like we make poop. And bees making honey. Lots of animals make things for us..." It went on from there for some time. Chickens are his favorite animal.

Max says: "You don't want the hedgehog to see his shadow - then there will be 1000 more days until fall comes."

So, Max pulled one of my books off the shelf and asked what it was about. It was Brian Greene's "The Elegant Universe", and it was opened to a diagram about relativity. He is now running through the house attempting to go fast enough to time travel. He didn't understand when I told him that if he does, I won't be able to tell.

Now this is a bubble bath.

Max: "Today at school I saw where you get Bible'd."
Me: "What?"
Max: "Bible'd!" [this actually went back and forth several times with him getting VERY insistent]
Me: "What do you mean?"
Max: "You know, with the big bathtub."
Me: "Oh, baptized."
Max: "Xactly! Daddy, have you ever been Bible'd?"
I didn't know how to answer.

Eva is at a birthday party next door that is "girls only". There is an age factor too, but that isn't something he could understand. Max: "Mom, for my birthday send a note to every girl in the whole wide world, 'No girls allowed!'"

Max: "Don't forget to set up the Montana Fire tonight in my room."
April: "What do you mean?"
Max: "You know, the thing that blows air in my face."
April: "Oh - the humidifier."

Max: "When we left on our trips, I worry about my toys and our house. What if somebody broke in and put a bomb in it. That would be crazy! I'd punch the bad guys in the tummy."

Max at Whole Foods whispering to April: "Mom, mom. I want to say that lady looks freaky, but that would hurt her feelings."

Max (in a Darth Vader voice): "Luke, I am your father . . . Son, and Holy Spirit." He might be confused.

Just after closing the door as the last of the cousins left from Christmas; Max: "Daddy, sometimes when I'm telling people goodbye, it makes me really sad."

Max: "Why did Nana make her Thanksgiving chicken on Christmas?"

He's loving his new swing set. Don't tell him it's too cold!

Max: "Did you know that you can see pictures of things in your brain? I'm looking at cool pictures right now. Can you see them?"

One of Max's rules seems to be to always stay in character.

One of his last thoughts before finally going to sleep brought Max rising straight up to ask, "What is faster a duck or a monster?" I knew immediately there is no correct answer I could give to this question as judged by him. Fortunately, he let me know, "I think a duck is faster running and flying."

Max is glad to be done practicing his Christmas program at preschool, "It was very disruptive to the day."

Max: "How did God create everything? Does he have a magic wand?"

"In Heaven can you fly? How? Do you say, 'I want to fly?' and you grow wings?" (With a concerned look.) "But I don't want to grow wings. I might just be saying, 'I want to fly'."

Max: "Elevators are pretty good places to pick your nose, but you shouldn't do it."

Upon learning what crab cakes really were Max said, "Crab cakes should be cupcakes shaped like little crabbies."

Max right now is jumping on the couch saying, "I love this night! It is like a birthday party!" Eva, watching MNF observed, "I just don't get some beer commercials. I like the one where he goes to the top of the mountain and pulls the beer out. I get that one."

Max: "Sometimes coaches look goofy."

Max: "Santa can't jump very high; he's a big dude."

Max is on a roll: "A giraffe could eat you." Me: "Well, no. Giraffes don't eat people." Max: "But if you had a leaf suit on they might."
Later: "Sometimes Santa comes into your house and looks around and if you have a bunch of toys he might only give you some and if you had a whole lot he'd leave you none."

Several from Max:
"Cows have to get the milk out of their skin or they will die."
"It is hard to pick your nose if it is sore but sometimes you have a big booger and if it is really big you need to wash your hands like ten times."
"If you didn't have a mouth you couldn't ask for candy if you were a little kid. That would be sad. "

Max: "Sometimes when you need to go pee-pee really bad someone talks to you and distracts you and you go pee-pee a little in your pants."

Max: "Papa, your neck looks like a turkey's."

Max: "It was easy for God to make aliens because they're so close to Heaven."

One of the byproducts of attending OU games is Max insisting we spend Sunday morning re-enacting the entire pregame in the backyard. I "get" to be the fans who have to stand up and clap and cheer at all the appropriate times. He is the players warming up, the announcer, the band, and the players running out of the locker room. The neighbors must love us.

[at the OU football game] Max: "What's a 'Hunnicutt'?" Me: "It means 'settling' and 'disappointment'."

At bath time.
Me: "I have to get your hair wet to wash your hair, Max."
Max: "NO! 'No' means no, daddy!"

Max: "Jesus has very good hearing."

