Multi-Disciplinary Reading - Book Reviews

[phreakv6]

What do you care what other people think?, Richard Feynman, 1988 - Sort of a follow-up to Surely, you’re joking Mr. Feynman, this on similar lines, is a auto-biography collection of shorts. Unlike the earlier book though, bulk of this book is the title chapter, which covers his life with his first wife Arlene. This oozed so much warmth and humanity and showed the side of Feynman from early days in his first marriage.

There are some letters written to, from and about (post death) Feynman which also find their place in the book. I liked how different times were when people would pick a paper and pen and write a letter so frequently when traveling. The rest of the book is on the Challenger disaster and brings out how sharp he was so late in life even as he was terminally ill with Cancer. It reminded me of triaging problems by asking a zillion questions and narrowing down to possible / probable causes.

The smart, witty, humble side of Feynman comes out often in these pieces, especially in his Japanese trips where he would insist he stay in traditional hotels and cause himself a world of trouble just to experience authenticity. His letters from Brussels, Warsaw and Athens to his wife are also a fun read, with his interesting observations of the mundane, of people, places and his food, or his waiting for it. The Challenger investigation is covered in very good detail and forms almost half of the book, so unless you are scientifically minded, Surely, you are joking Mr. Feynman is definitely a better book. If you love Feynman like me, then you are bound to love this, especially first piece on “What do you care what other people think?” which alone is worth buying this book for. 7/10

[rajguleria]

Hello Phreakv6 , do you have any recommendations on anything you have read of Nobel Laureate Harry M. Markowitz who died last week , heard his dissertation, “Portfolio Selection,” overturned this common sense approach utill then ( 1952) on portfolio selection & came to be known as modern portfolio theory , was wondering if there is anything I can get my hands on something to read more about him and his work ?

[Chandragupta]

Big Bull Rakesh Jhunjhunwala died at the age of 62, but Warren Buffet is still compounding his wealth at 92. Charlie Munger is 99, and can still spend hours answering investor’s questions at the AGM. It is said that 97 % of Warren Buffet’s current net worth has been earned after the age of 60. It would seem as if when Jhunjhunwala’s investment career was coming to an end, Buffet’s was just beginning.

In Outlive, Dr. Peter Attia takes a deep, hard look at what he calls the science and art of longevity. The author, a doctor and surgeon by profession, quit his medical practice out of disappointment with modern day science and started a practice where he focuses on showing his clients a path to a healthy and long life. The author believes modern day science suffers from severe shortcomings in the way it approaches health, and suggests an alternative approach (that he calls Medicine 3.0) that focuses on prevention rather than cure.

To be sure, the lifespans of humans have increased significantly over the last two hundred years, thanks to advancements in medical science. But most of these successes have been achieved by conquering “fast death” – prevention or cure of infectious diseases of various kinds, treatments of injuries, emergency care of accident victims or responses to natural calamities and so on. We have learnt to fix broken bones, wipe out infections, replace damaged organs and decompress serious spine and brain injuries.

But we are markedly less successful in helping patients with chronic conditions. All these issues are caused by metabolic dysfunction, primarily due to a mismatch between our genetic evolution and modern-day lifestyle. Face it - most of us are going to die of what the author calls The Four Horsemen (from the biblical Four Horsemen of Apocalypse) – Type 2 diabetes, heart disease, Cancer, or Alzheimer’s (or some variants & combinations of these). This is “slow death” – where medical intervention happens too late in the day, and the treatment is symptomatic, without addressing the root cause. While Fast Death diseases can be cured totally and patient’s condition restored back to where it was before the disease took hold, Slow Death treatment has just one goal today – to stop the patient from dying. The patient never goes back to Being Healthy again. Most of our final years of life – “The Marginal Decade” – will be just spent battling one or more of these Four Horsemen.

In comes Medicine 3.0 – which focuses on the two components of Longevity viz., Lifespan i.e., how long you live, and Healthspan i.e., how well you live.

It is an approach that places far greater emphasis on prevention rather than treatment. It considers patient as a unique individual and offers solutions that suit his own specific case. There is no one-size-fits-all formula here, but an advice on how to look at your own individual risk of contracting these ailments and how to prevent them. The author says his goal is to present an actionable operating manual with which, you can potentially increase your lifespan by a decade and healthspan by two. It would be ideal if not only the lifespan is long, but if lifespan & healthspan perfectly overlap. That is what we should be aiming for.

