Below is a short explanation why software and financial service firms seem to have outperformed the other industrial sectors over time and might be, on average, better investments than some other sectors.
It is based on the observation that both sectors produce invisible products in the sense that they only produce, store and move information which has no physical shape in itself. With some reflection on the matter, one can convince oneself that the costs associated with storing and moving information are much lower than those associated with storing and moving "real world" objects. For instance, sending an email seems to be much cheaper than sending anything - be it a letter or candies - by mail.
Now, the common sense will also tell us that if a sector has much lower costs compared to others, its profits are bound to be higher in the long run since profits are revenues minus costs.
This is exactly the story that the numbers tell us. To quantify this effect, look at the Price-to-Book (P/B), Price-to-Earnings (P/E), and Net Profit Margins of the financial services companies vis-a-vis to other industries (see References below). Interestingly, Financial Services seem to have the lowest P/B and P/E ratios (indicating that they are relatively undervalued) while also having the highest net profit margins compared to other sectors.
Also, notice that the financial services industry has the highest combined market cap of all sectors (see References below), indicating they have exhibited the highest growth rates over history, for to grow to be the largest, they must have. Mind you that, money and banks as such were relatively late invention in human history compared to some other activities such as agriculture. And if you think banking - the business of trading trust in a standardised manner - is not novel, you must agree that innovations such as financial securities and derivative instruments are little newer than many of the other everyday activities we perform.
The story with software companies is not as clear since they have a higher failure rate and higher sales costs, espcially in the enterprise software market, but they do share one thing in common with financial services firms - they only produce, move and store information, and no physical objects.
What is the significance of this finding? In short, it is that if you invest in the stock market, you are better off holding more rather than less stock in the financial services companies.
But why would people, on average, still prefer to invest more in non-financial - or what can be "brick-and-mortar" - companies despite the relatively low earnings compared to the stock prices of these companies, as indicated by high P/E and P/B ratios? Because such companies produce "visible" products, or "household-name brands", and we are psychologically more inclined to invest in companies that produce things that we see, understand and can easily identify with. Such things include cars, energy, and retail goods that are constantly visible in our everyday experience. In contrast, fewer people understand what, say, investment banks do, nor can a retail investor from the street easily identify with what they "produce". As a result, one could argue the stock price performance of such companies tends to have an "invisibility premium" over time.
References
Yahoo Sector Browser
Monday, 12 June 2006
Pronouncability Arbitrage
Three studies investigated the impact of the psychological principle of fluency -- that people tend to prefer easily processed information -- on short term share price movements. In both a laboratory study and an analysis of naturalistic real world stock market data, fluently named stocks robustly outperformed stocks with disfluent names in the short term. For example, in one study, an initial investment of $1000 yielded a profit of $112 more after one day of trading for a basket of fluently named shares than for a basket of disfluently named shares. These results imply that simple, cognitive approaches to modeling human behavior sometimes outperform more typical, complex alternatives.
The ease of pronouncing the name of a company and its stock ticker symbol influences how well that stock performs in the days immediately after its initial public offering, two Princeton University psychologists have found.
A new study of initial public offerings (IPOs) on two major American stock exchanges shows that people are more likely to purchase newly offered stocks that have easily pronounced names than those that do not, according to Princeton's Adam Alter and Danny Oppenheimer. The effect extends to the ease with which the stock's ticker code, generally a few letters long, can be pronounced -- indicating that, all else being equal, a stock with the symbol BAL should outperform one with the symbol BDL in the first few days of trading.
"This research shows that people take mental shortcuts, even when it comes to their investments, when it would seem that they would want to be most rational," said Oppenheimer, an assistant professor of psychology. "These findings contribute to the notion that psychology has a great deal to contribute to economic theory"
Oppenheimer and Alter, a graduate student in Oppenheimer's lab and the study's lead author, will publish their work in the May 30 issue of the journal, Proceedings of the National Academy of Sciences.
The two researchers were initially looking for a different effect when they stumbled upon the relationship between ease of pronounceability and performance. They asked a group of students to estimate how well a series of fabricated stocks would perform based only on the stocks' names.
"We gave them the list of company names and essentially asked, 'How well do you think the stock would perform?'" Oppenheimer said. "At the time, we were primarily interested in studying whether we could manipulate how people interpret the feeling that information is easy to process. We weren't trying to study markets or companies initially; stocks were just an interesting domain of inquiry."
However, the relationship was very strong -- regardless of Alter and Oppenheimer's attempts to manipulate students' interpretations, the students still believed that the easily pronounceable stocks would perform best.
