Case for Optimism

David Deutsche in his book “the beginning of infinity” talks about the similarities between a Russian roulette and future of civilization.

Russian roulette is random. We cannot predict the outcome, however, we do know what the possible outcomes are, and the probability of each, provided that the rules of the game are obeyed.

The future of civilization is unknowable, because the knowledge that is going to affect it has yet to be created. Hence the possible outcomes are not yet known, let alone their probabilities.

Thomas Malthus propounded in 1798, what’s known as the Malthusian theory of population.

He believed that while the growth in population is geometric (2, 2ˆ2, 2ˆ3…..), the growth in food production is arithmetic (2, 2+1, 3+1, 4+1…..).

Malthus then argued that because there will be a higher population than the availability of food, many people will die from the shortage of food.

He theorized that this correction would take place in the form of Positive Checks (or Natural Checks) and Preventative Checks. These checks would lead to the Malthusian catastrophe, which would bring the population level back to a ‘sustainable level.’

Based on Current Knowledge

What Malthus theorized was based existing trends and understanding of the existing technology of food production.

He had not envisaged how the food production and storage technology is going to evolved, catering to not just the current population but enabling storage for the future.

The Case for Optimism

When a prediction is made basis the facts as they exist currently and extrapolating them into future, what’s being missed is how humans have made progress overtime and conquered odds stacked heavily against the end of the civilization.

There are problems today and there will be problems in the future.

The black plague that struck humanity in 1353 lasted 7 years killing 75-200 million people.

It was caused by the bacterium Yersinia pestis.

Now we know that today and there are several medicines to treat it, however insufficient knowledge at that obviously caused a disaster.

75-200 Mn people died at a time when the global population was 475 Mn caused a drop of 20% in global population.

Compare that to Covid-19 for which vaccines* were attempted and administered in record time.

*Now there are debates about the efficacy of the vaccines, however the attempt above is to address how knowledge can become a weapon against epidemics and not to debate the efficacy of the vaccine.

What gives you optimism hence when you look at all the global problems today is that we are far more prepared and continuously improving our tools to face the future.

A Lesson for Money Management

Since last October when the markets peaked in India.

Lot of investors have seen their portfolios shrink.

It has been a shock to even experienced investors leave out the first times who had only experienced positive gains since they began.

I especially get concerned about investors in crypto for whom some investments have got completely wiped out.

The case for their optimism is here:

  • Experience always makes you better at almost everything provided you take the right lessons
  • Keeping a balanced portfolio is more important than maximizing returns
  • Returns in equities are never linear
  • Equity markets always reward you in the long run provided
    • You know what you are invested in
    • You keep evaluating why you invested in something and if that rationale has changed for better or worse
    • Re-balance the portfolio to keep it in steps with time, no theme in equity markets is same; Benchmark indices today are unrecognizable compared to the same benchmark 20 years ago
    • If you can’t stay in step with the markets, find a good advisor and lean on them to keep you stay the course

Here is the final thought from David Deutsche:

“Problems are inevitable because our knowledge will always be infinitely far from complete. Some problems are hard, but it is a mistake to confuse hard problems with problems unlikely to be solved”

Parts or Whole

An old saying tells us that “the whole is greater than the sum of its parts”. 

In scientific lingo it’s called “emergent properties” referring to properties that are completely unexpected.

These arise from a complex interaction of multiple parts which individually do not possess these properties but come up with the properties when thrown together.

Think about how insects like ants come together in groups and create complex structures like underground colonies or mounds that reach meters into air that even includes elaborate cooling ducts and heat dispersing fins.

A single ant is a limited organism, with little ability to reason or accomplish complex tasks. As a whole, however, an ant colony accomplishes astounding tasks, from building hills and dams to finding and moving huge amounts of food. 

Or creating a new specie by crossbreeding to find that the new species has properties that the original species don’t have individually.

In the human body, hands have a function, so do legs, eyes, and other parts.

These body parts are mechanical in their functioning, however when combined with the brain, they acquire properties that helps us express our emotions or protect us from a danger.