Max's dream:
"A dinosaur was after me and 'Ah-Weece'. We hid under the table. He didn't kill us, but he zapped Mama."

Things I've learned this morning: Max, "In the world of donuts there are yeast donuts and cake donuts."

Max says, "Daddy doesn't wear a shirt when he mows - so neither am I"

Max gets Trick or Treat



Max was seriously concerned about his Sooners yesterday.

Wisdom from Max:
"A long time ago ghosts got into dinosaurs and thats why you don't see them any more."
"The beetles are the leaders of the bugs." Me: "Why?" Max: "Just because."

Max: "I'm a Wichita man. I'm from Wichita."
Homophone innocence.

"It's a glass of water." 100% his own idea and execution.

Max: "When you get old [elderly], you have to hear everything twice."

Max, "When I grow up, I want to be just like you, Daddy. Then I'll be able to go in the attic by myself." Apparently that is the measure of adulthood. He followed it with, "But I don't want to go into the attic." Quite the dilemma.

Max, "A magazine is a book you read when you go to the dentist."

[from Aunt Susie] A conversation between me and my 4yr old nephew:
Me: Max, I really like you
Max: I like me, too

Max reacts to eating a chocolate mouse


Max explained to me, "People call it a washcloth, but it's just a little towel."

April: "Max, please stop playing in the bathroom." Max, combing his hair: "I'm not playing, I'm being handsome."

April, "Max, is there anything you want from the store?"
Max, "Hmmm... Do they have gummies that look like bears?"
April, "When have you had Gummy Bears?"
With a confused look, Max, "Gummy Bears???"

Max just told me that Elmo was nice, but the dirty man was mean. I think he meant Oscar the Grouch.

Max's joke:
Max, "Mom, today at school I had a hand sandwich."
April, "No, you had a ham sandwich."
Max, "No, a hand sandwich. I ate it with my hand!"
"...I'm just kidding. It was peanut butter and jelly."

Max as the Flash (Flash wore an apron, right?)


Max was almost asleep when his eyes shot open with fear and regret as he worried, "I don't want Jesus to retire." Relax, he is not a prophet. Our priest, Father Boyer of St. Mark the Evangelist, is retiring tomorrow. Max is vague on what a priest is and completely unfamiliar with the concept of retirement.

Max plays Air Hockey


Mothers get accused of many things being their fault. This was a new one on April. Max: "Mommy! You broke my ideas."

Max says: "If God were not in the sky but was on the floor that would be cute because God is cool."

Not sure what this means. Max, "Let's pretend we don't have super powers."

Max to Elise: "I'm gonna squeeze the cutsy out of you." He said it in a sweet way, but it was still a little concerning.

Max's word of the day is 'sanitize': "Carrots are dirty. They have to be washed and sanitized."

Remember when finding a stick could make you happy?

Max sings Taylor Swift


Advice from Max: "It would be really hard to put lava in a water balloon, so don't even try it."

[at Easter] Max found an egg with money in it and said, "I'm gonna get all this money, then I can go to college, then I'll be rich forever!"

From the Wisdom of Max: Did you know that cheese makes you stop dying? Farmers put medicine in cheese.

Me from behind a closed door: "It's me, Baby Elise."
Max: "No it's not."
Me: "Oh yeah, it is."
Max: "You don't sound like Elise."
Me: "I changed my voice, I'm Elise."
Max: "If you Elise, pee your pants."
Checkmate Max.

April to me: "We need to start watching on Netflix 'Breaking Bad'."
Max with a distraught look on his face: "Oh no, can we fix it!?"

What I heard from the other room:
Max: "Eat this."
Eva: "EEEWWWW!"
Max: "It's yucky.... Don't eat it."
I did not investigate. Some things are better left unknown.
From April: The first thing that Max said to me this morning was "I went to the grocery store by myself and I had cheese". I asked him if it was a dream. He said "yes and papa was there and there was a shark".

April: "This is the coolest morning ever - we saw a fire truck testing its ladder and we saw a hot air balloon."
Max: "And we saw beautiful trees and a beautiful baby and a beautiful you."

Some of Max's more interesting questions of the day (he has many everyday):
"How do things not break?"
"How is your head attached to your shoulders?"
"How long cents does a kite cost?" (Pretty sure he meant how 'many' cents).

