August 17, 2014
Why the World Remains the Same, Despite Repeated Calls for Change

The more things change, the more they stay the same. Such a statement is as clearly true as it is surprising. At nearly each moment there is an infinite number of individuals aspiring to induce radical change. Constant lamentation of the current status quo is commonplace. Yet, the world with all its nuances and perceived injustices remains nearly unchanged. 

There are of course a number reasons for this. The chief reason is that there exists a paradox between the type of disposition one must have to produce change, and the disposition often exhibited by those who desire it. Those who often campaign to bring ‘justice’ to the world have the mindset of the oppressed , and as a result, by internalizing this identity are forever ineffective. 

The individual in power however, the one who can actually exact change has achieved such heights through a mindset of supremacy and through the belief that their possibilities are limitless. These individuals, often pejoratively labelled the ‘one percent’ do not view the world through the oppressed/oppressor paradigm. They merely see opportunity and take it. As a result, their exploits are often successful causing scant desire for change. 

Those who constantly deride the status quo, however are plagued by the belief that they are not in control, that their destiny lies with the conveniently imagined ‘oppressor’. This propels a self perpetuating negative cycle whereby these people instill themselves with the belief that they are oppressed, achieve nothing as a result, and reinforce that belief with their evident failures. 

Thus, we see the present quagmire, that to be in a position of power, one must accept the status quo as given and achieve success through the existent yet admittedly flawed system. 

In short, those who would benefit from things staying the same are in control, and those who desire change lack control and inadvertently deprive themselves of it.

August 17, 2014
Negative Tactics

Negative tactics are a disservice to a sport, to any sport, but most especially to football (soccer). They are a disservice to the fans who collectively wish to be entertained. They are a disservice to the players who aspire to fully express their creative potential. They deprive the development of the game as a whole through the spread of such negative tactics. Attempts to kill an individual game figuratively through negative tactics slowly cripple and kill the sport collectively, leaving a ravaged artifact in its wake. 

Negative tactics include any approach to the game that seeks to achieve victory through overly defensive or legally questionable methods. In practice these include simulating or diving in order to elicit a foul, they include concerted attempts at affecting refereeing decisions, time wasting, or the attempt to thwart an opponent by focusing solely on defense (In soccer terms this is called playing with 10 men behind the ball). There are certainly other examples but the commonality is clear, that these practices detract from the overall entertainment and aesthetic value of a football match, not to mention its underlying integrity. 

These tactics are most often fueled by those who espouse a philosophy concerned with victory at any cost. They are pernicious and should be discouraged and in some instances banned from the game. 

Certainly anyone who agrees with the general premise that football ought to be played in an attractive, legitimate approach should agree that these examples of negative tactics are anathema. In the short run, they may produce individual victories but they rarely create the foundation for a consistently successful team. This is because many of the aforementioned methods represent an attempt to circumvent the implicit purpose of a football match: to act as an arbiter over which team is ‘better’. 

A team can win a game by scoring a goal through chance early on then attempting to waste time thereafter. They can win by perpetual simulation in an appeal for disciplinary action against the opposing players. They can win by concealing egregious acts of misconduct against opposing players. They can win by playing subtle mind games with referees. They can win by essentially ‘killing the match’, which involves passing the ball among the center backs and goalkeepers endlessly in an attempt to frustrate the opposing team. 

Certainly such practices should be discouraged, but there has unfortunately been a proliferation of these methods as of late. One league where they tend to thrive is in the Serie A, which has unsurprisingly exhibited a subsequent fall in grace as a result. 

Teams in the Serie A are often incredibly defensive and attempt to influence the referee in their team’s favor. Their fans are also notorious for racist and otherwise abusive chants towards opposing players. While such practices are certainly not confined to the Italian league, they have seemingly flourished in it, leading to a fall in interest in the league. 

Perhaps it is unsurprising that a league infamous for negative tactics has lost favor with fans. Who would be interested to watch games governed by such petty tactical set ups? The question then is if such tactics are in theory so reviled, then why do they persist? 

The simple answer is that fans of a team tend to support the notion that individual success trumps collective development. Fans who truly support the improvement of the game tactically should put pressure on managers guilty of practicing overly negative tactics. (Jose Mourinho is a coach who immediately comes to mind) 

This mentality only serves to detract from what is an inherently beautiful game. Please do not allow the beautiful game to turn ugly. 