Understanding the WHOLE

From the lates 1970’s  accelerated in the 1980’s, Asian countries became manufacturing hubs and their contribution to the global supply chain went up many fold.

Rich Western countries with their just in time and six sigma practices looking to reduce cost for boosting shareholder value revelled in “cost arbitrage” shifting manufacturing from their countries to Asia.

This phenomenon had several positive outcomes not the least being higher productivity, lower cost and resultant lower global inflation.

The connectedness that it created across the globe resulted into a phenomenon called globalization.

Operating on their own each part would have struggled, however coming together they created prosperity.

Of course for years we only experiences the positives till the 2008 crisis, a great example where creation of Collateralized Securities rates AAA with junk underlying in 1 country engulfed the entire world into a recession.

Now if all the countries would have kept non-operating, the way they were, the impact would not have been that severe, however the inter-dependence caused a global recession.

Thinking & Executing the Whole

The ability to take these unconnected parts and understanding how they react to each other and create something unique is perhaps essential to investing.

  • What’s the business of the company?
  • What is it dependent upon?
  • What strength does it have?
  • What can impact it negatively? For example, can the war in Europe impact IT service companies’ business negatively in India
  • How’s a business trying to create an eco-system rather than doing what they have always been doing?
  • Is the strategy just some individual parts or do they have a meaning?
  • After all this is the price, I pay for the business aligned with all the above.

Creating a narrative is one part and alignment with things not visible or faint and the price you pay is another.

A company making commodity soda ash or fluorine might appear to have no advantage, however, combine that with what these commodities could do to an emerging need like EV batteries and what the companies are doing to complete that journey and the “WHOLE” becomes clearer.

There are no easy answers and developing yourself to understand complex systems is not everyone’s cup of tea.

However, this could be a yardstick to find a manager who can help you navigate complex systems.

Thanks for Reading

The Obvious

The myth of Hades and Persephone is associated with the coming of Spring and Winter: When Persephone comes to the Earth, it’s springtime. When she descends to Hades, it is winter.

Hades, God of Underworld kidnapped Persephone.

Persephone’s mother Demter, Goddess of Earth, negotiated her release on the condition that 6 months in a year Persephone will go and live with Hades.

So when Persephone goes to the underworld, as a result of Demeter’s sadness the earth experiences winter and when she comes out, we get spring.

As David Deutsche explains in his book “beginning of infinity”, if Greeks had known that the exact same time when they are experiencing winter, Australia is experiencing summers, they would have realized that there is something wrong with this myth.

The Quest for Explanation

As human beings we have a constant need for explanation.

Even if that means attributing the events to forces of nature or God.

There is a misconception that an explanation coming from an authority figure must be genuine.

However, most people out there have a pre-conceived notion and when that gets explained, it becomes their truth.

Recently a Wealth Advisor upon failure to explain the prevailing situation, made the following comment:

“If the Chairman of largest housing finance company is saying this, I would rather believe him”.

And I was supposed to be content with this explanation.

Just as in the case of Hades and Persphone, if the Greek had realized that earth is on the move and hence when one side is facing the sun, there is spring and when it moves to the other side, there is winter, similarly is daily life almost everything can be either tested for explanation of left to higher powers for explanation.

Testability

As David Deutsche explains, the reality is that there is no authoritative source of knowledge.

Even the best and most authoritative explanation leaves room for misconceptions and needs to be updated as new facts emerge.

History has lessons; however, the biggest lesson is that as things evolve, you might figure something that seemed obvious earlier as a mistaken understanding of what happens.

Testability is key to establish the truth.

However, testability is difficult in so many situation that are best understood in hindsight.

History is a compass not the destination

History teaches us important lessons.

However, each situation has its own unique uncertainties’ that you need to deal with.

And hence history is only directional and doesn’t really provide you the solution.

Think about Covid, the world just stopped.

Everyone who thought they had control, lost all of it.

As things settled and new narratives emerged, everyone jumped to the conclusion that 2020-30 will be the greatest decade ever as world gets into recovery mode.

