Prejudiced You - How to test your biases

Courtesy: commons.wikimedia.org

We hate apartheid. We hate racism. We hate slavery. Or do we? We have laws in the books categorizing such behavior as illegal. This may ensure eradication of biased behavior from the social scene. However, if the seeds of discrimination are stored in our thoughts, they may grow the poisonous fruits as the rain of hatred pours.

We, the pseudo-intellectual, the so-called liberals, more often than not claim to have surpassed the boundaries of discrimination, discrimination based on gender, race, color, caste, or even nationality. We say not to have preferred one over the other under the influence of our irrational biases. It feels good to know oneself as unbiased, rational, free of prejudice. But that's the description of a super-human and very unlike us. A beautiful self deception.

Variation of Values - A study of behavioral psychology

Word Feeding

On the auspicious occation of fathering a baby, a colleague of mine posted a picture of the newborn on his orkut album. No harm in that. And afterall every father has constitutional right to post his baby's pic on orkut. Doesn't he? I too, under the spell of human curiosity, clicked to have a look on the pic and it was pretty much normal, a-day-old infant clad in pink Mikey mouse printed suit (too young to know who's Mikey), wrapped in sky blue towel.


It was not the picture but what caught my attention were the comments that followed. One of the response was "Cho chweeeeet....cute baby." Thats a pretty standard response, you do not need to think or even see the infant properly to find appreciable features or things to say about. Just "sweet" and "cute" along with its variations, chweeeeeeeeet, tute, tweet, etc., are good enough, why stress the brain.


Another response was "Mubarak ho dost, the infant resembles u...." Now, this is hilarious. I know the owner of the comment had good intentions (if he had any) and could not read his words as I can. At first, the world "resemble" caught my attention. A 1-day-old newborn resembles to a 30-year-old adult! One can find the resemblence when kids grow up a little, but how is it possible to find similarity when one of the concerned party is a-day-old baby with red swollen cheeks and lips and closed eyes. One cannot even match the eye color. And that too from a two-dimentional poor quality picture!


Now, read the sentence again "the infant resembles u." Such a good friend is he who wants to assure the father that the baby indeed is his, nobody else's, at least not of the good friend's for sure. Even though I am feeling sorry about the father (if he happens to read and understand the comments), I could hardly stop myself double over with laugh.


You might think, it is too much of me to describe all this nonsense. Indeed, nonsense it is, not to dig deep in thinking, but to speak and write words which are not thought, words which are just taken out of shelf. The society seems to have fed the words in our mouth and coded the incidences, where which phrases should come out. We do not bother to think before we appreciate, we just fullfil our social duty using the preformed template. What an unintillegent species the majority of humans are!

Indians Now Want Caucasian Babies

In the concluding section of my past post Indian Fascination About Foreign, I was trying to figure out the various ways this fascination culminates into, i.e., we predominantly prefer foreign language and wear foreign clothings, etc. And, I found some more fascinating stuff. Today, I came across this article in outlook This Sperm Counts. This article enumerates the mindset of childless Indian couples opting for IVF (in-vitro fertilization) and details how foreigners visiting India become sperm/ova donors to various sperm/ova banks in India who in turn use those sperms/ova to fertilize infertile Indian couples. But why foreign sperms/ova? The answer lies in what type of babies Indian couples want to BUY from fertility clinics. Here is what Indian couples want:

These are the characteristics couples coming to fertility clinics ask for, fuelling the trend for foreign sperm: * Fair skin * Lighter hair * Blue/green or light eyes * High IQ levels

Now, observe, 3 out of 4 desired characteristics in a baby are the common characteristics of Caucasians, that is Indian couples are increasingly willing for their babies to look like someone whom they consider better and superior. Doesn't the above fact reflect a clear preference/fascination for foreigners? Indians have still not liberated themselves from ghost of foreign rule and it seems most of them feel comfortable in this bondage. A bit of imagination: Now, suppose that IVF becomes so cheap that anybody including the daily-wage laborer earning Rs 50 a day could afford it and Indian law allows even the fertile couples to have IVF and to be able to choose various physical features of babies. Given the Indian adoration of Caucasian race, every couple will be more than eager to have and raise babies of foreigners (since sperms and ova would come from foreigners) rather than propagate their own genes. Soon, in a few generations, the whole country will be populated by Caucasians and not East Indians. And in this way, we Indian will finally reach our goal of looking the most like foreigners, from trying to ape them to completely genetically becoming one of them. But then, who will be the foreigner when we too are foreigners in our own land!

