decision-making, learning

Non-Decisions

Yesterday, a friend of mine forwarded me an email which he had first sent in 2010. He was reminding me of an opportunity from back then, which he had suggested to me. In the original mail he noted that it was ‘the easiest time ever to do this, so please get on it.’ I didn’t. Also copied in that mail were four others who he also encouraged to ‘get on it.’ They didn’t. As I now read how the communication evolved, it is clear that, from the very beginning, there was questionable commitment to the enterprise. Ultimately the endeavour petered out in a sort of muted fashion, under the usual groaning about the administrative hassles (documents, money, time, you know, the usual fare) of simply starting. We moved on with our lives, all was forgotten.

Until yesterday.

Without going into details—mainly because I am still a little too upset by the whole business—I can say that the decision to do nothing was quite possibly one of the worst I have ever made. It may even be more accurate to speak of having made a non-decision. An opportunity was forwarded from someone I knew to be credible, who himself was putting something meaningful at risk to take advantage of this opportunity. (That was how strong his conviction was.) And yet, somehow, I ignored it and moved on, zombie-like, to some new ridiculous distraction which was more immediately gratifying and less difficult.

Now, of course, it is easier to see the future when it becomes the past. I have the benefit of knowing now what the past eight years looked like. Back in 2010, it was all uncertainty. And with uncertainty comes the real burden of trying to make important decisions using what is necessarily incomplete information. That uncertainty often leads to a sort of paralysis. We do nothing, and hope that that difficult situation resolves itself. Sometimes it does, we get lucky. But sometimes we don’t need too much luck. Sometimes we have what gamblers call an edge. At such times we really can say something intelligent about the future. We can influence the outcomes, or tilt the odds to ensure that whichever outcome emerges, we generally end up not too bad. Mohnish Pabrai, who wrote one of the smartest investment texts I’ve read, memorably described such situations as: “Heads I win; tails I don’t lose too much.”

Consider this wonderful post by Scott Alexander, where he discusses a heads-I-win-tails-I-don’t- lose-too-much situation involving Bitcoin. He observes that though his readers were some of the earliest people to hear about and understand the promise of cryptocurrencies—it had been first discussed on the site in early 2011, when coins were trading for $0.91—very few of the site’s regular readers made any meaningful money as crypto-investors. His description of one of the lessons he took out of this is instructive:

When I first saw the posts saying that cryptocurrency investments were a good idea, I agreed with them. I even googled “how to get Bitcoin” and got a bunch of technical stuff that seemed like a lot of work. So I didn’t do it.

Back in 2016, my father asked me what this whole “cryptocurrency” thing was, and I told him he should invest in Ethereum. He did, and centupled his money. I never got around to it, and didn’t.

On the broader scale, I saw what looked like widespread consensus on a lot of the relevant Less Wrong posts that investing in cryptocurrency was a good idea. The problem wasn’t that we failed at the epistemic task of identifying it as an opportunity. The problem was that not too many people converted that into action.

That last line is critical. Like the case with my friend, they recognised the opportunity, they understood it, and they were being instructed by credible people who themselves had something at risk. Beyond that, the potential upside of their investment was so vast that the downside (Min return = -100%) seemed irrelevant. Anyone who had invested $10 in Bitcoins when they first read about it on the site, even after the huge swings in price over the past few months, would be, you know, 50-cent, basically.

And yet, again like me, “not too many people converted that into action.” Fewer than 3% of the site’s readers (including the author) made decent money in cryptocurrencies (as at the end of January 2018).

And this is perhaps not surprising. Most of the time the future is a haze. We cannot do much but our best every day and hope that things don’t get too rough. But on those few occasions when you know something about the future that most people don’t, when you can pick the joker in the pack, when you can get an extremely valuable low-cost option, or when you can setup a heads-I-win-tails-I-don’t-lose-too-much situation, for God’s sake, don’t make a non-decision, jump in with both feet.

I note the irony of referencing this particular investing legend after a discussion on crypto speculation, but I think this quote from Charlie Munger closes things off quite nicely:

The wise ones bet heavily when the world offers them that opportunity. They bet big when they have the odds. And the rest of the time, they don’t.