And then came inflation, Central banks and the world that had got used to throwing money at every problem realized that this time they will have to take the money away.

Again, no one knows how to deal with this.

If past 15 years are a lesson, people have forgotten how to deal with a world with high inflation.

Only Doom and Gloom

Everyone is pessimistic.

The inflation, the war, the supply chain-each problem seems unsurmountable.

However, if there is one lesson that history teaches us and has been tested again and again, it is that human ingenuity and ability to find solution has no limit.

The other lesson that history teaches us is that the only solution to “high prices is higher prices”.

Demand destruction will happen overtime.

If demand is higher and supply is low, supplies adjust overtime.

As money supply reduces, Quantitative Easing becomes Quantitative tightening, some of factors driving inflation will start normalizing.

Whether recession will come or not, whether things will get worse before they become better are unknowns.

What we know is that the cycle always turns.

What to do?

If you are an investor, The idea is not to stop investing but to look for pockets that can sustain and survive this phase.

One thing that was not in your favor in the near past is now coming to your side and that is valuation.

It is difficult to be optimistic when everyone has turned pessimistic, however that is your only hope to turn back after this passes to assess whether you are sitting on ruins or you have created an architectural marvel.

Stay the Course

On the Occam’s Razor

It is easier to predict how people will react to a positive event vs. a negative event.

If you find a friend who’s crying, s/he has more likely gone through a negative event than a positive one.

One would often observe complicated interpretations of how others are behaving and feeling based on our own past experiences under similar circumstances.

These are what you would call a lay theory.

There are all kinds of lay theories with respect to race, personality, mind etc.,

Successful people who communicate clearly are for example, often seen as paragon of wisdom.

Similarly social background, color etc., is used to attribute behavior.

These are short-cuts that we apply because they are easier to use and understand.

The beauty of a lay theory is that you can use it in multiple ways-both to ascertain cause from effect and all the way from effect to cause.

Why are we talking about it?

There are conflicting signals all around us.

You see a friend crying and can fairly assume that the friend had a negative event but for all you know it was a pleasant one that overwhelmed the friend into crying.

Using short-cuts can often even send you in the direction of wrong conclusions.

Think about some statistics below

Record Goods & Service Tax collections in IndiaConsumer Inflation at 7.79%
Record overall tax collections in FY-22-25% more than estimates by the Govt. of IndiaWholesale inflation @ 15%-companies not being able to pass on cost to consumers
1st time in history India touched over 400 Bn USD in exportsCurrent Account deficit at multi-year high
Domestic air traffic up 59% YoY as fares rise 40%India unemployment at 7.83%
Home sales up 35% in FY-22Increasing interest rates might dampen home sales in FY-23

These are conflicting signals.

Are we doing better or are getting worse?

The Occam’s razor

The Occam’s razor also known as the law of economy tells one to go for the simpler explanation.

For example-Did I get a tire puncture because of a mail or did someone slash the tire.

The simpler and probably, the right explanation, majority of times is that a nail caused the puncture.

When you go with the slash explanation, you are making too many assumptions.

You can always investigate more, however the simpler explanation is more likely the correct one.

Now when you look at the above table, there is somethings that have happened in the near past and then there are others that will probably impact how things shape up in the upcoming future.

You are more likely leaning towards a tough time ahead if you consider the twin impact of, inflation that is high and as per the Reserve Bank of India will remain above their range for most of part of the financial year, along with the rise in interest rates that’s going to hit the crucial middle class consumption in a high unemployment environment.

That simply speaking is more likely scenario that the positive one.

How to Deal with it?

This is what Jeff Bezos said when Amazon stock price feel to $6 during the dotome bubble burst:

“I had all the internal metrics on how many customers we had and I could see,” he said at the forum. “People thought we were losing money…. I just knew it was a fixed cost business, and as soon as we reached a sufficient scale, we would have a very good business.”

Knowing this concept, according to Bezos, was what kept him calm during the ups and downs.