After this introduction, the book then takes a deep dive into the inner workings of each of the Four Horsemen. How and when do they begin? What forces drive them? How are they sustained – and how can they be delayed or prevented? This part is pure science, and the book goes deep into the molecular biology behind each disease. I found this fascinating, despite the text becoming a bit technical at times. To an extent, this is inevitable given the nature of the topic, and it goes to the credit of the author that he has tried to make the subject as easy as possible for the layman to understand, without either losing the scientific angle or making the content too superficial. One can easily get the drift of what is being said, even if not being able to follow every word literally.

Having analysed the four slow killers in-depth, the next part of the book focuses on Solutions.

It starts with a study of Aging itself, which I found very interesting. What exactly does aging means? What happens when we age (grow)? Can the process be slowed down, and how? I had never thought of this before.

As we grow older, the deterioration in healthspan occurs along three vectors – cognitive deterioration, physical deterioration, and emotional deterioration. Medicine 3.0 tackles this through five broad domains – exercise, nutrition, sleep, emotional health, and medication. The book then discusses each of these topics (except medication) in considerable detail. For example, what are different types of exercise, and why do they work? What happens when we sleep and why is sleeping well so important? Is there such a thing as a perfect diet? The book doesn’t simply prescribe solutions (for example, take this diet or do that exercise) but explains the science behind everything and lets the reader decide what is best for her.

The book busts many myths and misunderstandings surrounding all issues Health. Surely, the book will inspire you to do more for your health. At times, it can also scare the hell out you, as you realize how you are going to die! There are plenty of references to latest research in medicine and molecular biology, information about recent and even ongoing clinical trials, survey findings and everything in between. This is a science book (NOT a self-improvement book) written for the layman. Even for those who studied medicine a few years ago, the book is wonderful update on the latest happenings in their field.

When Rakesh Jhunjhunwala was asked what - if anything, he would have done differently if the clock was turned back by a few years and given the benefit of hindsight, he is on record saying he would have paid more attention to his health. Clearly, in the formula P * (1 + r / 100) ^ n, while Jhunjhunwala was focused on r, Buffet showed n is more important than r.

As I finished reading the book, my mind kept going back to my father-in-law, a healthy man of 75 who had no ailments, never went to a doctor, and took no medicines. Late one evening four years ago, he took his dinner as usual, went to bed and never woke up. To use the language I learnt in the book, his healthspan perfectly overlapped with his lifespan. Blessed are the people who die like this. This is the blessing the book is trying to give you. Take it.

[abhimanyu_gupta]

I just finished reading this book. Really enjoyed it to the core. Thank you for this recommendation

[phreakv6]

The Dorito Effect, Mark Schatzker, 2015 - I thought this book was about the junk food industry going by the title. I was expecting a one-dimensional bashing but was taken aback by the nuances of the complex ecosystem that has evolved in the last 70 odd years. As we optimised to feed the 7 billion mouths by improving yields, we have optimised for tons and time with genetic seeds and breeding, fertilisers and feed but have sacrificed flavour, which stands for real nutrition.

To compensate for the loss of flavour we douse our food in sauces and dips, herbs and spices and flavouring agents. The disconnect we have thus caused between flavour and nutrition has caused cognitive and emotional deception and our bodies seek the missing minerals, vitamins and plant compounds by consuming more of food rich in salt, fat and sugars without ever being sated nutritionally, even as the engineered flavours have caused a food addiction pandemic causing average weights to soar every decade.

My notes -

• People that try to lose weight through diet generally gain it back and some (“The obesity code” book made the same point)

• Weight watchers - started like AA (Alcoholics Anonymous that works on collective willpower than the individual addict’s) for the obese (ironically was sold to Heinz)

• 1960 - 13.4% of Americans were obese. 14.5% in the 70s. 30% by late 90s. Today 69% are either overweight or obese. The British, Chinese, French are all gaining - its a pandemic

• Weight increases risk of asthma, cancer, heart attack, stroke, reduced fertility, premature births, high BP, sleep apnea, liver disease, diabetes and arthritis (and depression). Obesity is surging past smoking, drinking and poverty in morbidity

• Between ‘89 and ‘12, Americans spent over $1 trillion weight loss - during same period obesity grew 50% and extreme obesity doubled

• Adult-onset diabetes is now called type-2 diabetes since even Children were getting it

• As natural reductionists, we have blamed obesity on sugar, unsaturated fats, saturated fats (before that), carbs, sugar (its a cycle) and technical jargon like glycemic load, protein ratios and serum triglycerides. There’s no single cause, so there cant be a silver-bullet solution

• Smoking causes cancer - that the “how”. The “why” is because smoking is an addiction. Similarly, we keep looking at the “how” for obesity without wondering about the “why” - because we are not able to resist food

