The One Percent Almanack

Wit and Wisdom on Investing, Business, and Life

📚 The Psychology of Money

Have you heard of Kent Evans? No?

Okay, have you heard of Bill Gates? Yes?

Let me spill the beans here. Kent Evans was Bill Gates’ first best friend, his classmate at Lakeside School in Seattle, and a co-member of a school-sanctioned computer club called the Lakeside Programmers Group.

In the documentary Inside Bill’s Brain, Bill Gates described Kent as extremely clever, carrying a briefcase with all kinds of gadgets and magazines everywhere he went.

The two self-proclaimed geeks loved scheming about what they would be doing in the future, much to the eye rolls of their classmates who were more concerned with the activities of that moment, the upcoming school dance.

Together, they would read Fortune Magazine and imagine, “If you went into the civil service, what did you make? Should we go be CEOs? What kind of impact could you have? Should we go be generals? Should we go be ambassadors?”

Bill and Kent believed they would go on to do extraordinary things.

Just one of them did it. Bill Gates went on to start Microsoft and the rest, we know, is history.

What happened to Kent Evans?

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Behaviouronomics: The Semmelweis Reflex

Ignaz Semmelweis, a Hungarian medical doctor, lived during that time of the 19th century when the concept of germs had not been established yet.

In 1946, when he was appointed at a hospital in Vienna, many of the admitted mothers were dying of a mysterious illness. It was called puerperal fever or childbed fever and it was believed the cause of these deaths was ‘miasma’ or poisonous air.

On crunching data collected over a few months, Semmelweis figured that the mortality rate in the doctor’s ward was 10 percent and in the midwives’ clinic was 4 percent. This discrepancy was hard to ignore and led him to believe that the poisonous gas theory was bogus. He started looking out for differences between the doctors’ and the midwives’.
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Spotlight: Lindy Beyond Books – Part 2

This is the second episode of the series I started last month. The idea is to share with you those essays, articles, and speeches that pass the Lindy Filter.

Inventing on Principle

Bret Victor is an interface designer and computer scientist. In January 2012 he delivered a speech titled Inventing on Principle at CUSEC (Canadian University Software Engineering Conference).

It’s perhaps one of the most remarkable talks on design, creativity, and how one should decide the work which is worth doing. Bret spends an hour advocating for a career built not on a craft or a process, but guided by a principle. In the process, he explains his own guiding principle, looks at examples from history and lays out the case for discovering one’s own guiding principle.
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Behaviouronomics: The Goodhart’s Law

Gustav Heinrich Ralph von Koenigswald was a German-Dutch palaeontologist. His discoveries of hominid fossils in Java and his other studies in human fossil research made him the leading figures of 20th Century paleo-anthropology.

During one of his excavation trips to the Solo River at Ngandong, he thought of engaging the locals to assist him in finding the hominid bones. This move turned out to be one of the biggest tactical errors.

He decided to offer the locals 10 cents for every piece of hominid bone they could come up with. The scheme seemed to work until Koenigswald discovered that the locals had been enthusiastically smashing large pieces into small ones to maximize their income.

He failed to set the incentives thoughtfully and people optimized for maximum return on their efforts.
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Spotlight: Lindy Beyond Books – Part 1

A question to all the avid book readers —

Of all the newly released bestselling books you’ve read, how many of those are still in the bestseller list?

You don’t need to answer it. With this rhetorical question I want to draw your attention towards a fascinating phenomenon. Nassim Taleb calls it the Lindy Effect.

People have listened to Beethoven for two centuries, argues John Cook, “the Beatles for about four decades, and Beyoncé for about a decade. So we might expect Beyoncé to fade into obscurity a decade from now, the Beatles four decades from now, and Beethoven a couple centuries from now.”
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