Appreciating Convexity

The best thing about working life, it seems, is that it has given me a lot of time of my own. When I put down my work for the night and the weekends, I can explore, discover and pursue my interests. Strangely, it is when I sell my physical hours that I really gain free rein of my thoughts and the liberty to live in my mind. In contrast, schooling was always about filling my head with the thoughts I was supposed to have and knowledge I must remember. It was repressive despite the amount of “free time” I had.

Life has been good. I like my job because it gives me the autonomy to do what I think needs to be done, and choose how to do it, despite my junior position. Outside of work, I’ve been able to catch up on my book-reading, music-listening and movie-watching. I’ve even been able to pick up the piano again. I can take a walk outside whenever I felt like doing so, without feeling guilty about taking time away from some readings I’m not even remotely interested in.

Now, I have the liberty to reflect, to day dream and to read up on any nonsense that happen to pique my interest. Absolute time has less meaning. If I need to take a long time to finish a difficult book, so be it – I don’t need to find something straightforward to read just to feel the gratification of having completed a book. I watched Gone With The Wind in one continuous sitting. I’ve even survived the 7.5 hour extreme art house film Satantango. I  can listen to Eric Clapton’s extended 9 mins Wonderful Tonight 10 times a night, or to the full Brahms’ Symphony No. 4 twice in a row. On Saturday, I can practise the piano for 7 hours. On Sunday, I can spend an afternoon wandering around.

Instead of being told and assessed constantly about things I should/need to understand, I am learning to appreciate what I cannot yet understand. At work, I explain away convexity. After work, I embark on a search for non-linearity in life. That’s when I can fully enjoy the second, third, or even fourth order effects of spending my time.

A lot of my time is sold to my full-time work, but in my head I’m living more vivaciously than ever before.

Real Competition

Today, I learned of someone who deliberately went to a worse school despite qualifying for better ones just so that he could emerge top and win scholarships. After getting into a prestigious university overseas, he continued to enroll in courses he thought he could beat everyone else at. That was supposed to be the smart method.

A clever way to get the credentials, maybe. But where is the thrill in winning people obviously weaker than you?

I thought life is enjoyable only when you live and work with people smarter, more experienced and more knowledgeable than you. With people better than you as role models, you will be able to set a higher benchmark to better yourself with. Only when you realize that your best is not good enough, will you become better than your best. Besides, winning is fun only when you beat someone at least as good, if not better than you.

Although many things in life is relative, it is also relative depending on what you choose to compare yourself against. After all, just because you are smarter than idiots doesn’t make you smart.

Ultimately, what matters is giving yourself the opportunity to be better than yourself, not better than others.

Swimming blind

It’s amazing how being blind seems to immediately make you feel self-conscious.

I left my goggles at home while going for a swim. What spooked me the most wasn’t the crashing into walls and people, and not even that disturbing feeling that came with imagining chlorine eating away at my retinas (munch munch munch). What’s really freaky is this terrible feeling of being ignorant to what everyone else sees, something like me fumbling in the water, and generally everything that others can see while I can’t.

The inconvenience of being blind seems so small compared to this constant sense of insecurity, self-consciousness and helplessness. It’s almost as though, being blind is perfectly fine… so long as everyone else is too.

Studying for fun

“You see, if you have an education, you have many sources of pleasure and intellectual stimulation. Ways of using your time.”

- Burjor Randeria, in Paul Theroux’s Ghost Train to the Eastern Star

This is the perfect reason for working hard on learning – you learn so that you can have more fun!

Certainly, nothing can interest (or sustain your interest) unless you have sufficient knowledge on the subject to appreciate and enjoy it. Everything that you don’t know about or don’t understand is one less source of entertainment. An illiterate man is a bored one.

So, life is dull not because there aren’t sufficient forms of entertainment. You have no hobbies not because nothing interests you. If all you know about is your mundane life, then your life will certainly be mundane because you enjoy little more than unimaginative dramas about lives like yours.

Considering that dance escapes me, and that I have two right feet (which I argue to be worse than having two left feet), I’m missing out on the whole field of dance – all that elegant prancing and sensuous movement. Every language and culture that I do not know is one that prevents me from fully appreciating the nuances and witticisms of a film in that language.

Yet, this begs the question: breadth or depth? There seems to be a tradeoff between enjoying many things a bit and enjoying some things a lot. Now, even figuring out how to enjoy life sounds challenging. We have no excuse to be bored.

Of Decaying Time Value

“At age 16 or 17, I had wanted to be another Einstein; at 21, I would have been happy to be another Feynman; at 24, a future T.D. Lee would have sufficed. By 1976, sharing an office with other postdoctoral researchers at Oxford, I realized that I had reached the point where I merely envied the postdoc in the office next door because he had been invited to give a seminar in France. In much the same way, by a process options theorists call time decay, financial stock options lose their potential as they approach their expiration.”