• Food and flavour decoupled when Frito-lay invented the Doritos - tortilla chips that tasted like tacos, had an engineered crunch and an irresistible combination of salt, fat and flavour

• 1960s made great leaps in flavour technology - barbecue flavour in chips, soft-drinks in oranges, grapes and lemons - none of which were natural. Fruits, grains, meat, vegetables were themselves losing flavour at the same time

• Food was getting blander because of increase in yields - be it corn or chicken. Capitalism was optimising for yields through fertilisers and feed and not flavour. To compensate, we crank our zestiness by the ton in flavour

• Nothing tastes like what it is, everything tastes like what we want it to taste like

• Eating has as much to do with nutrition as sex does with procreation (Eating for taste and not hunger)

• If music is emotion expressed through medium of sound, flavour is emotion expressed through food

• Our flavour-sensing system is being fooled, having not evolved in the last few decades. The food crisis is thus a large-scale favour disorder

• Chicken of tomorrow contest - contest that ran from 1948 to create chicken that grew fastest and looked like a wax model provided. Scored on uniformity of size, quality of skin, length, depth and width of breast, hatchability, feed efficiency and avg. weight (not flavor)

• 1923 chicken weighed 2.2 pounds in 16 weeks. ‘33 it was 2.7 pounds in 14 weeks. ‘43 it was 3 pounds in 12 weeks. ‘73 it was down to 8.5 weeks! Chicken of today does it in 5 weeks (Fed a standard calibrated diet in a dark pen and not allowed to waste energy venturing out - capitalism at its finest)

• If humans grew as fast as broilers, a 3 kg new born baby would weigh 300 kg after 2 months

• Julia Child noticed the flavour missing in chicken back in the 60s 13 yrs after the chicken of tomorrow contest but very little was done then and since. Her recipes often recommended very mild flavouring of butter for chicken (Julia & Julia with Streep is a fab movie)

• Fruits & vegetables grown in 1930s vs 80s - rhubarb, bananas, parsnips had fewer essential micronutrients - calcium down 19%, iron down 22% and potassium down 14% (plumper, juicier produce but also diluted)

• Broccoli, wheat and corn had changed due to careful breeding to grow faster and bigger (improved yields). Breeding, fertilising and spraying was diluting nutrients, just like broiler chicken. Quantity has come at a significant loss to quality (nutrients lost, replaced by carbs and water)

• Tomato that ripens in the truck or a warehouse doesn’t taste as good as the tomato that ripens on the vine (when engineered to ripen late)

• Tomatos have been bred to have thick skin, be disease resistant, have better yield, look luscious and uniformly red but the genes that determine good flavour have been lost (substituted by ranch dressing)

• 12 ft tomato plant would carry 4 or 5 ripe tomatoes in the 40s. Today at 6 ft., they carry 10 ripe tomatoes - since they are source limited, they stuff the fruit with water

• Blandness in chicken, fruits and vegetables is intimately linked with nutrition (flavour is a signal of nutrition)

• Bio-distribution - birds taste like the feed they eat. Milk from cows of the grass / grain they feed on (Grass-fed goat, free-range chicken / eggs or pasture milk tastes diff for this reason)

• Processed chicken like nuggets from a factory are hydrolysed, breaded and flavoured - (diluting, adding further carbs and dousing in artificial flavour)

• Flavour solutions bring together advanced organic, analytic & synthetic chemistry, neuroscience, psychography, psychophysics, ethnography, demography, molecular biology, finance, botany, economics, physiology and even feelings

• The modern food we eat is a very good compelling lie

• An ounce of vanilla was worth as much as a shot of a good single malt whiskey. Madagascar produced most of the world’s vanilla from an orchid blossom. When its govt. tried to destroy stock to control price in the 70s, McCormick produced vanillin from pine trees (now made from clove oil which is even cheaper)

• Retronasal olfaction - aroma that enters not through nose but back of the throat, engaging different parts of the brain (wine-tasting and wasabi!)

• We can distinguish over a trillion aromas

• Umami (glutamic acid) was discovered as the flavour from cheese, meat and fish broth in 1908 by Japanese. Umami rivals vanilla on its influence on the food industry. Ajinomoto is the leading producer of MSG (monosodium glutamate)

• Vanilla was reverse-engineered through gas chromatography (deducing substances by molecular weight). Vanilla had over 100 compounds but vanillin only 30. Yet, it was indistinguishable from vanilla (though vanilla was like a layered novel and vanillin a comic book). Production moved from Madagascar to Baltimore. Even though vanilla prices have dropped, still imitation vanillin is used

• By 1965 there were 700 flavour chemicals identified through gas chromatography. Today there are over 2200, from apples, to wasabi to balsamic vinegar - all from factories instead of plants

• Garlic, miso and soy sauce contain glutathione (kokumi flavor) that’s rich, full-bodied (Givaudan & Ajinomoto make)

• Sizzlers in restaurants use sizzle sauce that makes sizzle louder and aroma more intense (engineered by McCormick)

• Flavours are engineered for “need states”. Customers buy food based on these “need states” (like no fuss dinner).