True in investing. True in life.

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books

How Many Books Did You Read Last Year?

This is a question that gets asked a lot around this time of the year. It is one I struggle with. Of course, I could do a simple tally of all the books I started and finished in the calendar year, but what would be the point? If you learned that I read forty, and some other fellow read twenty, or even ten, what is it to you? What can we reasonably deduce from this information?

I think the problem here stems from how different my goal in reading is from most people’s. A lot of us read primarily because we want advice, hacks, marketable skills, or to learn the facts about a particular area of knowledge. We want something quite concrete out of it. We would like to answer questions like how do I code using javascript, what led to the Nigerian Civil War, what is cryptocurrency.

These are all important questions, which deserve to be studied. But I find that in narrowing ourselves to this approach to reading, we end up with a utilitarian relationship with the written word. Reading becomes a linear activity, and not a very pleasurable one at that. It becomes an exercise in stacking bricks, each new brick making the pile exactly one brick taller. It does not help that we have all consciously or unconsciously imbibed the 10,000 hour rule of practice—an idea that suggests a linear relationship between input and output in most affairs. The whole thing brings to mind the guiding ethos which drives people to try to learn speed reading. Even if you are successful, it is worthless because most of us lack speed comprehension. It is hard to deduce anything if one fellow can read at 200 wpm while the other manages only half of that. It is a pointless metric for most readers.

These practices are in the spirit of our market-driven, efficiency-obsessed smartphone generation. Our habits are gamefied. We need tokens to measure progress. We need scores to know that we are winning. We need to show profits every quarter.

But I think this is a much too narrow relationship with the written word. We need to augment, if not completely abandon, this industrial reading habit. Productivity of reading (which is what the number of books read question enquires about) should be de-emphasised. Books are not metres or kilograms to be measured. There are thousands of books not worth even a perusal, and twitter threads that can change your life.

We should instead try to see reading as fundamentally non-linear. The benefits of reading come unexpectedly, in spurts, and are certainly not always factual or directly tangible. Books do different things to us. Some books help us to make unusual connections or to see reality better. Others help us to become better, wiser human beings. Some books we read for the simple pleasure of it. And then there are books which transcend. How do I quantify Paul Kalanithi’s book When Breath Becomes Air?

These different books are read differently, and at varying speeds. Marcus Aurelius can be slow, ponderous reading. Enid Blyton is a breeze, a rush of fantasy, escapism. A book on programming is probably better consumed in little doses. And we must sing Wesleyan hymns.

When we read in this way, we are not stacking bricks, we are kneading clay, baking bricks, stacking here, discarding there, maybe trying wood or cement in its place. The critical distinction is in our attitude to reading. It is about forging a transcendent relationship with authors who we may never meet, through their words and ideas. This can only happen when we discard the framing of books as textbooks.

Rather than approaching reading as an exercise in what amounts to hitting meaningless targets, I think it is much better to develop a reading habit which allows you to get through books and to have their words pass through you. Sometimes, that involves reading a lot of books fast or is a scattershot fashion, a paragraph here a chapter there. At other times, it is reading only a handful of books slowly and over a long time. And at still others, it is rereading old books, trying to decipher meanings or lessons that had eluded you before, or to once again experience the high (or low) which came from reading it the first time. Jorge Luis Borges said, ‘Besides, rereading, not reading is what counts.’

How many books did I read last year? I don’t know, I just read.

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nigeria

Great Service

Living and doing business in Nigeria carries its special challenges. People constantly complain about the poor quality of service they get from businesses or from the government.  On average, I think the issues people raise are valid, we do have a dearth of great service generally.

