Occam’s Razor, Scuttlebutt and Lao Tze

From Wiki, Occam’s razor (also written as Ockham’s razor from William of Ockham (c. 1287 – 1347), and in Latin lex parsimoniae) is a principle of parsimony, economy, or succinctness used in problem-solving. It states that among competing hypotheses, the hypothesis with the fewest assumptions should be selected.

It means favouring simplicity over complexity although the subject may be complex. There is a study on horse racing betting that I read recently (forgot source and where), that shows how information affects professional punters’ betting accuracy and confidence level. As information doubles from 5 to 10, 20 and 40 (any relevant information used to forecast e.g. horse condition, recent performance, breed etc), accuracy dips slightly and there is no marked difference in the 4 studies. What increases is the punter’s confidence level.

Think about it for a second – in dealing with uncertainty, what do we often resort to? Scrambling for more information to analyse? (the opposite spectrum which is equally hilarious is to ignore any information at all – pure gut play). And higher confidence level is disastrous to accurate forecasting. For example, buying stocks based on economic forecasts (buy if condition is rosy and sell if otherwise) will almost certainly cause the public to buy at the top and sell at the bottom. However, the public’s confidence level will be at soaring high level.

Which brings us to our second topic, scuttlebutt. My loyal readers would be quick to point out that the topic has surfaced previously. (Click here for the post). We previously talked (click here for the post) about how observing unfinished cigarette butts on the floor is a better gauge of a country’s economy than anything else; when people feel prosperous, they will tend to smoke more and leave more unfinished cigarettes on the floor/bin. If you think that’s stupid, I’ll be glad to point out that bears hunting for salmons do the same thing. When salmons are abundant, they tend to bite off the tail area. (Which also leads me to believe that fish tail is the most delicious part of a fish). Another indicator of a country’s prosperity is this – how well behaved her citizens are on the road, especially over traffic lights.

What is a good predictor of marriage success? One interesting finding shows that observing the top 5 most prominent items in the couple’s living room does a better job at predicting marriage success. No, it’s not what the items are but whether the couple bought those items together.

Which brings us to the last topic, Lao Tze. (Lao Tze was a philosopher and poet of ancient China,  dated to around 6th century B.C. and reckoned to be a contemporary of Confucius, or even earlier). While I’m not really familiar with Tao Te Ching as much as I like to be, one of his quotes that is stuck in my head:

“Thirty spokes unite in one nave and on that which is non-existent [on the hole in the nave] depends the wheel’s utility. Clay is moulded into a vessel and on that which is non-existent [on its hollowness] depends the vessel’s utility. By cutting out doors and windows we build a house and on that which is non-existent [on the empty space within] depends the house’s utility. Therefore, existence renders actual but non-existence renders useful.” (By the way, you can read a collection of quotes that I find interesting here).

The beautiful quote basically means to always think about the space where a wheel rotates. We may often forget that the surrounding space is equally important to the functioning of a wheel. Which to me is the precursor to the scuttlebutt form of thinking in an Occam’s razor fashion.

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