Wednesday, July 12, 2006

Genius again

More on Galenson. "Experimental innovation" vs "Conceptual innovation".

Wired 14.07: What Kind of Genius Are You?

What he has found is that genius – whether in art or architecture or even business – is not the sole province of 17-year-old Picassos and 22-year-old Andreessens. Instead, it comes in two very different forms, embodied by two very different types of people. “Conceptual innovators,” as Galenson calls them, make bold, dramatic leaps in their disciplines. They do their breakthrough work when they are young. Think Edvard Munch, Herman Melville, and Orson Welles. They make the rest of us feel like also-rans. Then there’s a second character type, someone who’s just as significant but trudging by comparison. Galenson calls this group “experimental innovators.” Geniuses like Auguste Rodin, Mark Twain, and Alfred Hitchcock proceed by a lifetime of trial and error and thus do their important work much later in their careers. Galenson maintains that this duality – conceptualists are from Mars, experimentalists are from Venus – is the core of the creative process. And it applies to virtually every field of intellectual endeavor, from painters and poets to economists.

Monday, July 10, 2006

1660 fx derivatives

Pepys' Diary: Wednesday 1 July 1663: "but I hope we have this morning light on an expedient that will right all, that will answer their queries, and yet save Creed the 500l. which he did propose to make of the exchange abroad of the pieces of eight which he disbursed."

Creed has miscalculated the value of Spanish currency. The value of the pices of eight varies between 5 shillings and 4 shillings and sixpence. Much more here.

Monday, July 03, 2006

Real yields

The FT looks at the rise in real yields. Strong economic growth would certainly argue for higher real yields as a response to the demand for capital. However, this does not square with the recent sell off in emerging markets and commodities. / Markets - The Short View: Real yields still have room to grow:
"But real yields have also been rising. According to Ian Scott of Lehman Brothers, a weighted average of real yields in the US, France and the UK hit a low of 1.3 per cent in June last year and has now risen to 2.1 per cent. That still leaves real yields well below their heights during the dotcom boom when, on Scott’s calculations, they almost touched 4 per cent. "

Most likely the emerging and commodity sell off is just a deflation of a bubble.


Excellent article in the LA Times. Thanks to Paul Kedrosky for the pointer. The maths of luck in the film industry.

Meet Hollywood's Latest Genius - Los Angeles Times: "That's precisely how films behave in the marketplace. If we hear good things, we go and perhaps tell others; if we hear bad things, we stay away. It's that process—the way consumers learn from others about the expected quality of the product—that De Vany found is the key to the odd behavior of the film business today. Economists call it an 'information cascade.'"

The chaotic nature of the success of failure of a film means that the big starts and business leaders have runs of good luck and bad luck. The rest is an attempt to bring meaning to this statistical noise.

Clearly this could be taken further - dare I say it - even as far as the World Cup.