Save Football. Tell Neymar to stop diving now.

August 17, 2014
Bibi Netanyahu’s Errors

This week we necessarily find ourselves on the subject of politics, dealing with the perennial quagmire in the Middle-East. Beyond the inaccuracies of the media, beyond its commercialization of war, there lie true geopolitical lessons to be learned from this conflict. 

In some senses Benjamin Netanyahu is an adroit politician pursuing the most self interested moves in the political sphere. In another sense, his decision making is proving to be rather suspect, marking somewhat of a critical turning point in the decades long conflict. I will argue that this seeming inflection point is a negative development for Bibi the politician in the long run (though with potential short term benefits), and for Israel the state entity. 

Disregarding muddled questions of legitimacy and of moral high ground for a moment, we see that Bibi’s decisions are informed by pure calculations of individual and group interest. Thus, an analysis of his adeptness as a politician necessarily requires an appraisal of those decisions. 

This fact is further informed by the widespread realization among political elites that Bibi’s decision to invade Gaza was a foregone conclusion supported by a desperately awaited pretext. Netanyahu sought to cripple Hamas’s abilities as an institution (for time-sensitive reasons and because of the tendency to do so every few years) and thwart chances of a Palestinian unity government. 

Furthermore, Netanyahu is facing increasing political pressures both from the dovish left and militant right and in general war galvanizes a country thus consolidating political power. It is as a result that Bibi sought to increase his short term political capital. 

However, in pursuing these ends, he did not foresee a few critical developments. 

Firstly, the advent and increasing use of social media, as well as the omnipresence of smartphones has meant his efforts at regulating the media have met some difficulty. 

In this sense, Hamas is not the real threat to Israeli hegemony over the region, since Israel is undoubtedly superior in all respects. The true threat is global public opinion, which has increasingly turned against the Israeli government in the mainstream political sphere. This fact has also translated to the geopolitical sphere, with Israel’s allies seemingly losing patience with its perceived petulance. 

The United States, though maintaining its ostensibly iron clad guarantee of protection to the Israel, has shown clear signs of weariness with what is quickly becoming a pariah state. In short, the two interwoven matters of public and state support have shown fissures, spelling a bad omen for a state that has never before had it so good. 

The second element to this conflict has been the recent ground invasion, which by most measures is ending disastrously for the IDF. Hamas is proving a much tougher nut to crack, and is imposing serious casualties on the Israelis, causing a public relations nightmare for Bibi Netanyahu. Either he provides concessions eventuating in a truce and thus appears weak, or he doubles down and pursues a more vigilant invasion, which is highly risky and could have more perverse consequences. 

This conflict has also propagated the element of fear throughout Israel, causing it emotional and tangible commercial damage. The Iron Dome has been largely incapable of shooting down the rocket missiles, and as a result they are spreading pandemonium throughout Israel. Tourists have left the country, and prospective tourists have decided not to visit. 

In addition, the FAA and European aviation authorities recently banned air travel to Israel following the landing of a rocket within miles of Ben Gurion airport. That Netanyahu personally called John Kerry in a plea to rectify this is perhaps a testament to the injurious effects this is having on his political bravado and his country’s wellbeing. 

Benjamin Netanyahu has seemingly created himself a death trap with his imprudent political maneuverings. He is now left with a war he is quickly losing, a massive loss of public opinion, further distancing from his allies, as well as the realities of the losses being incurred upon his country. 

What he now faces are a global public opinion backlash, widespread fear, and increasing political isolation. Netanyahu has no one to blame but himself. He rolled the dice and a snake eye is staring him straight in the face.


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August 17, 2014
Open Your Mind

If you have not changed your mind about your beliefs over the years, you are not thinking enough. If you have not made up your mind about those beliefs, you simply are not thinking, or you are lost. I’m not really sure which is worse. Perhaps that doesn’t really matter much, since the result remains. 

As a mental exercise, attempt to deconstruct all that which you hold dear (a la Cartesian doubt, but in a much less philosophical sense), and continue until you as an individual remain with nothing to hold onto. Then, slowly reconstruct only that which is worthy, and the remaining individual will trump the previous one. Do so every so often, and your mind will emerge more resilient and free than before. 