When they noticed how strongly name pronounceability influenced predictions of performance, the researchers moved beyond the lab and investigated the relationship between the variables in two large US stock markets--the New York Stock Exchange and the American Exchange. The effect held in the real world: the more "fluent" a stock's name or symbol, the more likely the stock was to perform well initially.
"We looked at intervals of a day, a week, six months and a year after IPO," Alter said. "The effect was strongest shortly after IPO. For example, if you started with $1,000 and invested it in companies with the 10 most fluent names, you would earn $333 more than you would have had you invested in the 10 with the least fluent."
Alter said the pair of scientists had been careful to address the possibility that other factors were at play in the study.
"We thought it was possible that larger companies might both adopt more fluent names and attract greater investment than smaller companies," he said. "But the effect held regardless of company size. We also showed that the effect held when we controlled for the influence of industry, country of origin, and other factors."
Oppenheimer cautioned that while the findings might seem highly significant to the investing public, they do not tell the whole story about how a stock might perform after its IPO, nor are they reliable indicators of its performance in the long run.
"Despite the implications of these findings, investors as a group tend to correct themselves in the presence of new information about how the markets operate," he said. "You shouldn't make changes to your stock portfolio based on our findings. The primary contribution of this paper is to add a piece to the jigsaw of understanding how markets operate."
What the findings did offer, Oppenheimer said, was another piece of evidence that markets -- and therefore the large groups of people who invest in them -- are not the rationally-functioning entities that some experts believe them to be.
"This is not the only factor that plays a role in stock performance," he said. "A number of other economic and psychological factors undoubtedly play a role as well. This study does not argue that psychology is more important than economics, but rather that one cannot ignore psychological variables when constructing models of stock performance."
References
Predicting Short-Term Stock Fluctuations by Using Processing Fluency
The ease of pronouncing the name of a company and its stock ticker symbol influences how well that stock performs in the days immediately after its initial public offering, two Princeton University psychologists have found.
A new study of initial public offerings (IPOs) on two major American stock exchanges shows that people are more likely to purchase newly offered stocks that have easily pronounced names than those that do not, according to Princeton's Adam Alter and Danny Oppenheimer. The effect extends to the ease with which the stock's ticker code, generally a few letters long, can be pronounced -- indicating that, all else being equal, a stock with the symbol BAL should outperform one with the symbol BDL in the first few days of trading.
"This research shows that people take mental shortcuts, even when it comes to their investments, when it would seem that they would want to be most rational," said Oppenheimer, an assistant professor of psychology. "These findings contribute to the notion that psychology has a great deal to contribute to economic theory"
Oppenheimer and Alter, a graduate student in Oppenheimer's lab and the study's lead author, will publish their work in the May 30 issue of the journal, Proceedings of the National Academy of Sciences.
The two researchers were initially looking for a different effect when they stumbled upon the relationship between ease of pronounceability and performance. They asked a group of students to estimate how well a series of fabricated stocks would perform based only on the stocks' names.
"We gave them the list of company names and essentially asked, 'How well do you think the stock would perform?'" Oppenheimer said. "At the time, we were primarily interested in studying whether we could manipulate how people interpret the feeling that information is easy to process. We weren't trying to study markets or companies initially; stocks were just an interesting domain of inquiry."
However, the relationship was very strong -- regardless of Alter and Oppenheimer's attempts to manipulate students' interpretations, the students still believed that the easily pronounceable stocks would perform best.
When they noticed how strongly name pronounceability influenced predictions of performance, the researchers moved beyond the lab and investigated the relationship between the variables in two large US stock markets--the New York Stock Exchange and the American Exchange. The effect held in the real world: the more "fluent" a stock's name or symbol, the more likely the stock was to perform well initially.
"We looked at intervals of a day, a week, six months and a year after IPO," Alter said. "The effect was strongest shortly after IPO. For example, if you started with $1,000 and invested it in companies with the 10 most fluent names, you would earn $333 more than you would have had you invested in the 10 with the least fluent."
Alter said the pair of scientists had been careful to address the possibility that other factors were at play in the study.
"We thought it was possible that larger companies might both adopt more fluent names and attract greater investment than smaller companies," he said. "But the effect held regardless of company size. We also showed that the effect held when we controlled for the influence of industry, country of origin, and other factors."
Oppenheimer cautioned that while the findings might seem highly significant to the investing public, they do not tell the whole story about how a stock might perform after its IPO, nor are they reliable indicators of its performance in the long run.
"Despite the implications of these findings, investors as a group tend to correct themselves in the presence of new information about how the markets operate," he said. "You shouldn't make changes to your stock portfolio based on our findings. The primary contribution of this paper is to add a piece to the jigsaw of understanding how markets operate."
What the findings did offer, Oppenheimer said, was another piece of evidence that markets -- and therefore the large groups of people who invest in them -- are not the rationally-functioning entities that some experts believe them to be.