Three Points On Knowledge

1. Over Representation:

Think about when we offer our knowledge and opinions (and conjectures) on a particular topic for which we are not an expert--in other words, 99% of our daily dialogue. It would be interesting if the social norm would be to conclude by saying, "And that is the extent of my knowledge on this subject." Some people, of which I am one, are of the personality type that they feel compelled to share everything they know about a subject when discussing it. There is nothing wrong with this per se, but it can create the false illusion that we know more than we actually do--that there are even more gems left in the bag rather than that's all, folks!

I've been trying to make an effort to be more explicit about the limits of what I know, and I plan to work harder to that end.

2. "I Don't Know"

"I don't know"* is the almost always unacceptable response that is almost always the most correct answer. What happens after we die? There is but one correct answer scientifically speaking. You can believe one thing or another, but you do not know. 

IDK is nearly as applicable to all questions pre death. The complexity of our Universe, our economy, our own preferences leaves us generally in a state of darkness with just flickers of sporadic light. We should be more appreciative of this truth.

Yet humans have a universal thirst for certainty. Inquiring minds want to know. That is a good thing--it leads us to question and find answers and then question those answers to reveal deeper truths. I just wish we could be more honest about how true and virtuous the answer IDK is. If we were, it might minimize how thirst for certainty is also a bad thing. It is a big part of why we crave and succumb to authority. It is how con men can win over intelligent people. The investment community if full of people who refuse to say IDK. Politicians get roundly "defeated" in debates by even hinting at IDK. In business you might as well say "Fire me now".

Saying "I don't know" takes courage and wisdom, and so does acceptance of it as an answer.

3. Trust of Knowledge.

There are two extremes along the dimension of trust I am considering here. Those extremes are only trusting locals vs. locals are morons. I think people tend to fall toward one extreme or another, but they are not consistently at either end. Rather it varies topic to topic. The former extreme is driven by belief that only locals understand the circumstances whereas the latter is driven by knowing locals too well to know their flaws. Both reasoning are obviously faulty when at the extreme.

I see this thinking often in my profession, investment management. Some people are biased against a local firm managing their money preferring at least someone "smart" enough to be in Dallas or Chicago if not New York. Other people take the opposite approach and are very fearful of anyone from New York City! because "they will", of course, rob you blind.

Related (perhaps a bonus knowledge point): Margins of accepted error--how one's biases influence the margin of error one allows for cohorts who match versus cohorts who oppose one's views. Most ideas are bad ideas--impractical, plagued by substantially bad facts, and suffering from poor reasoning. Yet I think we cut our ideological brethren a lot of slack while being harshly critical of our opponents. We do something similar in business. If I trust locals, I give them a wider berth (and perhaps more financial leniency) than I do outsiders. If I think locals are fools, the hurdles I make them clear leave both of us poorer.

There are many ways we inconsistently apply margins of accepted error. Recognition and mitigation of these requires constant vigilance.

Keep thinking . . .

*There was a recent Freakonomics podcast on IDK. I thought it was good, not great. I hope the space they devote in their new book is a little more fulfilling.

Highly linkable

As we of historically unimaginable wealth prepare for a wonderful holiday season, it is important to remember that Americans (among too few others) enjoy a life better than any before.

Looking for a New Year's Resolution? How about becoming a Jedi Knight?

More help for the Pope.

Whether you are a libertarian or are critical of the libertarian ideal, you should read this to better understand what libertarianism, the ideology of against, is actually for.

Three more strong challenges for the minimum wage policy of pricing low-skilled workers out of jobs: here, here, and here.

What you think you know about the Great Depression that just ain't so.

With bureaucracy we get one small step forward for many hundreds back.

Playing the lottery may be hazardous to your health.

Remember my post on common things today that will horrify or simply humor future generations? Bryan Caplan has a similar post that does a great job identifying an example for each of the three major ideologies: conservatives, progressives, and libertarians.

And how about these guys with the deal of the century? (HT: Mungowitz)

Highly linkable

We start with a cool invention: the invisible bicycle helmet.

James Altucher bundles some great life advice in this collection of lessons learned while day trading.

Grantland has two right down the middle: one on maximum overdrive coming to baseball and another on the coach who never punts (a theory after my own heart). While never is probably not the optimal strategy, as the authors mention, the current state is sub optimal from a winning perspective.

As long as we're bucking conventional wisdom, here is something to put in your pipe: popular hysteria about crack and meth is just that--hysteria. Mark Perry shows the way pointing towards an article in the NYT by friend of free thinking John Tierney.

But I thought we should just say no; that drugs = total life destruction was a fact. Well, facts aren't always so factual. Here is a completely different example from Russ Roberts where he shows Simpson's Paradox. One would think that if every sub group of a larger group saw a decline in a measured factor that the larger group itself must exhibit a decline as well. Doh! Not necessarily and importantly not in this case of supposed income inequality.