The issue with most people is the narrowness of their scope. They are only aware of the one life they live, of the ideas and beliefs impressed upon them by those they interact with. In a sense, the individual lives in a suffocating self contained bubble, one with its own assumptions and beliefs about life. 

It is in this sense that these people are narrow minded, in that their definition of self follows nearly directly from their experiences with the familiar. In other words, nearly none of their life is self determined. The human who aspires for greatness, for freedom from inhibition must transcend this pernicious trap. 

Open your mind to all possibilities. Do not enslave yourself to an idea, a dogma, a philosophy. The path to true freedom is to detach from society, not in the pejoratively accepted sense that involves pure isolation, but in social detachment. You must not allow convention to deter you, for common wisdom is as widely accepted as it is erroneous. Open your mind to the reality that at any moment nearly everyone is wrong and lost, and that they certainly are hoping that you do not come to this realization. 

Stay ahead by imposing your right to individuality. Defy categorization. To fit neatly into a category suggests simplicity, which suggests a lack of insight on the part of the individual. Ideas are meant to be tossed around, toyed with, entertained and repudiated. No idea should be off-limits, for the world of ideas is strangely interconnected, and to reject certain ideas is to deprive the individual of infinitely new possibilities and experiences. The best, clearest, most influential thinkers were at once considered iconoclasts. The human disincentive to accept that which flouts tradition means that a truly committed thinker must dwell in the collective gutter of ideas. 

They must entertain that which is considered reprehensible. Humanity is a herd, and freedom is only achieved by the individual who can successfully break from the herd. This path surely leads to criticism, but popularity breeds mediocrity, since vast acceptance requires the pandering to those with weak, petty minds. This contrarianism will certainly draw its detractors, but to lend credence to the herd is to join it, to be as powerless as its other members. Certainly that is not an end you seek, nor is it one I would wish upon anybody in particular. 

To paraphrase Howard Marks, if you do as others, you will be like others. In other words, you will be mediocre. To be truly great, you must buck the trend. To create value, you must adopt contrarianism. 

Open your mind. Free it of its biases, prejudices, its dogmatically held beliefs. Do not tether yourself to any one idea or assumption. Break free from the inhibitions placed upon you by society. Open your mind, for you never know what it might discover when left unfettered.

August 17, 2014
How We Make Friends

Human social interaction represents perhaps the most superficial aspect of the human experience. The superficialities involved in these superfluous, petty rules are certainly vexing to the rational observer. Perhaps the most worrisome of these interactions involves the way most people go about making their friends. 

Thought there exist clear aberrations to the trend, most people pursue a similar and perverse method in managing their social circle. Most do not pursue friendships on the basis of mutual shared goals or interests, but rather convenience. This is largely because these individuals are at their core lonely and thus attempt to mitigate this loneliness through an ostensibly large and lively social circle. 

In pursuit of such a goal, the individual often forfeits control and selectiveness over their circle of friends. Further, because their success is measured through the lens of quantity and not quality, the individual often finds themselves with a large social circle among whom virtually no tangible connection exists. 

By failing to cultivate interpersonal relationships, the individual fosters vacuous relations with those around them. What most clearly illustrates this phenomena is the fluidity of these friendships, or in other words the fragility of them. Few friendships pass the test of geography, situational change, or even time. 

This suggests that these friends were exchanging in a quid pro quo, whereby they each associated with one another not because they particularly enjoyed each other’s company, but rather because they wanted to be in anybody’scompany. Had it not been for this friend, it could have easily been a different friend and the relationship would remain nearly identical. 

This is perhaps most evident in the college environment, whereby individuals on the same dorm floor happen to befriend each other, and members of a sports team seem inseparable until the inevitable disintegration of their team induces the subsequent separation of their respective friendships. For what are the chances that people living on the same floor are so consistently a compatible match for each other, or that the same could be said of members of a team? This manufacturing of friendships certainly relies upon elements of convenience further supporting the claim that the majority of human friendships are essentially baseless. 

Furthermore, few maintain friendships beyond the scope of unwieldy, large social circles, which often suggests that neither of these friends connects on a purely individual level but rather is a part of a group for the purposes of personal and social gratification. 

The prevalence of temporary, vacuous relations is certainly worrisome. It indicates that perhaps the majority of people are truly lonely, and merely find temporary distractions from that underlying loneliness. For the only way to escape such feelings is to cultivate strong, interpersonal friendships built on the basis of mutually shared interests, goals, and values. The paucity of such friendships is certainly sad, but it would be foolish to expect social competence from the mindless masses.