"This is not the only factor that plays a role in stock performance," he said. "A number of other economic and psychological factors undoubtedly play a role as well. This study does not argue that psychology is more important than economics, but rather that one cannot ignore psychological variables when constructing models of stock performance."
References
Predicting Short-Term Stock Fluctuations by Using Processing Fluency
Sunday, 28 May 2006
Surreal Estate
The other day my younger brother called me and said:
- "We should buy a house. Anywhere. The real estate market is going up. It is going and going. And it is going up - ariba, ariba, papah!"
I could picture my brother climbing up on his desk in the middle of the trading floor where he works - overlooking the dramatic Manhattan skyline - and making silent house music movements with his entire body, imititating the elevating flight of an eagle to express his excitement.
I was now getting slightly agitated myself as well, and decided to inquire further.
- "Really, it's going up? How do we know?"
- "People say it is going up"
- "People who?"
- "People, you know"
- "But how do the people know? Is there is a real estate index we can take a look at? Because, you see, when we say that the stock market is going up, we really mean that an index on the market is going up."
- "An index?"
- "Yes, an index is a a complex mathematical formula called the average. You take the stock prices and calculate their average, but you call it an index instead, and now everybody will look at it and talk about it. And they'll say the S&P 500, or the Dow Jones is going up, for instance."
- "Mmh. No, there is no index in real estate market that most people would know of. And I really do not know why. But trust me on this - it's going up anyway"
Why Would it Not?
I hung up, thought about it for a moment, and I could think of at least three reasons why real estate should never go up, and why owning a flat or house is a liability, rather than an asset. Here are the reasons:
1. Life wears away - so does the house we live in. In fact, the real price of the house will depreciate every year since it needs constant repairs
2. The bank wants its money - most houses are bought with mortgages, and you have to pay interest on the mortgage which is what any reasonable person would tell you an extra cost
3. The government wants its money - on any property, you will have to pay property taxes
Given all this, it is hard for me to see how the value of any property would increase, but I guess people know the best
References
Homeowners' Dreams
- "We should buy a house. Anywhere. The real estate market is going up. It is going and going. And it is going up - ariba, ariba, papah!"
I could picture my brother climbing up on his desk in the middle of the trading floor where he works - overlooking the dramatic Manhattan skyline - and making silent house music movements with his entire body, imititating the elevating flight of an eagle to express his excitement.
I was now getting slightly agitated myself as well, and decided to inquire further.
- "Really, it's going up? How do we know?"
- "People say it is going up"
- "People who?"
- "People, you know"
- "But how do the people know? Is there is a real estate index we can take a look at? Because, you see, when we say that the stock market is going up, we really mean that an index on the market is going up."
- "An index?"
- "Yes, an index is a a complex mathematical formula called the average. You take the stock prices and calculate their average, but you call it an index instead, and now everybody will look at it and talk about it. And they'll say the S&P 500, or the Dow Jones is going up, for instance."
- "Mmh. No, there is no index in real estate market that most people would know of. And I really do not know why. But trust me on this - it's going up anyway"
Why Would it Not?
I hung up, thought about it for a moment, and I could think of at least three reasons why real estate should never go up, and why owning a flat or house is a liability, rather than an asset. Here are the reasons:
1. Life wears away - so does the house we live in. In fact, the real price of the house will depreciate every year since it needs constant repairs
2. The bank wants its money - most houses are bought with mortgages, and you have to pay interest on the mortgage which is what any reasonable person would tell you an extra cost
3. The government wants its money - on any property, you will have to pay property taxes
Given all this, it is hard for me to see how the value of any property would increase, but I guess people know the best
References
Homeowners' Dreams
Precious Nothing
While walking by a Big Bank in new york the other day I could not help noticing a sign on the bank's window: "Come and open a savings account with us!"
I looked at the sign, and asked myself how it is possible that people save money. I realised that in fact i had never seen money. No one has. That is, we have seen some of its carriers - dollar bills, credit cards, travel checks, coins. These physical objects carry money, but are not money itself, if you really think about it.
For, when we send money overseas via moneygram or in any other similar manner, for example, the fact is that something else altogether must move. No bills, no credit cards, no physical objects as such. So money must be that thing that they all have in common, something we cannot see.
Bills that most people consider money, are actual carriers of an abtract, invisible concept the same way a newspaper is the carrier of news, but not the news itself. things that we see are merely metaphors for money, but not the thing itself.
Periodic Table
Later at home, I dug out my high school inorganic chemistry book and checked the Mendelev's periodic table to see if money was there. For if it were really to exist, it should have some physical shape, smell or form. It should also be in a gaseous, liquid or solid state. When i looked at the table, I realised that i had remembered correctly - money was not in the periodic table.