They're about to start paying you to live in Switzerland--and paying well: ~$2,000 per month just for calling the land of cheese and chocolate home. I like the idea of a negative income tax. I like the idea of largely replacing the social safety net with fixed cash transfers. I think it is a third or perhaps even second-best solution. But $2,000 per month? We've gone from supplement to substitution really fast. Sure it might spur entrepreneurship, but do we really want someone leading the life of Riley starting a business, using capital? Oh, we don't.

One thing all those Swiss might start doing is going to college. But what is the value of that anyway? Here is one version of the debate from the Bleeding Heart Libertarians. Here is the same but Muppetized.

Finally, in most situations where a dispute from within a fraternal order (and one that is not like the typical world) is made public, there is more there than what at first meets the eye. Such is the case with the Miami Dolphin's locker room hubbub suggests Russ Roberts.

I've made a huge mistake

Here is another idea on a New Year's Resolution: Find a better balance between the "I should haves" and the "I should not haves". They are generally tradeoffs against each other where any minimization of one implies an increase in the other, but innovations can allow for new possibility sets where the minimums of both are lower. Think of this as greater efficiency. An example would be finding a new destination for a vacation to replace an old standard.

Think of it in terms of cruise ships. If you find a better cruise ship line, you might find that all choices aboard have better outcomes. For example, staying in your cabin for the day is more pleasant because the room is nicer than on the previous ship, but venturing out to take in activities is also an improvement over the previous ship's alternatives. Even if your relative costs are higher because everything aboard is so fabulous that the alternatives on the ship have high absolute differences (restaurant A might be a big let down compared to restaurant B), the effect still holds because the overall possibilities are better than what they were before (restaurant A is better, the same, or just slightly worse than the best restaurant on the prior ship while nearly everything else on the new ship is much better). Of course, it might take an initial risk of an "I should not have" to deviate from the original, known cruise ship, but that is the point of the resolution--taking desirable chances.

So my recommendation is two-fold:

• Evaluate your life to see if you need less "I should haves" or less "I should not haves";
• Appreciate and expose yourself to the opportunity to reduce both.

This is what Tim Harford is getting at in his resolution.

PS. Some of you probably recognize the more scientific form of what I describe above. Namely, the tradeoff between Type I and Type II errors and how a technological change can allow both to decline simultaneously.  Good for you, you get extra credit to apply toward the final exam.

Resolve to be happier

What should your New Year's Resolution be? I'm glad you asked. I think a good go to resolution is to simply resolve to be happier. Simply looking to have a better outlook on life and especially if followed up with happiness-increasing actions, can improve your life significantly.

The Happiness Project might offer some clues that would help including these tips on how NOT to be happy.

Here is my contribution. It is a bit of a happiness hack. I think one should view developments not fully within one's control but definitely affecting one's life as first offers where one has a right of negotiation. Rather than seeing these developments as ultimatums or demands or requirements that are "happening to me", I like to think of them as changes in my opportunity set. Some examples:

1. My child's soccer team's new practice schedule conflicts with other activities, or my child's soccer  team is moving up into a more competitive league that I am not necessarily comfortable with. 
2. At work my department is moving floors where I am probably getting a downgrade if offices, or my employer is changing the schedule of benefits reducing those most advantageous to me, or my employer is asking me to go into a conference room to discuss how I spend my day with a consultant.
3. Near my quiet home a new commercial development is announced with the possibility of more traffic, more noise, and perhaps more crime.

Aside from the nearly always applicable assuaging line that it is probably just not that bad, I look at these types of developments as challenges where I have options. Assuming even that I cannot fight directly to reverse or direct the changes, I consider my options: 

1. This may be the end of soccer for my child (perhaps she wasn't destined for World Cup) and perhaps another sport or other activity would be a close substitute (it may even be an improvement), or perhaps there is another soccer league.
2. Is this the impetus I need to consider a change in jobs, or perhaps this offers the incentive I need to work harder for a promotion or other recognition.
3. What do I truly value in a home and can I find a better match to my desires? How might the new commercial property actually benefit me?

This is not about "bright-siding" every situation. It is about being realistic and open minded. Life is about constant change of varying degrees and at sudden impacts. Those who adapt to that immutable quality of the universe are better equipped for success and happiness.

Update: new research indicates that being happy correlates and perhaps contributes to success. http://www.aeaweb.org/aea/2013conference/program/retrieve.php?pdfid=29