July 2, 2014
Humanity as Game Theory

Yousuf Hafuda

The existence of societal restrictions and seemingly illogic norms is at first glance rather baffling, but can in fact be explained through the terminology of game theory. Despite the diversity existing between these norms, the universal aspect among them is that they serve to impose a set of rules upon an individual. They offer them an implicit guide to achieving social acceptance and gratification.

In fact, the inception of such restrictions can likely be attributed to the pervasive existence of a prisoner’s dilemma in human interaction. Society functions much like a prisoner’s dilemma in that mutual cooperation is collectively preferable, while individual deviance benefits the individual to the detriment of the masses, and widespread deviance eventuates in societal dysfunction. Thus, the often inhibitive and judgmental nature of society seemingly serves a tangibly attributable purpose, in that it corrals its members into the adoption of a mutually shared system. 

While examples of this game theory element existing in the sociological sphere are abound, a few pointed examples can aid in illustrating their implications. 

The first and perhaps most mundane norm is that of standing in line. Society collectively decided that the mutual gains arising from such a norm necessitated its imposition. In this instance, everyone is best served if everyone follows the rules. However, the individual is best served if they can somehow vault to the front of the line, resulting in a positive eventuality for that individual and a negative eventuality for everybody else. Finally, if each person were to follow this logic and cut the line, circumventing the implicitly imposed norm, the group collectively would be much worse off, and chaos would ensue. 

Therefore, the enforcement mechanism devised to prevent such an outcome is public shame and scorn for those who refuse to play by the rules. This enforcement mechanism, of subjecting the individual to perpetual public judgement serves to compel them to acquiesce and accept these rules. (Which as a tangent, is one of the central themes of The Stranger by Camus, a book that helped induce this theory) By introducing this element of judgement the aim is to alter the individual’s utilitarian calculus such that it becomes more beneficial to follow the rules than to circumvent them in search of individual gain. 

Though this system is largely effective, there are instances where it breaks down, due in part to a multitude of competing factors. There are those individuals who remain unrestricted by the force of public judgement, and enough of them can cause the line to become chaotic, in both the figurative broader sense and the literal sense of this illustration. There are also instances where the deviant can remain surreptitious, thus removing the element of public scorn. Another element is what lies at the end of the ‘line’, in other words what is at stake. If the line is for a hot dog stand, the likelihood of a breakdown is slim. If the line is offering a limited number of sizable checks for a million dollars, however, the utilitarian calculus suddenly shifts, and the line is likely to become chaotic. 

Nor is this structure limited solely to restrictions on an individual’s actions, for it also pervades their belief structure. It is here that the prisoner’s dilemma becomes somewhat more convoluted in nature and perhaps not as beneficial to the individual. 

One example is the belief that ideology is one dimensional, in other words, that one’s actions and believes need be constrained to existing dialogue. One cannot therefore simultaneously believe in the eradication of a minimum wage and the strengthening of the social safety net. While this person may have completely consistent reasons for such oft-regarded disparate beliefs, society subjects them to scorn for not ‘playing by the rules’. 

The reason for such an externally imposed belief structure is that the failure to adhere to such a belief structure corrodes the political status quo. An individual who does not buy into the existence of unnecessarily contingent political beliefs is a threat to existing politicians seeking to create a facade of cohesiveness. In effect, the reason for the imposition of this particular prisoner’s dilemma is that those existing at the helm of the status quo are best served by the lack of nuance in ideology. 

Yet another example that has become politicized is the practice by African-American communities to shame those members of its community who are ‘too white’, in essence repudiating their origins. The reason for such scorn is the preservation of culture, whereby the group can collectively preserve the culture by coercing its members into ‘remaining black’. However, because ‘acting white’ is often merely a synonym for the rejection of the perverse elements in African-American communities, the individual benefits by transcending such externally imposed restrictions. However, we see again that if a group collectively does this, the ‘culture’ is lost, much to the chagrin of its more entrenched members. 

Furthermore, such a societal restriction is often imposed by the community’s eldest members upon its burgeoning younger members. This is because though its eldest members have already been stunted by the perverse elements of their community and can no longer improve their lot, its younger members can disavow some of these elements and markedly enhance the trajectory of their lives. Thus, the existing prisoner’s dilemma is that those who are destined for destitution (ie the majority of the community) are better off if its members accept its tenets while the enterprising individual conversely benefits from the repudiation of such elements. 