Precious Nothing
So how can we save something that does not have shape, smell, or does not even consist of atoms? Beats me.
I do not know any vessels that could capture something that is not in the periodic table. something that is not liquid, gaseous or solid. But the bank said they have something like that.
Diet Barter
I then asked two of my friends the question 'what is money?', and i got two kinds of answers. The first artist said money is 'diet barter'. an interesting view, but the other answer was even more thoughtful.
Velocity of Trust
It turns out that the true nature of money is that is not bulk concept, but instead it seems to exist only through its velocity. That is, money itself as a storable concept does not exist, but only the idea of exchanging its carrier exists. The person who came up with the word currency knew that. in fact, the very word currency comes from the latin root of the word curire which means to run.
That is, the person who named money or its other variant currency meant that the money only manifests itself only in its velocity, or movement. Other than that, I am afraid it does not exist.
This explains - among many other things - why countries like the united states or finland can run larger and larger current account deficits. indefinitely. That is, we can owe more money for ever as long as we can increase its velocity. More velocity, more money. Because money is velocity - velocity of trust.
Conversely, it also explains why countries with high savings rates cannot grow. Because you cannot capture velocity of something that does not exist, no matter how hard you try.
I looked at the sign, and asked myself how it is possible that people save money. I realised that in fact i had never seen money. No one has. That is, we have seen some of its carriers - dollar bills, credit cards, travel checks, coins. These physical objects carry money, but are not money itself, if you really think about it.
For, when we send money overseas via moneygram or in any other similar manner, for example, the fact is that something else altogether must move. No bills, no credit cards, no physical objects as such. So money must be that thing that they all have in common, something we cannot see.
Bills that most people consider money, are actual carriers of an abtract, invisible concept the same way a newspaper is the carrier of news, but not the news itself. things that we see are merely metaphors for money, but not the thing itself.
Periodic Table
Later at home, I dug out my high school inorganic chemistry book and checked the Mendelev's periodic table to see if money was there. For if it were really to exist, it should have some physical shape, smell or form. It should also be in a gaseous, liquid or solid state. When i looked at the table, I realised that i had remembered correctly - money was not in the periodic table.
Precious Nothing
So how can we save something that does not have shape, smell, or does not even consist of atoms? Beats me.
I do not know any vessels that could capture something that is not in the periodic table. something that is not liquid, gaseous or solid. But the bank said they have something like that.
Diet Barter
I then asked two of my friends the question 'what is money?', and i got two kinds of answers. The first artist said money is 'diet barter'. an interesting view, but the other answer was even more thoughtful.
Velocity of Trust
It turns out that the true nature of money is that is not bulk concept, but instead it seems to exist only through its velocity. That is, money itself as a storable concept does not exist, but only the idea of exchanging its carrier exists. The person who came up with the word currency knew that. in fact, the very word currency comes from the latin root of the word curire which means to run.
That is, the person who named money or its other variant currency meant that the money only manifests itself only in its velocity, or movement. Other than that, I am afraid it does not exist.
This explains - among many other things - why countries like the united states or finland can run larger and larger current account deficits. indefinitely. That is, we can owe more money for ever as long as we can increase its velocity. More velocity, more money. Because money is velocity - velocity of trust.
Conversely, it also explains why countries with high savings rates cannot grow. Because you cannot capture velocity of something that does not exist, no matter how hard you try.
Trust Velocity
A Differential Equation for Trust
Although it is hard to know what money is - we have only seen its carriers (coins, bills, credit cards) but never money itself - one thing we do know very well is its related concept - interest rate. So
interest - i = time value of money
or in other words
r (risk free rate) + s (credit spread, reverse trust factor) = i = d(M)/dt [first derivative of money with respect to time]
Now, let's say trust u = 1/s, ie, infinite spread -> no trust
and conversely, infinite trust -> zero spread (government)
so rewriting:
r + 1/u = d(m)/dt
Next, let us look at the two possible cases:
1. r = 0 (zero real interest rates)
We now have:
1/u = d(m)/dt
integrating both sides wrs time yields:
M = integral(1/u)
That is, we observe that money is some kind of integral of trust, or 'super' trust. The real essence of money is that it is not a measure of trust, but 'super' trust, like it says on the bill - 'In God We Trust'
2. s = 0 (zero credit spread)
Only some governments have that, or rather it's the rate at which governments lend each other. What's the body in place to directly influence that? The World Bank
In World Bank We Trust
So even if there is no God, we can all rest in peace since there is always the world bank.