“That understanding of the fixed nature of our expenses, relative to physical retail, is what led us to have the ‘get big fast’ strategy. We knew that our economics would be improved if we had sufficient scale,” he said.

Whether a recession comes tomorrow or not, you would keep going to work, keep giving your best to what you do.

You would have your family around you.

Good businesses will continue to invest in their businesses and prepare for the future.

However, your patience will be tested, and you will at times need nerves of steel.

But remember when all of this has passed and things are again bright, you will feel good that you didn’t lose the way.

No amount of regret will help if you freeze right now, thinking about the current damage instead of focusing on how to create a better tomorrow.

So, Stay the Course-

That Went Right-Right?

When Jack Welch took over as CEO of GE in 1981, it was a large organization with almost monopolistic status in various businesses that it operated in.

The company had a soft culture that was dominated by a numbers approach.

Jack transformed the company with his 3-pronged approach:

  • Be number 1 or 2 or exit
  • Boundaryless behavior-make decision fast overcoming the bureaucracy
  • Rank or Yank-eliminate 10% of the bottom performers every year

The focus was to squeeze out every bit of productivity from the available resources-people, plants etc., etc., to create a more profitable venture.

He laid off people, shut down businesses where he couldn’t be number 1 or 2 creating a large, highly successful organization in the bargain. GE’s market cap went from 12Bn USD to 410Bn USD during his tenure.

The downside was that he created a place where everyone was looking behind their back.

Fear of getting fired was high.

The workout consultants leading the boundary-less organization initiative became the secret police.

Manager of the Century

Dubbed the “manager of the Century”, he created a roster of Managers under him who went on the lead leading organisations like Home Depot and Boeing.

His proteges fanning across organisations tried to create the same culture to boost profits.

One prime example is what a series of Ex-GE executives did at Boeing.

While initially all the cost saving programs led to profitability going up from USD 23Bn to USD 54Bn within 7 years, eventually it unfolded.

When Airbus-320 was crushing Boeing 737, the ideal response was to create a competitive plane, another one of its “moonshots” that Boeing was known for, instead Jim McNerney went for re-imagining the 737 by creating 737 Max.

While it saved 17-18Bn USD in development cost, the resultant product was a disaster leading to series of crashes, loss of lives and eventual loss of reputation and money (150Bn USD).

Culture is a Vulture?

When outcome becomes the proof of success and failure in the short run, this is what happens.

You define objective, let’s say maximisation.

You can achieve this the hard way by creating products and services that people will buy, create a scale, and operate at it successfully.

Or you can focus on creating efficiencies by cutting down on people, processes, time and create a culture that hustles through everything.

The first way requires imagining moonshots, planning for it, creating, and executing it and having the patience to see it through.

2nd one creates unintended consequences.

Look at all the Just in time processes.

They worked till they contributed to the supply chain crisis of the pandemic.

Everyone was working at the edge of their resources when suddenly it all became too thin and the entire chain dependent on these processes stalled.

Now, don’t get me wrong, even the 1st way can fail, however at-least the attempt is more positive in nature. Its additive and not subtractive.

Patience, understanding, big picture

Whether it’s running a business, your own life or finances, the key is to have the right objectives and strategy that helps you achieve what you are gunning for.

Short-term success can make people believe that they are experts, and the delusion can las t so long that the impact of failure is larger than what anyone imagines or expects.

Watching paint dry is not for everyone, however, often, it’s the most important skill that might need to develop for your own good.

Thanks for reading

The Road Well Travelled

Charles Lindbergh, the first person in the world to fly non-stop from America to France, made an excellent and highly accurate assessment of German Airforce capabilities.

His forecast that Germans possess 2400 planes has since been validated by other historians.

US intelligence later estimated Germans to possess 6000 airplanes.

However, what they overlooked was how chronic fuel shortage and other resources rendered most of this fire-power useless.

However, this forecast was enough to convince American Ambassador to UK that British were in no position to face the Germans and would surely leave.

This started his isolationist stand and efforts that went against his own President’s efforts to keep America out of the war.