The implications of this interpretive framework are ample, but some are more crucial than others. That society functions as a prisoner’s dilemma is not necessarily an inherently good or bad thing, but there are instances of each. To refer to the aforementioned examples, the norm of standing in line is a beneficial one, whereas those restrictions regarding ideology and cultural affiliation can often prove rather pernicious. 

Thus, from the individual’s perspective, one must realize and differentiate between the beneficial and perverse restrictions, and abide by the former and spurn the latter. The individual who remains unrestricted by social judgement and chooses actions on the basis of merit is well placed to move ahead in a society that often serves to inhibit the individual. Often times the individual can only get ahead by flouting social convention and remaining undeterred by social derision, with the realization of this mentioned prisoner’s dilemma framework. 

In instances where society’s inhibitions are misplaced, one can take advantage of the prisoner’s dilemma to the benefit of the individual. While this may result in a lack of social gratification in some instances, this need not exist as a deterrent since popularity is overrated anyway.

June 25, 2014
Our Origins as Inhibitions

Yousuf Hafuda

Freedom is a collective human aspiration, and yet so few consciously attempt to achieve it in its truest individual sense. (That being the separation of one’s constructed self identity and externally imposed identities) 

After having done some self reflection, I noticed how origins limit, curtail, and impede the fulfillment of one’s true self. Our origins necessarily factor into our raison d’etre, our definition and realization of self. And as inherently human as this is, it is also severely worrisome. 

Certain origins denote certain meanings, certain identities. They suggest to a person that they should be something because of an externally predetermined something else. There is the expectation that their idea of self is congruent with the self they should be given where they are from.  In less convoluted terms this suggests that one’s origins are a truly inhibitive force. 

One’s ethnicity, religion, lineage, the wealth of their parents among others are all factors that contribute to this phenomena. They all share the similarity of inducing certain restrictive expectations. This phenomena permeates the merely behavioral sphere and affects the beliefs, and cultural disposition that are expected of a person. 

This means that an individual from an East Asian culture is expected to retain an affinity for the collectivist tenets of the orient and prefer them over the individuality of the west. An arab kid such as myself is expected to exalt the engineering and medical professions, and likewise attend a large University in search of such a goal. 

An Asian-American is expected to be vested solely in academics and care little about other competing aspects of their life. There are countless other examples but these provided examples serve to illustrate the inhibitive nature of one’s origins. 

Despite these pressures, however, the onus lies on the individual to transcend these expectations and contradict them with ease. For it deprives the individual of the right to self expression and self definition to impose a cultural, religious, ethnic, or other paradigm merely by virtue of one’s background. 

Ideally, one should flirt with ideas and philosophical structures from an eclectic and purely discretionary range of sources. The synthesis of the preferred ideas should entirely reflect the individual’s level of self fulfillment, and not simple facts about the individual’s origin. We are collectively much more than the sum of our origins. There are experiences, phases, and transformations that suggest otherwise. 

The ultimate goal then, is the detachment of one’s self identity from the identity society expects of that person (ie that they are separately functioning entities not necessarily in complete contradiction), as well as complete cultural ambivalence.

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June 25, 2014
The Morality Police

Yousuf Hafuda

Our inhibitive, suffocating culture of moral posturing, of political correctness has inculcated a new generation, a generation which sees itself the protector, the charlatan of a brand, of a dogmatic idea, of morality. Here lie the gatekeepers, punishing each transgression, pontificating their dogma, outdoing one another in the pursuit of elusive moral fortitude. Their petty attempts, a self claim to altruism, a claim backed by their own purported disincentive to engage in such brinksmanship. For they are not the afflicted, but rather the antidote. They represent not the destitute and impoverished, but rather ‘those more fortunate’, a phrase used by the very hypocrites who aim to exonerate their place in society as those who ‘have’. Their only problem being the paradox they perplexingly find themselves in, at the propitious end of the spectrum they so readily excoriate, rebelling against the society they comprise and simultaneously deride. 