Although it is hard to know what money is - we have only seen its carriers (coins, bills, credit cards) but never money itself - one thing we do know very well is its related concept - interest rate. So
interest - i = time value of money
or in other words
r (risk free rate) + s (credit spread, reverse trust factor) = i = d(M)/dt [first derivative of money with respect to time]
Now, let's say trust u = 1/s, ie, infinite spread -> no trust
and conversely, infinite trust -> zero spread (government)
so rewriting:
r + 1/u = d(m)/dt
Next, let us look at the two possible cases:
1. r = 0 (zero real interest rates)
We now have:
1/u = d(m)/dt
integrating both sides wrs time yields:
M = integral(1/u)
That is, we observe that money is some kind of integral of trust, or 'super' trust. The real essence of money is that it is not a measure of trust, but 'super' trust, like it says on the bill - 'In God We Trust'
2. s = 0 (zero credit spread)
Only some governments have that, or rather it's the rate at which governments lend each other. What's the body in place to directly influence that? The World Bank
In World Bank We Trust
So even if there is no God, we can all rest in peace since there is always the world bank.
Flies on God's Coffee Table
A few years ago Nature - one of the most venerable and prestigious science magazines in the world - asked its readers who are primarily scientists what their attitude towards religion was and to what extent, if any, they believe in something we might call god.
based on the responses, nature then ranked the four main groups of its readers - mathematicians, physicists, chemists and biologists. the ranking was the following, from most religious to least religious:
1. mathematicians
2. physicists
3. chemists
4. biologists
the order is interesting for a couple of reasons. first, it seems to be in the reverse order of the scientists’ proximity to study of life and living things. that is, the closer you see the inner workings of life and the more you work with them every day, the less likely you are to believe in something divine.
but more interestingly, it also seems to reflect the decreasing levels of abstraction in each of the sciences. physics and chemistry were until very recently very descriptive, not highly mathematical sciences. today, they are increasing mathematical to the extent that a few years ago the chemistry nobel prize went to two mathematicians. biology has been the last stronghold of verbosity and descriptive enumeration, but even this science - luckily - is changing.
this prelude aside, it seems to be very hard to explain why some great scientist such as einstein used religious vocabulary in their thinking. Is it not anti-scientific to entertain religious thoughts? is it a sign of clear senility and fear of death that drives them there towards the end of the life?
to answer this question, I often recall a thought experiment put forth by a little-known, but fascinating swedish-finnish philosopher george henrik von wright who was a student of wittgenstein, and succeeded him at cambridge on his chair as a philosophy professor.
the von wright thought experiment went as follows. imagine sitting at a coffee table in paris (or bombay for that matter), conversing with your friend and noticing a fly hovering above your coffee table. it is quite likely that the fly has very limited, if any, understanding of the conversation you and your friend are having. it is also missing several faculties to see and understand the world the way you see and moreover, it is probably completely unaware of your existence, at least the way you experience it.
but what if we are no different from the fly with respect to some other being? what if we are simply flies on god's coffee table so to speak?
this is not to be taken very literally, but simply goes to illustrate that one way to understand consciousness of the world is that there are levels of consciousness in animal kingdom and the levels with less faculties or lower on the evolutionary food chain so to speak, cannot by definition understand levels above them.
wright suggested that it is very arrogant to always assume that you are the last level. it is an instinctive thing to feel, but not necessarily the most logical then. this experiment is the best illustration of an agnostic attitude which - in my humble opinion - is the only attitude a rational person can have towards such questions. that is, rather than negating god (a-theos) we should be admitting that we simply cannot know (a-gnos).
thus, for many scientists the question of religion reduces simply to being humble and admitting one's limits since this is in fact the best attitude for learning, researching and observing things around you. So not only the best but in fact the only attitude towards learning is to put one’s ego aside and assume for a moment that you might not know everything. because if we did why would we need science or any research. or as einstein put it: “If we knew what we were doing, it would not be called research, would it?”
based on the responses, nature then ranked the four main groups of its readers - mathematicians, physicists, chemists and biologists. the ranking was the following, from most religious to least religious:
1. mathematicians
2. physicists
3. chemists
4. biologists
the order is interesting for a couple of reasons. first, it seems to be in the reverse order of the scientists’ proximity to study of life and living things. that is, the closer you see the inner workings of life and the more you work with them every day, the less likely you are to believe in something divine.
but more interestingly, it also seems to reflect the decreasing levels of abstraction in each of the sciences. physics and chemistry were until very recently very descriptive, not highly mathematical sciences. today, they are increasing mathematical to the extent that a few years ago the chemistry nobel prize went to two mathematicians. biology has been the last stronghold of verbosity and descriptive enumeration, but even this science - luckily - is changing.