His career once destined towards the White House was cut-short due to this misstep on his part.

Sense-Making

Once people find a narrative/a situation/an outcome, that appeals to them, they often stop the process to dive deep and make enough sense of the situation to take the right course.

Take Covid-19 for example, when covid arrived, there was no playbook for investors.

Initially everyone panicked and markets sold-off big.

They Govt’s across came with stimulus.

Then everyone saw pattern of consumption which was different from normal.

WFH was new way of working.

Stay at home and organizing your life around it was different.

This created possibilities for new type of consumption patterns and providers.

Covid phase- 1, 2, 3 and for some 4 & 5 made people forget what the old normal was.

There was stimulus money and comfort of home that created new needs.

Demand started to flow.

As there was money homes and cars, when car supply fell short, used cars, everything started flying off the shelf.

People paid any price that was quoted.

This cause higher demand.

Supply started to fall short as key manufacturing centers were in grip of covid.

These manufacturing centers in Asia developed to address over decades to increase efficiency, lower costs.

With supply chain out of control, high demand, commodities went up.

Price pressures started to build.

Lots of people decided to just stop working leading to labor shortage that led to higher wages.

The 2nd order effect of wage inflation caused an inflation spiral which initially got discounted.

This led to the inflation cancer growing in the body.

And then the war came.

20/20

Hindsight is perfect for all of us.

However how many of us understood the issues and tried to make sense.

Very few or maybe none.

Everyone thought covid has created another bull run that will last a decade.

Then the stocks crashed.

Everyone who started investing in the last 2 years and thought s/he were a genius was grappling for answers.

Now, you see how sense-making is difficult but necessary.

There are no perfect answers.

The above write-up is also hindsight.

However, if there is one answer from the whole experience, it is to stop, step back and instead of being swayed try to think rationally and in scenarios.

Whether covid-19 memories remain with you or not, the lessons are invaluable for life and I hope this one particular lesson you can carry with you for every future crisis.

Thanks for Reading

I Know……

I know that just because an event has happened thrice in a row doesn’t mean it will not happen a 4th time or that it is bound to happen for a 4th time, but I still get seduced by the idea that there is a pattern here.

Just because roulette wheel has landed on red thrice in a row, there is no guarantee that it will happen again or that it has happened enough times and will not happen again.

The wheel has no memory.

I know that I am my own enemy.

I deserve what I get and get what I deserve.

Its, my efforts, behavior and results that matter.

However, I still let myself be stopped from achieving by acting to the contrary.

I know that pain and pleasure are transient and occur as my consciousness reacts to an external stimulus, however I often confuse this pain and pleasure to the quality of our life.

Markets go up (pleasure), markets go down (pain)-result stress.

A life well lived and balanced by the pain and pleasure is true happiness.

A grandfather talking to his young grandson tells the boy he has two wolves inside of him, struggling with each other.

The first is the wolf of peace, love, and kindness. The other is the wolf of fear, greed, and hatred.

“Which wolf will win, grandfather?” asks the young boy. “Whichever one you feed” is the reply.

I know that if my vehicle hits another, both get damaged. However, when ego dictates driving, I forget it.

Ego and emotions have no role in good decision making, however I let my fear, greed, anger, jealousy get an upper hand damaging my own interests.

I know that 90% of my success comes from the homework that I do as that’s what sets me up for success.

What I do in the field is just the outcome of all that homework.

I know that opportunities when seized have a multiplier effect, however I let them go waste because of my inability to adapt to the situation and seizing the momentum.

I know that you do not need unlimited resources to win, just as the 5 musical notes have helped create all the music we know, the resources we have can be mobilized effectively to win what we need to.

I know that suffering is an opportunity to build strength-what doesn’t kill me, makes me stronger, however I still am not able to take the risk.

The fear of failure overpowers the competence and stops me from taking the step that can me stronger.

I know that hope is not a strategy unless it’s based on what’s possible and not merely on illusions or delusions.

Optimists solve problems that a pessimist can’t.

I know that excellence is not an accident.