• Most restaurant chefs are chefs in the same way people that assemble ikea bookshelves are carpenters (they follow operational guidelines, not recipes)

• Customers order off menus, the restaurant kitchens also order off menus. Real cooking happens in the factory, just reheating in the kitchen. Real cooks are Griffith labs, Kerry and McCormick

• Natural flavours - derived from plants, roots etc. (natural origin) but with natural chemical processes, enzymes and heat

• Synthetic flavours - manufactured from petrochemicals and industrial chemistry. Both natural and synthetic flavours are equally engineered

• Flavorists order flavour chemicals like cis-3-hexenol (leaf alcohol) from Allured’s Flavours and Fragrances (480 page phone book for flavours). (Givaudan, IFF, Symrise, Firmenich, McCormick)

• In 1918 avg. American sprinkled half a pound of spices. Today its 3.5 pounds!

• Yield improvements since ‘48 - 4x corn, 3x rice, 3x potatoes, 2.5x wheat, 2x soybeans, 2x eggs, pigs - 25% bigger in 25% less time, beef cow - half as old with 60% more meat (with flavour dilution & hence the rise in consumption of flavours)

• Engineered flavours trigger “wants” so strong yet don’t provide the disproportionate pleasure as indicated by the craving (just like smoking or drinking)

• Food addicted brains are not happy brains. It takes a lot of gorging just to get to the baseline happiness

• With non-junk food becoming less-flavourful (flavor dilution), junk food becomes more enticing

• Just like pigs and chicken that gorge on high-octane feed, human beings have become the same gorging on high-octane junk and so look like livestock

• Palatant - additives added to make livestock eat more eg, Sucram for sheep (feed science of its own). Hershey’s syrup is a eg. of human palatant

• Rise in obesity is a direct result of the rise in manufactured deliciousness

• Only 10% of Italian adults are obese, against 35% of American adults

• Plants produced a lot of plant compounds as toxins to ward off insects / pests. These compounds are useful for animals and goats learn to connect the dots between the flavour and nutrition (it’s a learned behaviour)

• A lot of plant secondary compounds are anti-oxidants. Trying to synthesise these has failed so far. Trying to locate the specific compound that helps prevent cancer is like crediting a solo violinist in an orchestra for the music sounding good (Eat whole fruits and vegetables, organically grown. Higher the natural flavour, higher the secondary compounds in it)

• Flavour is a chemical language, nature’s mother tongue. Bitterbrush talks through tannins, sagebrush through terpenes. The meaning could vary by species

• Animals eat what they need because what they need tastes good (Each organ and cell communicates this through its receptors)

• Coriander, fennel, ginger, basil, cinnamon, turmeric - are rich in plant compounds good for us. Since these cannot be patented, not much money is thrown into them

• Health benefits of Mediterranean diet come from Olive oil (oleocanthal) and its anti-inflammatory effects (functions just like ibuprofen). Throat burn sensation is a good indicator of quality

• People who consume artificial sweeteners suffer from obesity, stroke, heart disease, type-2 diabetes (maybe correlation but not causation)

• Flavours are highway signs for actual nutrition. When same flavour is paired with two different nutrients, the body gets confused

• Years of research suggests that multivitamins do nothing to augment health (Look up the research papers)

• When children are fed enriched junk food (thiamin enhanced frooty loops for eg.), the child has no incentive to form an attachment to food naturally rich in thiamin (cauliflower)

• Tastiest steak comes from cows that eat only grass and best fried chicken without additional flavour from free-range heirloom chicken (rare old variety genes still bred for taste). These sate even in small quantities (rich in vitamins, mineral and omega-3 and the body knows it). Plant compounds are linked with deep satiety even when its found in animals that consume them

• Ingredient driven cuisine - chefs spend more time in sourcing ingredients for their authenticity and flavour

• Not putting a Dorito in your mouth feels more bad than eating one feels good (Sounds like Kahneman’s loss-aversion curve from behavioural economics!)