this prelude aside, it seems to be very hard to explain why some great scientist such as einstein used religious vocabulary in their thinking. Is it not anti-scientific to entertain religious thoughts? is it a sign of clear senility and fear of death that drives them there towards the end of the life?
to answer this question, I often recall a thought experiment put forth by a little-known, but fascinating swedish-finnish philosopher george henrik von wright who was a student of wittgenstein, and succeeded him at cambridge on his chair as a philosophy professor.
the von wright thought experiment went as follows. imagine sitting at a coffee table in paris (or bombay for that matter), conversing with your friend and noticing a fly hovering above your coffee table. it is quite likely that the fly has very limited, if any, understanding of the conversation you and your friend are having. it is also missing several faculties to see and understand the world the way you see and moreover, it is probably completely unaware of your existence, at least the way you experience it.
but what if we are no different from the fly with respect to some other being? what if we are simply flies on god's coffee table so to speak?
this is not to be taken very literally, but simply goes to illustrate that one way to understand consciousness of the world is that there are levels of consciousness in animal kingdom and the levels with less faculties or lower on the evolutionary food chain so to speak, cannot by definition understand levels above them.
wright suggested that it is very arrogant to always assume that you are the last level. it is an instinctive thing to feel, but not necessarily the most logical then. this experiment is the best illustration of an agnostic attitude which - in my humble opinion - is the only attitude a rational person can have towards such questions. that is, rather than negating god (a-theos) we should be admitting that we simply cannot know (a-gnos).
thus, for many scientists the question of religion reduces simply to being humble and admitting one's limits since this is in fact the best attitude for learning, researching and observing things around you. So not only the best but in fact the only attitude towards learning is to put one’s ego aside and assume for a moment that you might not know everything. because if we did why would we need science or any research. or as einstein put it: “If we knew what we were doing, it would not be called research, would it?”
parable of train
you see things that are and ask 'why?' i dream of things that never were and ask 'why not?' - g b shaw
closet science lovers
my ex-wife who is as much of a closet science lover as myself, once came up with a wonderful metaphor for our journey as humanity across the endless night of history. the comparison highlighted the various roles that we all play on the stage of history and went roughly as follows.
if civilization were a train that is rushing forward through time, and we got a momentary glimpse of the cross section of the train, we could begin identifying the various people who are on it, or who might have a role in making the train go forward, and that would help us in turn to understand the various roles that people today play in our place and time.
engineers
firstly, we would see a group of serious engineers with clean white shirts and dark pants who designed the train, and the mechanics in blue oily overalls who put the train together in the first place based on the detailed designs of the serious engineers. the work of both groups is very respectable since it is very visible and everybody pays them some respect for a moment, maybe even clap. and then the clappers would return to the obsessions of their own private lives a moment later since the train is built and why dwell on it, right?
coal room
there are also guys working hard in the coal room to make sure that the fuel gets replenished, and while they should also deserve kudos, they usually never hear even a simple thank you, since they are hidden away from most people in the dark belly of the train and it is so much more convenient to pretend that they really do not exist.
brahmines of trust
you also see the bankers with their slick suits, cigars, hennessy glasses and arrogant bravado (if we are not the rulers of the universe, then who is? c'mon!) since they trust train makers (for now) and finance the ride. they unfortunately might have actually most power on the train since they could turn off the money flow immediately and the entire journey show would stop like a paralyzed patient whose circulation has been suddenly cut off.
bean counters and priests of torture
we will most certainly notice some lawyers and accountants who are usually full of pimples and wear kitsch retro style ties whil laboring over the books and contracts so that if things go down - and the lawyers always prefer that scenario since they always get paid better in this particular case, never mind about destroying dreams or project - they can start their hideous process of gestapo-style interrogation and torture with cheap tricks of double talk and intimation which they have been trained since the first year of law school.
we would see the lawyers asking the poor entrepreneur absurd, irrelevant questions. but it is too late - the poor entrepreneu had a dream and and took a risk to borrow money to follow this dream. since lawyers are highly glamorised in our times, they deserve a little closer look.
first, imagine the lawyers now litigating the poor entrprenur who had the crazy idea to start the train ride in the first place but something went amiss. now everyone watching this litigation ceremony of humiliation are pretending sympathy, while deep inside they feel glee that the entrepreneur being litigated failed in his quest. for, it seems to be in our nature to feel satisfaction over other peoples failures since it makes our own little less obvious.
the lawyers are very serious, and they only smiles once when they hears the verdict. they smile with a sight of relief when they hear the confirmation that this poor fellow's life is ruined for good since the bank will be grabbing the house and the wife and kids will be leaving him, and once the house is sold, the lawyers will be finally getting their fee. for them, it is also personal matter since all the lawyers really annoyed that no matter how hard they work, they never seems to make as much money as the entrepreneurs.