But leaving it there is not enough. I think it is even more important to use these experiences as a reference point to measure how we are doing. What sort of service are you providing in your own role? The great thing about being in an environment where we are constantly on the receiving end of bad work is that we know what it feels like and we know when we are the givers of bad service. What I’ve found is that it is as much a behavioural challenge as anything else. In other words, you can’t ‘spot’ deliver service. You don’t choose to do great work today and tomorrow do bad work. It is a binary situation—you are either great or bad. For me this means nitpicking as a way of life. Constantly crossing my t’s and dotting my i’s, because that is the only way I can maintain a habit of excellence. For people building businesses, organisations, I think they are actually involved in social engineering to help people—especially young people—imbibe a standard which they may not know exists because they have lived for so long in an environment where shitty service is the norm. And I think this could be a decisive competitive advantage, especially here, where the bar for great service is so low.

Something to think about.

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nigeria

The Ground Beneath Your Feet

 

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Yesterday, I got to speaking with a fellow I had met a few days before at a friend’s wedding in beautiful Cape Town. We had both just arrived from SA and had the chance to chat while making our way through the arrivals queue. Almost as soon as we started talking the conversation turned to thoughts about our futures. This wasn’t surprising given the events of the past few days.

You see in attendance at this wedding was a cross-section of Nigerian professionals between 30 and 35. Most of us are at about the 10-year mark in our careers and are working for big organisations around the world. Some are recently married—3 or 4 years—some have a thought to get married soon. Some have kids, others are thinking about them. The gatherers had mostly come out of the same secondary schools or had met early in their careers in Lagos, but they had since fanned out across the world. San Francisco, Boston, London, Philadelphia, Geneva, Cape Town, Johannesburg, Abuja, and yes, Lagos, were some of the cities represented there. In short, a reunion of sorts, and a good time to reflect.

What had the past decade taught us? How had our different careers unfolded and could it show us anything about the next ten or twenty years? There are of course many dangers in comparing oneself to anybody else, but there are also lessons, realisations, admissions which can help to clarify what we must do or to dig-up some buried truth which we have been too afraid to confront.

For the folks living outside Nigeria, there was a quality of leisurely confidence in their demeanour. These were young, rich men. They’d seen their incomes rise, through the last 10 years. Predominantly finance types, they had hustled their way into some investment banking, private equity, trading or investment management job in the developed world right after the financial crisis of 2008, and had ridden the wave of increasing market valuations, even as inflation held steady or fell, economies grew, and unemployment rates dropped across the developed world. Young money, really.

For the Nigeria-based folks, the same period has been a bit more challenging. Of course there was the period of the oil boom. After a violent collapse in 2008, between 2009 and 2011 the oil price climbed relentlessly from the 40s to the 100s and remained there through 2014. As if on cue, Nigeria entered a goldilocks period with a relentless stream of good news. The country was awash with oil dollars, the currency was strong, GDP was revalued upwards to $510bn, and Africa was still rising. Most importantly, the middle class felt rich and there was a new swagger about the nation.

Then the oil market collapsed and the country plunged into a leadership quagmire which metamorphosed into a complete clusterfuck. Incomes which had peaked in dollar terms in the 2011 to 2014 boom years got absolutely crushed in the massive devaluation of 2016. [From the beginning of 2011 to date the naira has more than halved in value against the dollar.] Inflation gathered a head of steam just as the economy was grinding to a halt, attended by a new reality which promised that Nigeria was ‘open for business’ while doing just about everything to ensure it was closed. Whispers of ‘stagflation,’ ‘IMF,’ ‘debt,’ ‘structural adjustment programme’ grew, words which I naively thought we had buried in the 80s. For those in it, it was living through wave after wave of scarcity and dislocation. No petrol, no diesel, no kerosene, no jet fuel, no dollars. Older Nigerians were better prepared, they spoke wearily of the late 80s and early 90s, when careers, lives, and aspirations were destroyed by macroeconomic events which they were oblivious of. It reminded them too much of it. My father described that period as: “Seeing the ground beneath your feet give way.”

No, there was no leisurely confidence in our demeanour. No young money, things are tough. In that airport yesterday, my friend and I were thinking the same thing: Should we stick around? Does it make sense? We are both fathers, should we really keep our kids here? Nothing is academic when you have kids. If your income gets squeezed by inflation or the exchange rate, you feed them less, or they cannot go to school. Nothing about that is theoretical. It is a bit more serious than social media banter or quips about being optimistic or patriotic. When people make shit-headed economic decisions, they are attacking my livelihood and my aspirations, my kids, my loved ones. And this is kind of the bottomline in all this: The ground we stand on is too uncertain. Sure and sturdy one minute, erupting the very next.