- My Life as a Quant, by Emanuel Derman

That, is eerily and very unfortunately true.

Expressed in a different way, is how in Pixar’s movie Up, the pages for “Stuff I’m going to do” in Ellie’s adventure book were intentionally left empty and full of promise when she was a child, but were later filled in (probably when she approached death) with pictures from her wedding and snapshots from day-to-day activities. The movie romanticised her simple life, but it too made the point of how promises of grand adventure eventually degenerate to naught as we realize our mediocre, non-high performance lives.

About a month after tossing the mortarboard, I’m facing it too – I too am a stock option losing time value. I enter the working world as an enthusiastic fresh graduate, a greenhorn in the field but eager to discover and correct every imperfection in the current systems and operations. I dream about making radical contributions and going to graduate school. Yet I can’t help but see myself, in years to come, as another one of my jaded seniors, shunning responsibility, being contented with the status quo and seeking only to complete assigned tasks even if it means cutting corners. Maybe, I won’t make it to graduate school.

In the culture I was brought up in, envy was taught to be avoided like a vice, while contentedness is  wise. We were also taught to respect traditions and our seniors, and that humility is a well-liked virtue. Should I then, settle into a life of contentedness and simplicity, and abandon the exhilaration that comes with greater purposes and accomplishments? If the answer is no, how then do I go about seeking purpose and making a change?

What time is it?

I am currently reading Stephen Hawking’s A Brief History of Time, as part of my Accounting Theory readings. Ironically, it is the only Accounting Theory reading I care to read because it has practically zero relevance to Accounting Theory – that’s why it’s so darn interesting.

I had to put it down after 3 chapters because it has given me an immense headache, and I was dizzy with excitement, like a child who first learned that plants photosynthesize. Why, in Stephen Hawking’s name, didn’t any Physics teacher recommend this book to us? I would probably have done a Physics degree instead. It’s like, why didn’t I listen to Isaac Stern’s recordings of Mozart when I was learning music? Well, too late. Now I can only hope to find a book that explains Ito’s Lemma as clearly as Stephen Hawking discusses Einstein’s general theory of relativity. (Or maybe, I should aim to write one! )

I was reading in Coffee Bean. As I put down my book with a spinning head and looked around at people walking around in the commercialized man-made heaven, I began feeling extremely extremely small. I felt like an ant, no, smaller, like the bacteria that lives in the guts of an ant. And the expensive coffee I was sipping is merely digested bread crumbs.

Watching the mundaneness of people shopping around feels like watching ants shift bread crumbs. The humanities and social sciences (which I’m usually more inclined to read than the hard sciences) may be interesting, but now they seem little more significant than the most intricate organization of ant colonies.

Like humans as “higher beings” take little interest in the crumbling of ant hills, actually, who gives a damn if AIG and Citigroup fall? It’s like, minuscule in the greater scheme of things. However big, they are merely two of the many companies on Earth, and Earth is only one of the planets in the solar system, and the solar system is one of many in the galaxy, and Milky Way is just one of the many galaxies in the universe, and the observable universe is probably just a small part of god knows what. So yeah, AIG may fall, the economy may collapse, men may go into extinction after destroying Earth, but the universe will still exist, and it doesn’t even matter if the expanding universe eventually collapses on itself because man will most likely not live to see it happen.

While most people were fretting over World War One, Einstein published his theory of relativity and showed that there is no such thing as absolute time, which means identical clocks in different locations measure time differently! Then what does it mean to discount expected returns to obtain option price when no objective measure of time is possible? At seemingly the same point in time, my option price can be higher than yours! What time value of money?

Apparently, bodies like Earth aren’t actually moving in curved orbits. They are moving in straight lines in the four-dimensional space-time, but appear to be moving in curved lines in our three-dimensional view of the world because space-time is curved. That means light doesn’t actually appear to travel in a straight line in space. Now which science teacher made me memorize the fact that light always travels in a straight line? Oh yeah, the same one who told me Pluto’s a planet.

Conversely, of course, I can maintain my worldly belief that whatever happens to the universe doesn’t matter also precisely because man will never live to see its collapse (if it ever does). What’s of immediate concern to us, is of course whether or not we can cling onto the guts of the ant to prevent being passed out, not whether the ant hill crumbles. After all, if AIG does collapse, my world (as I know it) would probably end and it doesn’t matter anymore whether space-time is warped or not.

I enjoy books that screw with my mind.

What have I been doing?

I’m an idiot.

That’s the sobering fact I learnt today, after not being able to score 2 extremely easy papers. When you’ve been in QF for a while, you kind of take for granted that you’ll get killer papers, and that no one else can do them too. It’s also well known that the marginal benefit from studying is very little, because unless you have a flair for the math and do some hardcore studying (read: tear through many books written in greek and know theorems with strange names by heart), you’ll never get it. Especially not when there are other courses and other committments that are more urgent and where the results are immediate.