Hard work, perseverance, patience, all lead to excellence and all of that is a choice and not a chance.

If you know neither the enemy nor yourself, you will succumb in every battle

  • Sun Tzu

Not knowing is liability that can be overcome because ultimately you need to know before you take a decision to do anything.

Knowing that you don’t know is a good start

Happy Reading

Trading

Memories have a bad reputation for not being the best record-keeper of what happened.

As we experienced the worst of 2020 and 2021, we missed things that we otherwise didn’t even think much about or took for granted.

Whether it’s the office gossip, the daily commute, the hustle/bustle of normal regular working day compared to WFH.

What happened in the past gets scattered in our brain in bits and pieces that we remember.

It’s like a researcher getting a story write by joining the various parts or like bringing together pieces of a jigsaw puzzle.

Shades of Grey

Negative memories often fade away more quickly than the positive ones.

Or maybe it’s our coping mechanism to stay positive.

People in a driving accident fear driving for a while and get cautious, however within no time their confidence comes back, and they forget what caused the accident in the first place.

On the other hand, there is that chai/coffee shop from our college days that we reminisce about even after 20 years that evokes positive memories.

So, its but obvious that the chai/coffee shop/college canteens bring back positive memories that we want to remember and on the other hand an accident has painful memories that we wish to forget.

Short Memory

Our current lens acts as the filter to our world view.

If you are in the middle of a deadly pandemic, of-course you bring back positive nostalgia that helps you overcome some of the pain of the isolation.

The positive memories help us trade our pain for something that we feel good about or look forward to.

Manipulated Memories

The sequence of event the way they happened, and the way recall might have a link which might have manipulated the details that we don’t like.

This is most evident when people write autobiographies.

Some of the most famous and accomplished people in the world had complex lives (like most of us), however if you read their autobiographies, you will come inspired from their stories.

One is their writing skills and 2nd is what they choose to tell you about themselves.

Trading

You know the truth about yourself and what’s your story is.

That’s an assumption we make about people when we are not convinced about what they tell us.

However, it is possible that their mental model has convinced them to believe in a particular narrative about themselves and that’s what they are convinced about now.

I know hordes of investors that read Benjamin Graham and warren Buffett during the pandemic and figured that they now understand how the markets work.

They picked up theories like “Fundamental analysis” and “Good business”.

Their balloon got busted by the recent downtrend in the markets with some of those smart stories turning sour

Now whether they want to waste this accident and revel in the great show that 2020 and 21 were or wish to learn something from this purely depends upon what they think stand for.

End of the day whatever you believe you are will be tested by the reality of the day and tough times will showcase the real man in the mirror.

Happy Reading

Wedding Planner

As per a report published by KPMG, India’s current wedding market is estimated at $50 billion, accompanied by a rapid annual growth rate. Thereby, making it one of the biggest contributors to the travel and hospitality industries. 

Since times immemorial, when a wedding was scheduled to take place, the entire village would come together, lend a helping hand and ensure all preparations were nothing short of perfect.

Today’s millennial couples take the onus of organising, planning and budgeting for their own wedding, as opposed to families being the key decision makers previously. 

At its core, the wedding industry is driven by cultures, traditions, and the union of 2 families.

From traditional weddings to destination and theme based wedding with the hoopla of social media, weddings in India have evolved over time.

From a simple wedding that might cost INR 10Lakh for a middle class Indian family to a destination wedding that might cost in crores, families and couples spend huge energy on getting the perfect wedding.

Panning starts the day wedding date is finalised and reaches a crescendo in terms of preparation and the stress involved as it gets closer to the D-day.

Getting the perfect dress to the perfect venue/destination, the perfect gifts and planning the itineraries for the guest keeping in mind the sensitivities of each relationship, families and couples stress themselves out over each details.

The big fat Indian wedding is a popular phenomenon around the world but the amount of effort that goes behind it is unimaginable.

What’s next?

Whether it’s a simple wedding or a complex big fat one, real life starts the day the wedding gets over.

Whichever way someone married, in a court or in a temple, at home or at a destination means nothing to what the life would be once they are married.