parrots of journalism
the entire show is closedly watched by the media, the ultimate parrots of mimicry and repetition. without really understanding what is unraveling in front of them, or what is the meaning of it all, the little bitter journalists are busily typing away, taking pictures and re-telling the story adding their own little gruesome and acerbic remarks. to their defence, the journalists could not possibly understand most of the things that they cover since they lack proper education apart from mediocre writing skills, so best they can do is to already repeat what everyone knows anyway.
and after the show, perhaps only some other entrepreneurs the gates, the dell and the jobs of that train world would seem visibly irritated and the would immediately agree to spend some spare change of one billion dollars so his friends would get through a week or so.
haute cuisine
to continue our observation of the train, we would all agree that we also need the chefs to prepare wonderful meals of your choice as we sit back in the restaurant carts, converse and observe the latest fashions around us, men furtively watching the astonishing-looking waitresses (this is the first class, not the coach, if you wish) who glide from table to table and seem to even walk more beautifully than most women could dance.
both men and women are making mental notes of the market value of the jewelry which is at conspicuous display of consumption on many necks, ears and hands, with slight confusion in their mind why they are spending most of their hard-earned money on metal trinklets. but it must be fine after all, since everyone is doing it.
sirens of mimicry
furthermore, we would see the musicians, artists, writers and actors to entertain us with their dramatic exaggerations and the commentary on this human train condition so that the ride would be bearable. Since can all recognize some traces of ourselves in these actors, and we can all laugh at our absurd situation and feel temporary relief from the slightly uneasy fact that we have no idea where the train is heading.
dreamers
finally, while all this is happening, you can spot one more group of people at the head of the train to tell where the train is going in the first place. they usually are not dressed in any remarkable way but invariably they seem very happy, as in a constant trance, with a slight smile on their face looking out of the window. these are the scientists. they look forward out of the train completely oblivious to the quotidian frolic unraveling behind their backs, completely enthralled by the landscape ahead and reading the signs of the landscape so they would know where to go next.
once in a while, they turn around, with agitated smiles on their faces, and as everybody is quieting down, they try to explain us what they are seeing or thinking waving their hands out of the excitement, and write a brief paper so the future generation would also have a record of their insights which change the world in a very deep and permanent way, usually for infinitely better, and will be studied for centuries to come.
when they deliver their message of the new and the unseen, part of the audience loses interest immediately and return to applying lipstick, admiring their new imitation wrist watches and start speculating whether there is desert and if so, if it is their favorite type. But there are some people who listen to the scientists and those have, will have gotten a glimpse of the future, the exciting unknown.
epilogue
'the most beautiful experience we can have is the mysterious. It is the fundamental emotion that stands at the cradle of true art and true science. Whoever does not know it and can no longer wonder, no longer marvel, is as good as dead, and his eyes are dimmed. It was the experience of mystery even if mixed with fear that engendered religion. A knowledge of the existence of something we cannot penetrate, our perceptions of the profoundest reason and the most radiant beauty, which only in their most primitive forms are accessible to our minds: it is this knowledge and this emotion that constitute true religiosity. In this sense, and only this sense, I am a deeply religious man' - alebert einstein, the world as i see it (1931)
closet science lovers
my ex-wife who is as much of a closet science lover as myself, once came up with a wonderful metaphor for our journey as humanity across the endless night of history. the comparison highlighted the various roles that we all play on the stage of history and went roughly as follows.
if civilization were a train that is rushing forward through time, and we got a momentary glimpse of the cross section of the train, we could begin identifying the various people who are on it, or who might have a role in making the train go forward, and that would help us in turn to understand the various roles that people today play in our place and time.
engineers
firstly, we would see a group of serious engineers with clean white shirts and dark pants who designed the train, and the mechanics in blue oily overalls who put the train together in the first place based on the detailed designs of the serious engineers. the work of both groups is very respectable since it is very visible and everybody pays them some respect for a moment, maybe even clap. and then the clappers would return to the obsessions of their own private lives a moment later since the train is built and why dwell on it, right?
coal room
there are also guys working hard in the coal room to make sure that the fuel gets replenished, and while they should also deserve kudos, they usually never hear even a simple thank you, since they are hidden away from most people in the dark belly of the train and it is so much more convenient to pretend that they really do not exist.
brahmines of trust
you also see the bankers with their slick suits, cigars, hennessy glasses and arrogant bravado (if we are not the rulers of the universe, then who is? c'mon!) since they trust train makers (for now) and finance the ride. they unfortunately might have actually most power on the train since they could turn off the money flow immediately and the entire journey show would stop like a paralyzed patient whose circulation has been suddenly cut off.