That’s why we always laugh at the impossible to comprehend notes and the insane amount of work that QF gives us. But when you can’t even do the simple questions, it’s not funny anymore. To add insult to injury, it’s an open book exam where I had the answer right in front of me, but when I attempted to do the question myself, I make spastic algebraic errors even a secondary school student shouldn’t be making – and I submitted them undiscovered.

What’s left for today is bitter disappointment. I disappointed both myself and the professor with high expectations for me. He’s a professor I really respect and whom I actually care to impress, but I only disappoint him again and again. That’s the problem with over-promising, I’d much rather stay low profile and do well in my own way.

Making stupid mistakes in exams may be a small thing, well, everyone does from time to time, and I don’t have the delusion that I won’t. But not being able to answer simple conceptual questions quickly and accurately feels terrible – how can I call myself a QF major if I don’t get my fundamentals right? (Actually, it applies to accounting too, except that I’m only an accountant by training, and don’t envision calling myself an accountant – ever.)

The past 2 terms have been a joke – I think I’ve just been muddling through. I really need to get my act together, quit wasting so much time watching TV and entertaining silly interests, and get down to grinding through the math and setting my finance fundamentals straight. I should learn programming proper too. I need to stick to my goal of getting a good masters in financial engineering, which means I need to get myself enrolled in one and get someone to sponser it. That also means I need to prepare myself for it and do well enough at work to deserve a scholarship.

My job in risk will be demanding, and the department’s ties with my professors mean I really cannot afford to screw up. And I don’t even want to settle for mediocrity, so I seriously need to buck up. When I’m left with just 2 accounting courses next week, there should be no excuse for not spending more time and effort on finance. 

Ironically, after the exams, I realize it’s time to hit the books.

Overheard

I discovered that common knowledge is not very common. Common sense is probably not very common as well, but I can accept that because sensibility requires some thinking to understand and make use of information. But considering the amount of trivia we’re bombarded with everyday, there just isn’t any excuse to be more ignorant than a 8-year-old if you are older than 8.

Therefore, I always thought shows like “Are you smarter than a fifth grader” are completely rigged – they made the contestants act dumb so that idiots will watch it to feel better about themselves and boost viewership and producers can rake in the moolah from advertisers. But now I think I have to reconsider that hypothesis, especially after I overheard a mother teach her daughter (probably around 8 years old) how to do her homework.

1. She raised doubts when her daughter told her wool comes from sheep.

2. She couldn’t correct her daughter when her daughter told her silk comes from wool.

3. She agreed with her daughter that sunflower translates to 太阳花, and told her daughter to write “太阳花的样子很像太阳” in her exercise book.

Sitting beside them, I was itching to help her with it, but that would have been the equivalent of giving the mother one tight slap and telling her in front of her kid how ignorant she is (even though she is).

Ignorance is scary, I should read more.

Living for June

Now that there are confirmed plans for after graduation, there is only anticipation. Life’s going to be good, but only when June comes. That’s when there will be change – a different environment, different responsibilities, opportunities, and also, finally being able to concentrate on a specific area of work instead of dealing with 7 while simultaneously entertaining the various silly interests of mine that surface from time to time.

And all the fun I’m going to have in Australia. That will come, I have to be patient.

Meanwhile, I’m in both accounting and finance hells. I wish I could understand Finance Theory better though, or at least be able to sit still long enough to try and understand it. It’s incredibly mind boggling, which makes it interesting, but not very fun when there are 5 other courses to do. As for Accounting Theory, well, maybe… not.

Leaving school and moving on to a new lifestyle will be good. It’s time to get out of this 17 years (!!!) of structured education drudgery which my mind is beginning to reject, showing signs of restlessness. At this point in time, I actually find being the lowest life form in the corporate food chain a strangely attractive prospect compared to being the boss of my own learning. Furthering studies? Most likely, but just not anytime too soon.

What if I regret?

This is a question many people like asking others to think about when they’re faced with major decisions. Often, it’s also the last (and lowest) form of resistance against someone’s decision you don’t like.

In any case, it is a question I hate to answer.

I hate this question because in the first place, it doesn’t even make sense. For every choice I make, there is an infinite number of choices I’m giving up, and therefore infinite number of situations in which I’ll regret, which then means that the probability of me regreting is 1 for any decision I make and therefore, I should never make up my mind!

Besides, it also implies that if I prefer not to do something now, I should still do it just in case I later regret not doing it. Can you imagine forcing yourself to go sky-diving when you’re terrified of heights just in case you develop a love for heights and regret passing out on an opportunity? That’s plain dumb, but many people do it anyway.

Regrets are overrated. I might as well do something I’d rather do now and risk the possibility of regreting it later. 

If I regret, so be it. I can live with some.