Business

Fed vs ECB Rate Hike; Big Data; The Talented Mr. Ripley

Fed vs ECB Rate Hike; Big Data; The Talented Mr. Ripley by Ben Hunt, Epsilon Theory – Salient Partners

The more I practice, the luckier I get. – Gary Player (b. 1935)

Luck is the residue of design. Branch Rickey (1881 – 1965)

I’ve found that you don’t need to wear a necktie if you can hit. – Ted Williams (1918 – 2002)

They say that nobody is perfect. Then they say that practice makes perfect. I wish they’d make up their minds. Wilt Chamberlain (1936 – 1999)

It took me 17 years to get 3,000 hits in baseball. I did it in one afternoon on the golf course. Hank Aaron (b. 1934)

Talent is cheaper than table salt. What separates the talented individual from the successful one is a lot of hard work. Stephen King (b. 1947)

At one time I thought the most important thing was talent. I think now that – the young man or the young woman must possess or teach himself, train himself, in infinite patience, which is to try and to try and to try until it comes right. He must train himself in ruthless intolerance. That is, to throw away anything that is false no matter how much he might love that page or that paragraph. The most important thing is insight, that is … curiosity to wonder, to mull, and to muse why it is that man does what he does. And if you have that, then I don’t think the talent makes much difference, whether you’ve got that or not. William Faulkner (1897 – 1962)

Talent is its own expectation, Jim: you either live up to it or it waves a hankie, receding forever. David Foster Wallace, “Infinite Jest” (1996)

What is most vile and despicable about money is that it even confers talent. And it will do so until the end of the world. Fyodor Dostoyevsky (1821 – 1881)

Talent is a long patience, and originality an effort of will and intense observation. Gustave Flaubert (1821 – 1880)

There is nothing more deceptive than an obvious fact. Arthur Conan Doyle, “The Boscombe Valley Mystery” (1891)

Sheriff Metzger: Mrs. Fletcher! Can I see you for a minute? [pause] Do me a favor, please, and tell me what goes on in this town!
Jessica Fletcher: I’m sorry, but …
Sheriff Metzger: I’ve been here one year, and this is my fifth murder. What is this, the death capital of Maine? On a per capita basis this place makes the South Bronx look like Sunny Brook farms!
Jessica Fletcher: But I assure you, Sheriff …
Sheriff Metzger: I mean, is that why Tupper quit? He couldn’t take it anymore? Somebody really should’ve warned me, Mrs. Fletcher. Now, perfect strangers coming to Cabot Cove to die? I mean look at this guy! You don’t know him, I don’t know him. He has no ID, we don’t know the first thing about this guy.

“Murder, She Wrote: Mirror, Mirror, on the Wall: Part 1” (1989)

Dr. Yen Lo: His brain has not only been washed, as they say … It has been dry cleaned. “The Manchurian Candidate” (1962)

Dickie Greenleaf: Everyone should have one talent. What’s yours?
Tom Ripley: Forging signatures, telling lies … impersonating practically anybody.
Dickie Greenleaf: That’s three. Nobody should have more than one talent.

“The Talented Mr. Ripley” (1999)

My singular talent is seeing patterns that others don’t. That’s not a boast, but a fact, and frankly it’s been as much a source of alienation in my life as a source of success. As my father was fond of saying, “You know, Ben, if you’re two steps ahead it’s like you’re one step behind.” I can’t explain how I see the patterns – they just emerge from the fog if I stare long enough. It’s always been that way for me, for as far back as I have memories, and whether I’m 5 years old or 50 years old I’m always left with the same realization: I only see the pattern when I start asking the right question, when I allow myself to be, as Faulkner said, “ruthlessly intolerant” of anything that proves false under patient and curious observation.

For example, I think the wrong question for anyone watching “Murder, She Wrote” is: whodunit? The right question is: how does Jessica Fletcher get away with murder this time? Once you recognize that it’s a Bayesian certainty that the woman is a serial killer, that she controls the narrative of Cabot Cove (both figuratively as a crime novelist and literally as a crime investigator) and thus the behavior of everyone around her, you will discover a new appreciation for both the subliminal drivers of the show’s popularity as well as the acting genius of Angela Lansbury. Seriously, go back and watch the original “Manchurian Candidate” and focus on Lansbury. She’s a revelation.

Or take the Masters tournament earlier this month. I was lucky enough to attend Wednesday’s practice round, and I was sitting in a shady spot on the 10th green watching the players come by and try their luck at 15 foot putts. At first, like the other spectators, my question was: how are they such good putters? This was “the obvious fact,” to quote Sherlock Holmes, and I watched for any clues that I could adopt for my laughable game – a forward tilt of the wrist, a stance adjustment … anything, really. We all watched carefully and we all dutifully oohed and aahed when the ball occasionally dropped in the cup. But suddenly, a new pattern emerged from the fog, and I realized that we were all asking the wrong question. Instead, I started to ask myself, why are they such poor putters?

Now I realize that I just alienated at least half of the reading audience, but bear with me. I’m not saying that professional golfers are poor putters compared to you or me. Of course not. They are miracle workers compared to you or me. But it’s a stationary ball with a green topography that never changes. The speed of the greens is measured multiple times a day to the nth degree. These players have practiced putting for thousands of hours. They have superior eyesight, amazing muscular self-awareness, and precision equipment. And yet … after charting about 50 putts in the 12 – 15 foot range, the pattern of failure was unmistakable. These professional golfers were aiming at a Point A, but they would have sunk exactly as many putts if the cup had actually been located 6 inches to the right. Or 6 inches to the left. Or 12 inches back. Or 12 inches forward. The fact that a putt actually went in the hole from a distance of 12 – 15 feet was essentially a random event within a 15 x 30 inch oval, with distressingly fat probabilistic tails outside that oval. This from the finest golf players in the world. I saw Ben Crenshaw, a historically great putter who was playing in something like his 44th Masters and probably knows the 10th green better than any other living person, miss a long putt by 6 feet.

But here’s the thing. When a player took a second putt from the same location, or even close to the same location, his accuracy increased