Why am I writing this? I don’t know. I guess I’ve got shit on my mind.

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nigeria, society

The Great Meat Pie Demise

Hardly matters what anyone bloody well says, the Nigerian meat pie is in a bad way.

I grew up on fantastic meat pies. There was nothing quite like it. It didn’t particularly matter if you had them hot or cold, they were perfect. For the first couple of years we had those semi-circular mounds of folded dough with the fork imprints down the outer crust. The IBB years brought us the triangular shaped, flakier meat pies. I recall a surprise samoosa attack launched in the early to mid-90s which was beaten back after heavy fighting in Shell Housing Estate, Port Harcourt. It didn’t matter what was thrown at us—sausage, scotch egg, egg roll, danish, doughnut—we beat it back.

Meat pies were consistent. The perfect ratio of potato, beef, carrot and seasoning. Occasionally one came across an amateur creation, its distinct telltale sign the excessiveness of potato in the filling. But other than these rare cases, it was meat pie heaven. Nigeria was meat pie country.

And that was before the Great Mr Biggs Meat Pies.

You don’t really know what a meat pie is if you never had a Mr Biggs Meat Pie in its heyday. We capitalise the ‘meat pie’ in Mr Biggs Meat Pie for a reason. To say it was in a class of is own is absurd: this was a mass produced piece of food heaven. I remember there was an AGIP filling station in front of Tejuosho Market, between Ojuelegba and the railway line in Yaba. The promise of a warm pie was the only reason I could tolerate the interminable unpleasantness of a day at the market with my mother. It was more than just food, it was a cultural totem.

These days what passes for meat pie are dry, unimaginative, vulgar, insulting pieces of thick dough. That’s if you find it. In 2017 we stopped the pretense altogether. In many otherwise fine establishments the meat pie has been eradicated by an invasive species known as the sharwarma. We have lost a great many things in this country, and our meat pies may be the most tragic of all.

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random

James Comey, Church Problems, Investing Gist & Modesty Culture

As promised, here is the first of what will hopefully become a weekly post sharing the best content I found on the internet the week before. The plan is to share a maximum of five articles (or videos or tweets or podcasts and so on). I may from time-to-time exceed this limit if I am inspired. This is my blog, not secondary school. The main criterion for selecting content is that it has to be something which I felt was worth the time it took for me to engage with it.

With that, here is what we have for this week:

James Comey’s Testimony:

By now I hope you’ve had the time to read former FBI Director James Comey’s written testimony to the U.S. Senate Intelligence Committee. If you haven’t, do so now. You will struggle to find better writing anywhere this year. Mr Comey writes wonderfully descriptive passages without wasting words, a stark contrast to how most of us were taught to write in Nigeria. This is a great analysis of that testimony. You will also do well to watch the actual testimony he gave on the Hill. He is concise, clear, and an absolute joy to listen to.

Tribal Intrigues in the Nigerian Church:

You have to realise that we are all out of our goddam minds in this country. Yes, I am mad. How else do we explain this aptly-named post by Cheta Nwanze about tribalism in the Nigerian Catholic Church. The intrigues and shenanigans put Lagos APC primaries to shame. Things have gotten so heated that the Pope has had to step in and set things straight in Nigeria. And here is a charming letter from some parishioners, addressed to the Catholic Archdiocese of Benin City. Bini people don’t mince their words, read:

Your Lordship, it has become clear that you saw in your appointment as administrator of the Archdiocese, an opportunity to fulfil your life-long ambition of entrenching your tribesmen in the plum offices of the Archdiocese. In plotting and executing this unholy assignment Your Lordship, we are particularly piqued that you resorted to telling lies and deception in order to achieve your desires

Satisfaction Yield:

This is an article on investing which explains how the journey to an investment outcome can heavily influence how we think about it. Say you have two investors, Femi and Aisha. Femi invests N100,000 and after one year receives N110,000, no drama. Aisha invests N100,000 and 6 months in sees her investment drop to N50,000 (half the original amount). She sticks it out and the investment eventually recovers to end at N110,000 at the end of the year. They both made the same amount of money and neither is better or worse off than the other financially. But I have to think that Femi will be inclined to think that investing is easy while Aisha will tell her people that it is not a beans.

