Please comment

Perhaps it is the responsible thing to do, or perhaps in my case it is a bit presumptuous given I average just a little over two comments per post, but I’ve written up a comment policy for my blog.

As I’ve mentioned before, one of the reasons I blog is to chat to distant friends and family about topics that currently interest me. So, I really do want people to write comments.

However, since I embraced Facebook, I now tend to have those sorts of chats there, and automatically copy my blog posts into my Facebook notes in order to let people chat, debate, disagree or laugh at me in that space. It’s more private, provides a simple notification of new posts / comments, and is a neutral space.

However, Facebook comment streams are a pretty awful way of conducting a conversation. The lack of a decent text editor, the difficulty in pulling more people into the discussion, and the inability to reply to a specific comment (only the the entire stream) make it less than ideal. And the whole thing is then “owned” by Facebook, which I don’t necessarily have a high degree of trust in. So, despite it being where most of my online conversations occur these days, I still resist making it the primarily place where I put my posts.

Which means that many people I know have a choice of two places where they might respond to one of my posts: the blog or Facebook. A choice, importantly, that doesn’t extend to places where they might respond to others’ responses. If someone has commented in Facebook, the response can be lodged on my blog. This isn’t neat, but I can’t see a good solution that doesn’t also give up some of the benefits of Facebook.

That doesn’t mean one doesn’t exist! I think I need to look deeper into using something like Disqus or IntenseDebate for my blog comments.

But for those that do wish to comment on the blog, please do. I aim to exercise only light-touch moderation, and ask only that you respect other writers and the topic at hand.

Puzzles and Mysteries

I make no secret of the fact that I like reading (what you might call) “ideas books”. Currently, I’m reading the latest Malcolm Gladwell book, What The Dog Saw, which is chock-full of ideas. Every chapter is an essay he’d previously written for the New Yorker magazine.

A particularly interesting chapter (you can also read it in full here) introduces the concept of puzzles and mysteries. For this framework, Gladwell credits Gregory Treverton (who you can read in Smithsonian Magazine discussing it here). While neither Gladwell nor Treverton go so far as precisely defining puzzles or mysteries, let me summarise the examples they give and how they characterise some of the differences between them.



  • How many missiles did the Soviet Union have?
  • Where were they located?
  • How accurate were they?
  • Where is Osama bin Laden?
  • What are the proven oil reserves in country X?

Characterised by:

  • New information makes it easier to solve
  • Relatively stable answer over time
  • Clear measures of effectiveness of problem-solving



  • What is the next Al Qaeda plan?
  • What would happen in Iraq after removing Saddam?
  • What is causing a sick person’s symptoms?
  • How much oil will be produced by a given well in its lifetime?

Characterised by:

  • Too much information, some (much?) of which is conflicting
  • Depends on future interactions of many factors

Gladwell argues that the circumstances leading to the collapse of Enron were a mystery, despite many people (especially those involved in the related court cases) considering it to be a puzzle. While, Treverton argues that the world of intel has in the past being structured to solve puzzles but from now on will need to handle mysteries if it is to successfully deal with terrorism.

This is an interesting concept and these are interesting arguments. I found myself wondering how this applied to knowledge workers in general. One of the points made by those authors is that special skill sets and organisations are required to tackle the different kinds of problems. I found this appealing, as many of the problems that I tackle in technology strategy might be considered mysteries of this sort, and I naturally like the idea of being special.

However, upon reflection, there may be a trap here. Dividing knowledge workers into two groups has a sense of introducing a class system – an upstairs-downstairs split – that serves to build barriers between groups that ought to work together.

Also, it isn’t at all clear that all problems can be classified as either a puzzle or a mystery, or even that any particular problem can’t be both. In fact, Gladwell gives an example of a WWII problem concerning a German secret super-weapon that was treated (by different groups) as a puzzle and a mystery.

But despite these concerns, the framework of puzzles and mysteries seems valuable. I currently ask a problem-solving question as part of job interviews, and perhaps I ought to tweak it to be more like a mystery in order to better test if people will fit into the work environment.

In any case, it is apt to quote a fabulous line from Winston Churchill that he spoke in 1939 suggesting people have been considering mysteries further back than our recent “age of terror”, although perhaps we need a couple more terms:

I cannot forecast to you the action of Russia. It is a riddle, wrapped in a mystery, inside an enigma; but perhaps there is a key. That key is Russian national interest.