bean counters and priests of torture
we will most certainly notice some lawyers and accountants who are usually full of pimples and wear kitsch retro style ties whil laboring over the books and contracts so that if things go down - and the lawyers always prefer that scenario since they always get paid better in this particular case, never mind about destroying dreams or project - they can start their hideous process of gestapo-style interrogation and torture with cheap tricks of double talk and intimation which they have been trained since the first year of law school.
we would see the lawyers asking the poor entrepreneur absurd, irrelevant questions. but it is too late - the poor entrepreneu had a dream and and took a risk to borrow money to follow this dream. since lawyers are highly glamorised in our times, they deserve a little closer look.
first, imagine the lawyers now litigating the poor entrprenur who had the crazy idea to start the train ride in the first place but something went amiss. now everyone watching this litigation ceremony of humiliation are pretending sympathy, while deep inside they feel glee that the entrepreneur being litigated failed in his quest. for, it seems to be in our nature to feel satisfaction over other peoples failures since it makes our own little less obvious.
the lawyers are very serious, and they only smiles once when they hears the verdict. they smile with a sight of relief when they hear the confirmation that this poor fellow's life is ruined for good since the bank will be grabbing the house and the wife and kids will be leaving him, and once the house is sold, the lawyers will be finally getting their fee. for them, it is also personal matter since all the lawyers really annoyed that no matter how hard they work, they never seems to make as much money as the entrepreneurs.
parrots of journalism
the entire show is closedly watched by the media, the ultimate parrots of mimicry and repetition. without really understanding what is unraveling in front of them, or what is the meaning of it all, the little bitter journalists are busily typing away, taking pictures and re-telling the story adding their own little gruesome and acerbic remarks. to their defence, the journalists could not possibly understand most of the things that they cover since they lack proper education apart from mediocre writing skills, so best they can do is to already repeat what everyone knows anyway.
and after the show, perhaps only some other entrepreneurs the gates, the dell and the jobs of that train world would seem visibly irritated and the would immediately agree to spend some spare change of one billion dollars so his friends would get through a week or so.
haute cuisine
to continue our observation of the train, we would all agree that we also need the chefs to prepare wonderful meals of your choice as we sit back in the restaurant carts, converse and observe the latest fashions around us, men furtively watching the astonishing-looking waitresses (this is the first class, not the coach, if you wish) who glide from table to table and seem to even walk more beautifully than most women could dance.
both men and women are making mental notes of the market value of the jewelry which is at conspicuous display of consumption on many necks, ears and hands, with slight confusion in their mind why they are spending most of their hard-earned money on metal trinklets. but it must be fine after all, since everyone is doing it.
sirens of mimicry
furthermore, we would see the musicians, artists, writers and actors to entertain us with their dramatic exaggerations and the commentary on this human train condition so that the ride would be bearable. Since can all recognize some traces of ourselves in these actors, and we can all laugh at our absurd situation and feel temporary relief from the slightly uneasy fact that we have no idea where the train is heading.
dreamers
finally, while all this is happening, you can spot one more group of people at the head of the train to tell where the train is going in the first place. they usually are not dressed in any remarkable way but invariably they seem very happy, as in a constant trance, with a slight smile on their face looking out of the window. these are the scientists. they look forward out of the train completely oblivious to the quotidian frolic unraveling behind their backs, completely enthralled by the landscape ahead and reading the signs of the landscape so they would know where to go next.
once in a while, they turn around, with agitated smiles on their faces, and as everybody is quieting down, they try to explain us what they are seeing or thinking waving their hands out of the excitement, and write a brief paper so the future generation would also have a record of their insights which change the world in a very deep and permanent way, usually for infinitely better, and will be studied for centuries to come.
when they deliver their message of the new and the unseen, part of the audience loses interest immediately and return to applying lipstick, admiring their new imitation wrist watches and start speculating whether there is desert and if so, if it is their favorite type. But there are some people who listen to the scientists and those have, will have gotten a glimpse of the future, the exciting unknown.
epilogue
'the most beautiful experience we can have is the mysterious. It is the fundamental emotion that stands at the cradle of true art and true science. Whoever does not know it and can no longer wonder, no longer marvel, is as good as dead, and his eyes are dimmed. It was the experience of mystery even if mixed with fear that engendered religion. A knowledge of the existence of something we cannot penetrate, our perceptions of the profoundest reason and the most radiant beauty, which only in their most primitive forms are accessible to our minds: it is this knowledge and this emotion that constitute true religiosity. In this sense, and only this sense, I am a deeply religious man' - alebert einstein, the world as i see it (1931)
Subscribe to:
Posts (Atom)