1/ So I’ve been thinking a lot recently about arguments we see on the Twitter.
One case in point is the “crypto is the future” people vs the “crypto is a scam” people.
But what follows applies broadly. 👉👉👉
2/ Yes, there are people out there who just want to argue.
But I assume we all block them already.
I want to talk about (and to) those of us who want honest truth-seeking conversations, but sometimes get bogged down in pointless debates.
3/ I offer a mental model to help frame both our own thoughts and those of others.
This model is mine, but it’s also not mine in the sense that it’s an amalgamation of all the things I’ve learned and read and half-forgotten over the years. Here goes…
4/ When we make and listen to statements, let's bucket them in 3 broad categories:
1⃣ Factual: Claims about facts. I.e. a thing most people agree is true/false
2⃣ Predictive: Claims about future states of the world.
3⃣ Normative: Claims about what *should* be true. Or a goal.
5/ So whenever we say things, let’s ask ourselves:
“Am I making a factual, predictive or normative statement?”
And in particular, let’s communicate clearly which one it is! Even just asking myself this question helps unmuddle my thinking a lot of the time.
6/ And when you read someone else’s claim, it’s worth asking this very question if you’re unsure about the bucket.
A lot of the time, pointless disagreements emerge when one person thinks they’re reading a factual claim when in fact the person made a normative claim.
7/ Often those pointless disagreements evaporate once we understand the relevant bucket being used. Let’s try it out:
“OlympusDAO is a Ponzi.”
Factual, predictive, or normative?
8/ On its face it seems like a factual statement. Especially if you’re a big OHM holder and sooo excited about all the APY you’re getting.
But probably it’s actually a predictive statement. One that’s better expressed as:
“I believe OHM will go to zero someday.”
9/ Or maybe it’s actually a normative statement.
“OHM may or may not go to zero, but this is a crappy way to build a business/ecosystem/whatever. It *shouldn’t* work.”
10/ If you really want to engage with someone, it’s probably worth figuring this out before getting into the back-and-forth.
And if that someone is yourself, all the better! As I said, getting clear on what *you* think comes way before getting clear on what everyone else thinks.
11/ Obviously this isn't just about crypto! Probably every argument/debate becomes more productive when people agree on *what* they're debating.
Facts? Predictions? Or norms?
12/ Anyway, hope this helps.
Comments welcome, as always!
/END
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1/ A Sunday question thread: why do American parents care so much about their kids' sports?
👉👉👉
2/ Numbers vary but from a cursory look, somewhere between 55% and 65% of American children between 6-17 play some form of organized team sports (i.e. with instructors and coaches).
Add in the tennis, golf, running, and other individual sports and you're surely around 70%.
3/ The time investment is big, and the financial investment too. A lot of high schools are oriented around their sports teams (Friday Night Lights, etc). But why!?!?
I think I've discovered a common cognitive error which I'm going to label the Physical Embodiment Fallacy.
In this and many other superhero movies, the bad guy creates/steals some horrifying new piece of technology which is going to kill millions, enslave the world, etc.
The solution in every movie is simple: kill the bad guy and destroy his evil lair.
I.e. eliminate the physical embodiment of the problem, and the problem is solved.
1/ The key to understanding "news" is to think about probabilities and incentives. A thread... 👉👉👉
2/ Let's say you're trying to estimate the chances of some future event happening.
As an example, let's take P(Trump runs for President in 2024).
3/ So you read the news about such an event. CNN, FoxNews, Politico, whatever. And it feels like a steady drip of "news" about tiny events which could affect that probability.
So how do we integrate all these pieces of information into a prediction?
1/ A short thread about the relationship between academic finance and real $ trading. 👉👉👉
2/ First of all, I need to get something off my chest. I loved the Asimov Foundation books as a kid.
Much like Paul Krugman, the idea of doing math to understand complex societies, and to predict their evolution, was transfixing. And still is.
3/ I used to do mathematical modeling of complex systems before I even knew it was a thing.
When I was working as an engineer (and running a lot), I spent more time that I'll admit trying to build a model of the human lactate response to exercise. For fun.
The better the trader, the less they care about which specific product/market they're trading.
That doesn't mean they don't have deep knowledge of the market or product. Far from it.
It means they don't *care*.
2/ Conversely, I see a lot of aspiring, new, and frankly bad traders who care a *lot* about the product.
"I trade options," "I trade futures" like it's a religious commitment. It's not. The product you're trading is a means to an end, at least if you care about money.
3/ One of the founders of my former company loved saying something like:
"If they made financial markets illegal tomorrow, we'd probably suffer for a while but we'd eventually be fine. We'll just go find something else to trade."