Perhaps there was no Tulip bubble

I’ve been trying to understand what a financial bubble really means, and in the course of this, came across some interesting information: apparently the great Dutch Tulip bubble of the 1630s wasn’t a bubble after all. Although I am wary to merely summarise stuff that is written better elsewhere, I thought this was a good one to share.


Tulips came to the Netherlands from Turkey in the 1500s, and became a popular status symbol. Multicoloured varieties were produced due to the effects of a plant-specific virus, and as a result (skipping the details), it would take at least seven years after planting the bulb of a spectacular tulip to produce new tulips from it. Understandably, possessing a spectacular tulip bulb gave you an advantage for quite a period of time before others could gain a similar bulb.

Due to rising prices, speculators entered the tulip market in 1634, and a more formal futures market in bulbs arose in 1636. By some accounts, offers for single bulbs reached insane levels, e.g. 49,000 m^2 of land for a bulb. In February 1637, the price of tulips crashed. For the next few centuries, “tulip mania” is used as a textbook example of crazy market behaviour with a boom and bust.

Why not a bubble?

If a bubble is where markets are caught up in “irrational exuberance”, then it appears that this market continued to be rational. And if a bubble is where a market eventually “pops” and the resulting crash causes widespread losses, then it appears that losses were not significant. Of course, it is hard to know for sure, since all of this happened almost four centuries ago, but there is apparently some evidence that:

  • In February 1637, the futures contracts all became options contracts, i.e. the purchaser of a contract to buy bulbs no longer had the obligation to purchase or take delivery of the bulbs if it looked like they would make a loss.
  • This change was known to be coming from several months beforehand, encouraging purchasers of contracts to agree to high bulb prices with minimal risk. Taking this perspective, the contracts were rationally priced.
  • Actual tulip prices (as opposed to the price of these futures contracts) remained at ordinary levels.
  • The Dutch authorities halted the trade in the contracts, and later decreed them unenforceable gambling debts. So, given that no tulips changed hands that winter (as the tulips would’ve all been in the ground) and the contracts were unenforceable, it’s not clear that there were any significant losses made.
  • Most of the support for claims of a tulip bubble come from some anti-speculation propaganda published soon afterwards.

Perhaps, then, there was no Tulip bubble. I guess all those textbooks need updating.

How the 80s became the naughties

One of the defining events of the naughties – the first decade of this millennium – was the global financial crisis. How mortgage defaults in a few US states, leveraged many times over through the global financial system, brought about a crash in the world’s stock markets and a world-wide recession. But its genesis was in 1980s Wall Street as chronicled by ex-Salomon Brothers employee Michael Lewis.

Liar’s Poker

Vulgar, incredible and fascinating take on 1980s finance

I listened to the audio book earlier this year, and Lewis’ tale blew my mind. Here was a person who, by rights, should not have been in that place at that time, as he didn’t have the traditional qualifications to get a job trading at Salomon Brothers, nor did he even interview for the job. Furthermore, instead of continuing to make wads of money, he chose to quit and write an account of it. Lastly, it was written well in a very accessible style. The chance of all these things happening must have been minuscule – and yet they did.

If Lewis is to be believed, and he presents himself credibly, Wall Street in the 80s was inhabited by a bunch of racist, chauvinist cowboys who through luck more than wisdom and possessing a complete disregard for their customers managed to make out like bandits. This is, of course, completely counter to the image that Wall Street projects of itself to its customers.

The story is part-memoir, part-history and part-ethnography. The author’s prior education was in art history, and second career was in journalism, and he picks out the threads that led to the particular situation that he was dropped into, as well as charting his progress through the firm and documenting its culture. It is a unique book, and truly fascinating, even if you don’t have a background in finance let alone the bond market.

My rating: 4.5 stars

Liar’s Poker

First-hand account of Wall Street’s cowboy culture and the rise of mortgage bonds

Most recently, Kate gave me a paper copy of Liar’s Poker, given how much I enjoyed the audio book. I quickly discovered that it was a rather different book.

Liar’s Poker was Lewis’ first book, and the text really does feel like it. For example, paragraphs feel like they are crammed full of information. In the audio version this wasn’t so obvious. Also, there is a great deal of background, historical information in the middle of the book, which I found bogging down the interesting personal tale, and much of which was excised from the audio book version. The book would’ve benefited from more aggressive editing, and the audio book, being an abridged version, had effectively received this.

That said, it remains a compelling tale. All of the aspects that I liked in the audio book version, I still found in the paper version, although it was less focussed. Perhaps if another reader hadn’t experienced the audio book first, there wouldn’t have been an expectation of a fast pace already set.

My rating: 3.5 stars