• Chicken today contains more omega-6 than omega-3 because they don’t live long enough to convert ALA to DHA which they can and they don’t consume grass or chia

• Yellowed chicken skin and bright yolks comes from carotenoids (Only pastured chicken is rich in them)

• Antifeedants - compounds that reduce appetite (opp. of palatants). Raisins and chilli-peppers are known antifeedants. Bitter compounds in grapes, blueberries and broccoli do the same (Italians have an Aperitivo before dinner for same reason)

• An actual strawberry (or a mango, or jamun fruit) is a masterpiece in flavor engineering. Nature has mastered the art of hedonic density (Max pleasure, min calories). Processed food simply doesn’t have as many chemicals as what nature produces (though we think processed food is too much chemicals incorrectly)

• You can taste the pasture in the cheese or butter (Someone switching from Nandini to Akshayakalpa cow milk would notice the same). Real flavour comes from lower yield and so is often expensive

• 20 of the most delicious aromas in tomatoes are linked to nutrients of life-and-death importance (floral & fruity beta-ionone is a carotenoid, trans-2-heptenal smells fatty, green and pungent is made of omega-3 fatty acids etc)

• Eat carrots that taste sweet and “carroty”, lettuce thats darker in colour, virgin cold-pressed oils. Pay up for taste and real flavour and save on ranch dressing, hershey’s and ketchup

• Eat foods your great-grandmother would recognise as food (Michael Pollan)

Eat foods where flavour comes from the plant or animal and not from a human with a PhD in chemistry. Eat real foods and eat a variety of them. Try new varieties of food and try at least 10 times (body has to make the taste-nutrition association to “like” it). Avoid synthetic and natural flavours (Read the labels). Organic food may not necessarily be healthy - make sure it tastes good. Use herbs and spices not to cover up the blandness but to complement it. Eat dark chocolate and drink red wine and craft beer (mark of palates in tune with good food). Give kids an amazing piece of fruit instead of candy. This is one hell of a book and i highly recommend reading every page of it because changing food habits requires you to be convinced and being slowly convinced over days with sleep and thought in between is going to be better than reading this summary in 10 mins. 11/10

[phreakv6]

This is Water, David Foster Wallace, 2009 - This book is a commencement speech the author gave in 2005, so obviously its not very big. It can be read in 30 mins to an hour at most. It is clever, witty and insightful in content.

The author advises the students to think critically, think about the obvious and mundane (water, for the fishes) be open-minded to others’ viewpoints and avoid blind arrogance. Our own thoughts and feelings being immediate and obvious puts us at a huge disadvantage to truly understanding others without bias.

Learning “how to think” is in reality just learning about “how” and “what” to think about. About what you pay attention to. You will precisely end up being what you pay attention to. The meaning you choose to see from life is completely in your control, because you are after all the centre of the universe.

It is almost zen-like in parts, on the bits about worship, power and of course freedom - of freedom being about attention, awareness, discipline, effort and sacrifice. Whoever thought of freedom this way? 8/10

[narenarora]

Thanks for posting this. Just curious to know whether anything mentioned on fasting for good health?

From general reading and some book review on this thread i understand regular fasting is a great way to keep oneself healthy

Regards
Disc: I don’t practice fasting yet

[rskothari]

Thank you. I enjoyed reading this book. Will gift copies of it to my colleagues

[Joseph_Johnson]

Dr Attia is against fasting except in extreme circumstances(advanced diabetes, no regulation on food intake, etc). This is because of the partial breakdown of muscle for fuel that the body uses before switching to stored fats. He sees musculature (exercise to be more precise) as the single most contributing factor towards a longer healthspan. Dr Attia did use to observe fasting protocols (quarterly water only fasts) before but has since stopped the practice and recommendation.
TLDR : Avoid fasting due to resultant muscle loss.

[Mudit.Kushalvardhan]

Is there any proof that muscles are harmed in fasting? This factor is not covered under the study of intermittent fasting?

[Joseph_Johnson]

I can’t cite papers unfortunately. I am referring to the Time Restriction (TR) in part 3 of Dr Attia’s book.

[VIFL]

‘Zen in the Art of Archery’

Written way back in 1948. This book has already got a mention once in this thread.

An excellent book on applying zen to one’s pursuit of excellence, to eventually achieve self-realization.

End goals of Zen/Buddhism, & Gita are different. So, ‘achieving self-realization’ part is my own interpretation, not the book’s. So, one could say the book is about applying zen to Karma Yoga.

[karanthharsha999]

@Chandragupta
A personal appreciation for updating this forum on the benefits and the importance of keeping up with good health. The like was just not enough for the wisdom shared.
Thank you once again for reading such topics and updating for others to get motivated and read the book and design or update their own lives.
.