A marriage is at the end of the day a relationship and it requires all the hard work that a relationship requires to make it work.

Understanding each other, the families, the friends.

Understanding how each individual likes to live when the façade of the wedding planning is over and real life starts.

What are their preferences, what are your preferences?

Kind of things one wants to do, how will you react when the partner doesn’t want what you want.

Yes, that’s true lot of hard work.

It’s probably 100 of times more work than you put in planning the wedding.

The astonishing fact is that divorce rates have doubled in India over the last 2 decades.

Not a statistic that we can be proud of.

However, the millennial, YOLO generation doesn’t believe in living with pain.

They believe in surgery.

More time Planning the wedding than the marriage

Wedding is the event while marriage is life.

If people would spend as much time (as a proportion) as they spend in planning a wedding in planning the marriage, it would not perhaps end in unhappiness.

Life is not as simple as deleting an app or unsubscribing a streaming service.

It requires effort.

This is perhaps true for every aspect of life.

You can either sleep walk through life or make an effort to excel at it.

The difference between excellence and just being there is starkly visible to us all around.

When people question success and why so few people are successful, they think about luck, timing, privilege but forget about the hard work that goes into it.

This exactly is what you require in investing.

Got money, start investing.

Simple-not really.

Getting started needs understanding, your objectives, goals, risk, your reacting to risk and the exit plan.

What would keep you awake and how to reduce that stress.

What do you pay for and what do you do yourself?

These are questions that are about discovering yourself as much as understanding where and how you want to invest.

And just like a marriage can’t be successful without putting in the work, so can’t investing.

The bad news, everything is work.

Good news, its’ worth putting in the work or paying for it.

Happy Reading

Odometer

Ever wondered why do highways use 1/4 mile increments when car odometers only supply tenths?

At 60 miles an hour, that is about a mile a minute.

At that speed, if a signs were posted at each tenth of a mile, you’d be seeing a sign once every six seconds. On the highway, such frequency and accuracy are unnecessary, in addition to serving no practical purpose. It’s like closely monitoring the second hand on your watch.

I think it’s a “rule of thumb” type thing. How many people compare their odometers to the road signs for precision.

“Alright. It says 3/10 of a mile … wait a tick! What’s that?

My odometer says 5/12 of a mile!!

The point of road signs is to basically say, “Hey, you there! There’s this thing ahead. Pay attention.” And, “Hey, I said this once, I’m saying it one last time, there’s this thing ahead. Pay attention!”

Also If you crash, they use those markers to know where you are on the interstate. You should be exact as you can when telling (the emergency line that you called) your location. They need to know where you are in order to send an emergency vehicle out to you.

Also, yeah. You can tell how close you are to the next exit.

They are not useless, they can be lifesaving.

Does everything need to be logical?

Maybe/maybe not, however it is useful to think logically about everything.

It’s like Plato thought, if it has happened, it must be real, while Aristotle wanted everything to be proven for him to believe it.

The key here is some people look for a logical explanation and evidence before making up their mind while for others it is just another happening that they don’t need to worry about.

Usually people have too many challenges then to think about-

Why sun rises in the east, why the sky is blue etc., etc.,.

While there are others who have devoted their lives to answering such questions.

How Does it Concern me?

Not everything concerns, excites you, draws or even deserves your attention.

However, if you are expected to or want to achieve/deliver/do something, not knowing the logic doesn’t help.

Ultimately, almost all of us can conjecture about reasons for something, however having evidence improves the outcome and our understanding of it.

For example in investing, you don’t have to check the markets (odometer), every 6 seconds, in-fact not checking the odometer at all for long intervals, might help you even more.

However, knowing:

  • Where you are headed?
  • The distance and the direction?
  • The risk and the rewards?
  • As also when to look at the odometer and defining a logic for the same can help successfully navigate the journey.

So while you might not have a need to understand the logic of everything that happens around you, thinking about almost everything you do around developing the competence to navigate the journey in a logical manner might help.

Thanks for Reading