This has many consequences. For instance, it helps to explain why quite a few people prefer investments in property to financial securities such as shares. If you buy a property in Lekki and are taking in rent, no one tells you the daily price of your property, it does not trade. You rest easy in the knowledge that you have some sort of wealth that is ‘growing.’ But if you invest in GT Bank shares there is a veritable tornado of sources telling you how your ‘portfolio’ is doing every second. Small drops in price cause emotional pain while small increases give you a sense of happiness. These two investments are not fundamentally different: You hope that you’ll get growth in your investment amount and some income (for property that is rent, for shares, dividends). But the experience of owning these two investments is night and day. [There are things like liquidity which make them different, but please ignore these for now.]

An Interesting Document:

Here is an interesting secret document from the British Colonial Office during the time of the Willink Commission (a commission which was setup to consider the issue of the minorities in the soon-to-be independent nation of Nigeria). The minority issue is becoming more relevant given the growing agitation for greater independence from Abuja. It is a short document and an interesting look into how so many of the issues of today were anticipated as far back as 1950s.

A fantastic thread:

This is a thread about the absurdity of men policing the dressing of women because they (men) are unable to control themselves. Here is a passage which kinda summarises the WTFishness of this whole business:

Men speaking:

I think you should wear something else, because seeing your skin makes me feel aroused. And that arousal is strong and I haven’t learned how to appropriately manage it. So please change your clothes.

To borrow the words of the author, this is completely BONKERS!

Have a great week.

 

 

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nigeria, society

Blow Scatter or A Better Average

Tunde Leye wrote an interesting post yesterday which touched on a subject I’ve been thinking a lot about lately: building a life in Nigeria or trying to do so elsewhere. This is a topic as old as the hills, but maybe we can say something new about it.

Why does anybody voluntarily try to move borders? Simple: For a chance at a better life. If you think about it, there are two options for improving one’s life:

  1. We can improve our lives in the country we are in. [The blow scatter option]
  2. We can move to another country where an improved life is likelier. [The emigrate option]

It is important to note the italicised words ‘chance’ and ‘likelier.’ There are few certainties in life. Implicit in (2) is the admission that (1) is less likely or achievable. A lot of people do not like this, they insist that they will blow scatter and that Nigeria is just the place to do so. I find the option to blow scatter problematic. If most people are saying ‘I go blow scatter,’ the consequence of this is that most people are actually saying: ‘We go all blow scatter.

Unfortunately, this cannot happen. Mathematically, we cannot all blow scatter. This admission is a struggle for many of us. Why? There is a solid body of research which shows that most of us are convinced that we are above-average, even though this is statistically impossible. Most of us make up the average. The blow scatter mentality is premised on an impossible world.

Let’s look at these two options in another way. The stylised graph below shows what a distribution of income looks like in many societies. The middle of the graph does not mean ‘middle class’ in the typical sense (i.e.: people earning a certain amount of money), it is the average. We’ll come back to this.

Ideas - 3

So, what do we have?

  • On the left are people who do not have a lot of income. (Red)
  • Towards the middle are most people in society (Yellow). This group of people earn the average income.
  • You have those with higher incomes still on the right. (Blue)

By definition, the average is a measure of central tendency, or the likeliest outcome. That jargony sentence simply means that if I had to pick the random person in Nigeria today, there is a good chance that his or her income will be near Nigeria’s average income. That is, he or she will fall into the Yellow portion. It also means that if you look out twenty years, the average Nigerian is likely to be earning the average Nigerian income, whatever that is by that time (the future Yellow). This is a consequence of what the average is.