[Chandragupta]

Many thanks for the kind words. Good to know you found the post useful.

[basumallick]

Peter Attia’s book Outlive, which I read last month, was interesting but I find it very difficult to trust people who seem to drive home one particular point at the exclusion of others.

Till a few years back, Dr Attia was bending backwards trying to convince everyone that intermittent fasting is the answer to all evils. Now, he has taken a complete u-turn. Who is to say he will not make complete u-turns on other things in the future?

Unfortunately, nutrition is a subject that is in the grey zone of science. A lot of experiments are done that produce results contradictory to one another. Read reputed journals like Nature, Harvard Medical etc regularly and you will realise this.

One thing I have understood after keenly studying a lot of material on health and wellness for many years.

• Eat a healthy diet and avoid junk food
• Eat less than you wish to but don’t starve yourself
• Exercise regularly - including cardio and some form of strength training
• Have a social life with friends and family (mental wellness)
• Avoid all fad diets!!

Everybody knows these things. The trick in all this is not the knowledge but the execution of it. People falter in the execution.

Note: I am not a doctor or a nutritionist. I am just a overweight person trying perpetually to get fitter and lose weight, so take my words with a lot of salt (even though it is not good for your health ).

[GourabPaul]

The data popped my eyes. Thanks for the detailed review of the book.

I have a personal story with my grandmother (age : 80 ). Doctors had written her off and gave her 12-13 pills a day to control her blood sugar levels, blood pressure, sodium levels etc. She was almost bedridden and occasionally fainted.

My mother took charge and shifted her diet (she did it out of common sense). Her diet was replaced with Ragi, Millets and home grown vegetables. Now she takes 1 medicine and is able to walk and do her daily activities.

We prioritize everything but food.

[Chandragupta]

Agree with you completely, nutrition is a grey zone and there is a lot of confusion. Dr. Attia himself says in the book his views have changed over time. As new research happens and new evidence builds, views can (and should) change. That is what Science means, its a feature, not a bug!

[Chandragupta]

Okay. I haven’t heard any of his podcasts or followed his views elsewhere. Now I get your point. Thanks for this perspective. Noted.

• Chandragupta.

[avneesh]

Book: Automated Stock Trading Systems: A systematic approach for Traders to make money in Bull, Bear and Sideways Markets
Author: Laurens Bensdorp

Multiple non-correlated strategies to make money in bull, bear and sideways markets.

There are as many styles of trading as there are traders. However, to create a sound, successful multi-system approach, we need to concentrate on only four basic styles of trading: long-term trend following long, long-term trend following short, mean reversion long, and mean reversion short.

Long-term trend following long: Simply going long based on some MA indicator.

Mean Reversion Long: A reversion system is the opposite approach. In the case of mean reversion long, you look for a stock that has been much oversold and for which there is a better-than-average statistical likelihood that it will rise back to its mean price. This is very short-term trading, where you get in and out again in a few days.

Mean Reversion Short: With mean reversion short, you seek stocks that have been overbought and short them, expecting them to drop back to their mean. There is a moment when what I call “stupid money” gets into a market, and the institutional money is heading for the exit. That’s a sign that a stock is overbought.

Long-term trend following short: Trend following can work on the short side as well as the long side. When there are severe downtrends, as in 2008 or 1929, a simple system in which we sell short when the market shows a clear downtrend can be very useful.

The 12 Ingredients of Every Trading System: Your objectives, Your beliefs, Trading universe, Filter, Setup, Ranking, Entry, Stop-loss, Re-entry, Profit protection, Profit taking, Position sizing

Ranking: You might rank stocks by: Volatility, Strongest trend, Most overbought and Most oversold

Because you’re only trading ten stocks, the ranking is a very important part of your system. If you choose the most volatile stocks, or the most overbought stocks, or the most oversold stocks, you will come up with very different rankings. This brings you back to your beliefs. If you are trading a trend-following system, for example, your beliefs about which stocks will perform well in that trend will inform the way you filter.

Example of systems based on the above 12 ingredients:

System 1: Long Trend High Momentum

Objectives: To be in trending stocks that have big momentum. This gets you into the high-fliers, the popular stocks when the market is in an uptrend. We only want to trade when the market sentiment is in our favour and we are in very liquid stocks. I like a lot of volume for long-term positions because the volume may diminish over time and you want to have a cushion so you can always get out with good liquidity. Also, I like to rank this system with the more volatile stocks first. I want to stay in the stock for a long ride up, so I’ll have a wide trailing stop.