Getting Rid Of It

Sometimes, one extra step is all it takes to prevent yourself from caving to temptation. If you have a bad habit, alter the situation so that it takes you at least one extra step before you can easily take part in it. If you watch too much TV, unplug it and put the TV high up in the closet. If you tend to snack on too much junk food, carry around some baby carrots to munch on. If you always hit the snooze button on your alarm clock, set your alarm clock away from arm's length and far enough that you have to get out of bed and walk several steps to get to it. One or more extra steps standing in the way between you and your bad habits might very well be all that it takes to stop it, simply because it gives you that "pause", that moment to really think, rather than have the opportunity to indulge in it without hesitation right then and there.

Source: http://www.briankim.net Or if you want to quit smoking, buy one stick at a time to smoke rather than buying the whole pack.

Is the uptrend over?

In India, people are really very enthusiastic now and very busy, counting returns they would get in future and that too not in terms of percentage but how many folds their money would grow. That's pretty understandable specially in such times of boom (read bubble). Actually, I feel this is extension of that bubble, the last run before things collapse. I know there is great possibility that I am wrong and it would be one of those rare instances when you are proved wrong and yet it feels great to be proved so. But there are a few things that would make you worried.

The riskiest economies, all with current-account deficits and relatively high consumer-price inflation, are India, Turkey and Hungary. Those with current-account deficits are vulnerable to a sudden outflow of capital if global investors become more risk averse. Economies where inflation and credit growth are already high and budget deficits large, such as India, have less room to ease monetary or fiscal policy if the economy weakens.

Source: The Economist

US Housing Bubble: The worst thing in US housing bubble is yet to happen. Here is what fed says.

First, the bulk of the first interest rate resets for adjustable-rate subprime mortgages are yet to come. On average, from now until the end of 2008, nearly 450,000 subprime mortgages per quarter are scheduled to undergo their first reset, eventually causing a typical monthly payment to rise about $350, or 25 percent. Second, the weakness in house prices and the resulting limit on the build-up of home equity will hinder the ability of subprime borrowers to refinance out of their mortgages into less expensive loans; as a result, more borrowers will be left with a mortgage balance that exceeds the value of the house.

Source: The Federal Reserve

So by 2008, mortgage thing should come out in full color.

The Expert Phenomenon: But the "great minds" must be correct in predicting whether there is a problem in the economy or not, at least partially. So, it must be better to listen to the "experts" rather than trust your own logic. Or we are wrong? Here are some Greenspan quotes from the '90/'91 recession: (recession started in July, 1990)

“In the very near term there’s little evidence that I can see to suggest the economy is tilting over [into recession].” - Greenspan, July 1990

“...those who argue that we are already in a recession I think are reasonably certain to be wrong.” - Greenspan, August 1990

“... the economy has not yet slipped into recession.” - Greenspan, October 1990

Japanese Money: Yen-carry-trade is another story. As dollar depreciates against most currencies and yen is one of those currencies, those who borrowed in japan will definitely like to pull their money out of markets and pay back their yen loans.


How Much is Too Much, How Long is Too Long: Now one would say how far can Indian markets fall, may be 15000 in extreme conditions and that would be a great time to enter. So, even if the markets fall we have a reason to enjoy since it gives you an opportunity to make even more profit by entering at low levels. Well, think again. In 1989, Nikkei was trading at 38,000. In 1996, it dove to 22,000 and people called it long-term buying opportunities. It continued its downward journey to 7600 in 2003. Today, its trading at 15,000. Same happened with Korea and other Asian economies too and it won't be a surprise if India joins the list in the near future.


Human Behavior: People are making beeline to buy companies trading at huge premium (read high PE) counting in how many days their million will turn billion. The two basic problems with such people are greed and sluggishness. They are sluggish to enter the market and often enter when the stock has already appreciated quite a bit and if the party continues, they gain, but when things turn the other way round, they are even more sluggish to get out of the market. They wait for the market to return which never happens. So, be prepared to collect your booty and run before the building collapses.


History shows that, mankind have predicted 9 out of last 3 recessions. The problem with a crash is that it presents a catch 22 situation to you. No one knows when its gonna crash and if its not a crash, then no one wants to miss the ride too. Sitting with cash and seeing the markets skyrocketing is painful as is investing and seeing them reduced to half or even less. A correction may be a buying opportunity as well as start of a recession that's gonna last 3 years or so. This is really critical to those individuals (read naive) investors who have missed out the previous rally and want to get in now or entered the markets in 2007.


Clouds are there in the sky, but whether it rains or not is just a possibility and whether to carry an umbrella or not is your decision. It is a known fact that it is always better to react to the situation then predict future. But here I'm clueless as to what must be the strategy in case market turns bearish. I am unable to figure out what to do in such a situation. 


Finally, here is a pictorial representation of amateur investors' psyche (including me). The credit goes to Saint for creating this piece of billion-dollar art.