Once you accept this, things become clearer. All you are concerned about is which average is likely to be better (option two). Do you want an average which allows you to pay tax, travel, enjoy 24-hr electricity and water and cheap high-quality education for the rest of your life? (High Income) Or do you want an average where you are worried about an emergency medical operation? (Low Income)

Going back to our graph of income distribution, here is what I mean by a choice between averages:

Ideas - 3

On the one hand, we have where we are now—Nigeria. Then there is the U.S. graph to the right of it (it could be any other developed economy). Notice that overall, their average is a higher level of ‘income.’ In other words, the average American is doing better.

And this is all there is to it: Emigrating is a chance at a better average. (Please note that the average is the likely state wherever you are. I am not making the fallacious argument that leaving Nigeria is a choice between having average income overseas and having exceptional wealth in Nigeria. That is nonsensical.)

But we have another problem, don’t we. In the same way that the strategy to blow is not a strategy for all Nigerians, emigrating cannot be either. We cannot all emigrate. So are we stuck? Not quite. Looked at individually, it seems to me that a person has a better shot at a great life in a better average than trying to work themselves out of their current average (which is a very difficult thing regardless of where you are). That’s an option for Tunde’s friend (and the one he’s taken) but not for all of us.

This is a stark truth. There is no easy way out for Nigerians collectively: We cannot all hammer and we cannot all emigrate. We have to fix the country. When we speak of improving Nigeria, what that means to me is moving the Nigerian graph to the right. It does not mean moving a few people from the Red to Blue portion of the existing graph. Economic development is simply a process of helping most of society ‘emigrate’ to a better life at home. It is not creating millionaires or billionaires. Our World In Data shows how this has worked over time. It shows that the world’s graph has progressively moved to the right; that on the whole, we are all better off now compared to a hundred years ago. We’ve moved the average, and that’s what Nigeria needs, a better average.

 


I should add a few thoughts which I was not able to incorporate into the body of the essay, but which are quite important nonetheless:

  1. Notice that I left the word ‘income’ in quotes; that was deliberate. It does not mean ‘money.’ It is things such as lower costs, expanded lifestyle options, better quality of life, freedom and so on. These all enhance our wellbeing but are non-monetary in nature. For instance, being able to walk into a public library that was founded by Benjamin Franklin in the 1700s is free. But, for people like me, it is a massive increase in my ‘income’ or my wellbeing. I also like trees. Being in a green space is free, but it enhances my ‘income.’ Stress may appear costless because there is no naira or kobo charge, but eventually, we will pay through some medical issue or the other. (This idea is a staple of economics) There are other non-monetary factors which enter into this conversation. Identity is important, and this could become an issue overseas. Xenophobia and racism are never far off. What of family? It is very difficult to leave one’s loved ones and emigrate, we deny ourselves the privilege of watching them (and they us) grow old. there is no money one could attach to that pain. In other words, there are many things which cannot be modelled in a spreadsheet which increase or decrease our wellbeing. A lot of us miss this when thinking about these decisions.
  2. To point out that most people will be in the average is not a predication for your life. In fact, I am hoping that I manage to escape the average myself. However, the disconcerting truth is that we must run as hard as we can to likely end up average. But what is life if not the ability to relish its complexities and contradictions?
  3. I am writing (and you may be reading) as someone who has had the advantage of privilege. The middle and below is an ugly place in Nigeria, most of our countrymen and countrywomen live a life of unimaginable hardship. Our concerns here are the privilege of the rich. This is not to criminalise wealth or to victimise the poor. It is an acknowledgement of the unfortunate status quo. The vast multitude of our people are more worried about a warm meal, a comfy bed, making it through this rainy season. If you have escaped this (by your effort or Fate’s design) be grateful, you have better problems.
  4. Apologies to the statisticians and/or economists who may object to some of the liberties I’ve taken. I deliberately tried to strip away most of technicalities associated with the curves and averages.
  5. @inpoco and @andyRoidO were generous with their time and helped me to bring this essay to life. I thank them. Obviously any errors or problems are mine alone.

 

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