Beliefs: Historical testing has shown that buying big momentum stocks has a consistent edge when bought in an uptrend and then putting in a trailing stop to capture profits.

Trading Universe: All stocks listed on the NYSE, NASDAQ, and AMEX.

Filter: Average daily dollar volume greater than $50 million over the last twenty days. Minimum price $5.00.

Setup: Close of the SPY is above the 100-day simple moving average (SMA). This indicates a trend in the overall index. The close of the 25-day simple moving average is above the close of the 50-day simple moving average.

Ranking: In case we have more setups than our position sizing allows, we rank by the highest rate of change over the last 200 trading days. This means the highest percentage price increase over the last 200 trading days.

Entry: Next day market order on open. I’m not worried about slippage for a long trade, and I definitely want to be in.

Stop-Loss: The day after entering the trade, place a stop-loss below the execution price of five times the average true range (ATR) of the last twenty days. That will definitely keep me outside the daily noise and give the trade room to develop.

Re-entry: If stopped out, reenter the next day if all entry conditions apply again.

Profit Protection: A trailing stop of 25 percent. This is in addition to the initial stop-loss. Eventually, as the stock rises, the trailing stop will move up above the stop-loss price.

Profit taking: No profit target; the goal is to ride this as high as it will go.

Position sizing: 2 percent risk and 10 percent maximum percentage size, with a maximum of ten positions.

Drawbacks of System 1: At times when the S&P index is below the 100-day simple moving average we don’t get any set ups and thus don’t get any new trades. Then we are on the sidelines and know it will take a long time to recover from that drawdown. When there are no trends there are no setups, and this is one of the biggest drawbacks of trend-following systems.

System 2: Short RSI Thrust

Objective: Short stocks in order to hedge when the markets move down. When long positions start to lose money, this system should offset those losses. This is the perfect add-on to an LTTF system, to capture those downward moves.

Beliefs: There is always a time when there’s so much greed in certain stocks that when you short them, the statistical likelihood that you can buy them back a few days later at a lower price is greater than random, so there’s a very consistent edge.

Trading Universe: All listed stocks on the NYSE, NASDAQ, and AMEX.

Filter: Minimum price of $5.00 Average dollar volume over the last twenty days greater than $25 million. We need enough volume to generate the liquidity necessary for you to be able to short the stock. The average true range percentage over the last ten days is 3 percent or more of the closing price of the stock. This filter identifies stocks that have sufficient volatility for the system to work. Measuring ATR as a percentage of the closing price treats every stock the same in terms of assessing their volatility.

Setup: Three-day RSI is above ninety. This shows a lot of demand and momentum for the stock—another way of saying “a lot of greed.” The last two days the close was higher than the previous day.

Ranking: Highest seven-day ADX. The ADX helps us to select stocks that are moving a lot, and many times a very high ADX is a good indication of a trend reversal.

Entry: Next day, sell short 4 percent above the previous closing price. This is a limit price, to ensure we don’t have negative slippage, which could erode our edge. Also, selling short 4 percent higher than the previous close gives us an additional edge, capturing more intraday greed.

Stop-Loss: The day after we place the order, place a buy stop of three times ATR of the last ten days above the execution price. This is a large stop, but it is the key for mean reversion. If the stock continues to rise, we will be stopped out, buying back the stock we shorted at three times the ATR.

Re-entry: If we get stopped out, re-enter the next day if all entry conditions apply again.

Profit Protection: None. No trailing stop because it is a very short-term trade.

Profit Taking: If at the closing price the profit in the position is 4 percent or higher, get out the next day’s market on close. We also have a time-based exit: If after two days the trade has not reached its profit target, we place a market order on close for the next day. The goal is to make a fast profit or get out of the position. If we stay in the position it may go against us. Instead, let’s get out and look for another candidate.

Position Sizing: 2 percent risk and 10 percent size, a maximum of ten positions.

Trading System	CAGR%	Max DD
System1 Momentum	22.52	42.14%
System2 Short RSI	18.14	24.66%
Combined System	43.54	31.5%

Here you can begin to see the power of multiple non-correlated systems trading. At almost 43 percent, the CAGR is substantially improved compared to either of the individual systems. The maximum drawdown is now 31 percent.

He added more non-correlated systems and improved the CAGR, volatility, drawdowns, MAR and overall performance of the system.

Conclusion: This is a very short read for starting quant investors. The book offers a peek into the future. As computing power increases many small investors will also be able to afford these strategies and backtesting. It also shows how to make money when markets are trading sideways or falling down.

[valuetortoise]

Recently revisited “Antifragile” by Taleb, and would recommend it. If you are new to Taleb’s work, “Fooled by Randomness” could be a more accessible starting point but nonetheless, “Antifragile” is great. Very eclectic in nature and revolves around the idea of thriving from uncertainty.

Written a bit on some of the takeaways on my blog. Regardless sharing some of the ideas here!

What makes one Antifragile?

• If you drop a glass bowl it breaks. It’s fragile when exposed to randomness.

• If you drop a steel bowl nothing happens. It’s robust when exposed to randomness.

• Now imagine a bowl that actually gets stronger every time it is dropped. That bowl is Antifragile as it benefits from randomness.

Anything that has more upside than downside when exposed to random events is said to be Antifragile.

Antifragile Via stressors

What’s important to highlight is that you cannot become antifragile by trying to eliminate randomness from your life. Antifragility is not the absence of randomness. It is rather the situation when you thrive from randomness.

You need small stressors to make you more robust. Here Taleb gives the example of children whose parents protect them from every small stressful situation. Due to their overprotective parents, these children grow up without the ability to deal with stressful situations. (Not ideal)

In the medical field, taking antibiotics for every small problem can change bacteria so much that antibiotics don’t work against them anymore. Sometimes you need a small stressor. The whole idea of a vaccine is to train the body to better fight a disease using a small dose of the disease itself. (Yes, it’s more complicated than that but you get the idea)

Weight lifting, running, or any other exercise is actually a stressor to the body which helps one remain healthy and fit. Simply lying in bed the whole day without any stressors does more harm than goo

Antifragility Via Negativa

Nassim Taleb defines via negativa as “The principle that we know what is wrong with more clarity than what is right, and that knowledge grows by subtraction. Also, it is easier to know that something is wrong than to find the fix. Actions that remove are more robust than those that add because addition may have unseen, complicated feedback loops.”

The simplest way I tend to understand it is by inverting the problem at hand. Instead of asking “Which restaurant do you want to go to” ask the question “Which restaurant do you not want to go to.”

While that sounds so simple, I think it’s a super-powerful concept. Think about Buffett’s investing rules. “The first rule of investment is, Never to lose money. The second rule is, Never forget Rule 1.”

His rule is not about some positive idea to generate alpha. It’s actually about not losing money. It’s inverting the problem. It’s about avoiding stupidity rather than seeking genius. (Munger fans where you at!)

Inversion is used heavily in the medical field. When there is uncertainty about what somebody is suffering from, a lot of tests may be prescribed so that certain diseases or medical issues could be removed from contention. Either that or there is good money to be made for the medical practitioners.

Antifragility Via Lindy

Taleb writes, "For the perishable, every additional day in its life translates into a shorter additional life expectancy. For the nonperishable, every additional day may imply a longer life expectancy. "

It basically is saying that the longer a nonperishable item survives the longer it can be expected to survive. The idea of restaurants has existed for at least twenty-five centuries. (taverns) The concept of wearing shoes is almost fifty-three hundred years old. Silverware used in restaurants is based on Mesopotamian technology.

When trying to think about what the future may look like, a good idea would be to see what has actually survived the test of time already and bet on the same. Lindy touches on the idea that things that survive the test of time have some innate robustness that may not be visible to the human eye.

Take books as an example. If a book has survived over 50 years and is still being printed chances are it will carry on being printed for another 50 years. On the other hand, it is hard to say a book will print for another 50 years if it has only been in print for 6 months. When trying to write content that remains relevant for a long time, it may be easier to actually think about the past rather than the future.

If people 50 years ago could perfectly understand what you wrote, chances are people 50 years later would also be able to understand the same. Fooled by randomness by Taleb was written almost 20 years ago and is still talked about!

Antifragility Via Fragility

Taleb writes that “Had the Titanic not had that famous accident, as fatal as it was, we would have kept building larger and larger ocean liners and the next disaster would have been even more tragic. So the people who perished were sacrificed for the greater good; they unarguably saved more lives than were lost.”

While the single parishes the whole system gets stronger. For a system to become antifragile, it needs to have the ability to allow single individuals or institutions to fail without dragging the whole system down. This can only be achieved through decentralization.

The VC world is built on trying different stuff and then if you fail, you fail. It is Antifragile as others learn from your mistakes. The industry is decentralized. The Banking world on the other hand is fragile because the collapse of one impacts the whole system and hence the centralization makes the system even more fragile.

Taleb also talks about how bailing out companies can often further fragilizes the system as you are not allowing companies to learn from their failures. Instead, you keep a fragile company alive longer which actually worsens the issue.

If you made it this far, I hope I’ve inspired you to go check out the book.