What has become particularly worrisome about their game is that it has transcended the heretofore considered bastion of political correctness, liberal institutions, and has permeated the walls of society, of normalcy. What was once a vocal, marginalized minority has decidedly corralled the “ignoramuses” into obsequiousness. Their version of enlightenment: cultural, political, sexual hypersensitivity. More worrisome than their ostensibly well-intended goals is the forced eradication of perceived and  social ills, of the war against human inequity, conflated by them with iniquity.

When will these people comprehend? Their purported charity is not needed. The world does not exist for them to save it, nor can they. The universe is not one big lie, or conspiracy; It is indifferent, for it could care less if “x” has seemingly benefited from the undue benefits of lineage or if “y” has been condemned by its paucity of material wealth.  In fact, their meddling has merely exacerbated the ills they ostensibly remedy. The morality police has done nothing but to push prejudice underground. In doing so, it risks the true fragmentation of public opinion.  It is here that such perverse thoughts fester, the uttering of which is punished by ostracisization, and yet the latent possession of which remains virtually undetected. 

Deprived of a medium for expression, faced with the curtailment of the right to speak, the morality police has in essence created a latent behemoth. As they campaign for the forcible imposition of people’s ‘rights’, they create an invisible barrier, the barrier of belief. For they have seemingly emerged victorious in the war of words, but have sorely lost the war of beliefs. They have propagated the onerous stipulations regarding worker’s rights, but their achievement remains vacuous in light of the continued existence perverse and yet discreetly held stereotypes. 

The morality police’s membership is fueled by the need to escape meaninglessness, by the guilt experienced as a result of their privilege. Through preemptive eagerness, they seek to advertise devotion to this cause, to exercise agency over the expression of others. Their sensitivity is a consequence of their ignorance. They cannot comprehend nor sanction a world that is inherently ‘unfair’, and thus they seek out to fix it, remaining undeterred by the inconsequential nature of their actions, rather deriving motivation from the self image they concoct through it. 

I refuse to be compelled by the morality police, to quell the base elements of my psyche, to filter my thoughts in accordance with that which is sanctioned. The only effective mechanism to mitigate the perversity of the morality police is to flout it, to convince others to follow suit. This conscious insensitivity reminds the policemen/women that they do not temper my expression. They do not have the right to, nor are they in the right in doing so. This reactionary stand is the only viable remaining option, the failure of which will eventuate in a purely superficial society, one where sentiments are expressed on the basis of social sanction and not individual merit or authenticity. Before us is the chance to rebel, to resist, to insist that superficiality will not triumph over authenticity, that the morality police is not in charge, that nobody truly is, and that is the sobering anarchic nature of the universe.

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June 18, 2014
Thoughts on the Efficient Market Hypothesis

Yousuf Hafuda

The Efficient Market Hypothesis is as reviled as it is revered. To its staunchest proponents, it represents a vindication of the true scientific nature of the stock market, and even more broadly, of the nature of things. 

To its most fervent detractors, however, it is a plain farce; concocted to explain away the nuances of the marketplace; to reconcile confusion with order. 

Broadly speaking, EMH is accepted most widely by academics and rejected by institutional and individual investors alike. Academics cling to empirical studies showing that stock market performance divergence can be explained away by pure randomness. Investors, however, vehemently cling to anecdotal evidence, or the insistence that certain divergences exist beyond the clutches of pure chance. 

My personal evolution on the subject was as expedient as it was mercurial. Yet, at long last I feel I have yet reached an ideological stasis, one that accounts for both the convolution and precise nature of the stock market. 

Having taken a class on financial economics, I was swayed by the conventional acceptance of EMH in the realm of academics. This belief was further augmented by my own acquaintance and exposure to the follies of those who fancied themselves stock-picking prodigies. 

Inducing these sentiments was the observance of the human tendency towards superstition, as well as the tendency of the overestimation of one’s personal ability. Tersely, though most fancy themselves exceptionally sagacious and adept, in truth very few are. 

Further, as we are inculcated to believe in our Introduction to Economics courses, the stock market is perhaps the closest non-organic setup to a perfect market that has ever been attempted. The notion that each individual investor, many with a wealth of resources at their disposal, could somehow know better than the rest of many equally adroit analysts is anathema. Surely the pandemonium surrounding investors’ claims at an uncanny ability to beat the market are all equally unfounded? 

Yet, shortly after having read the prophetic Intelligent Investor by Benjamin Graham, my position altered dramatically. Though I did not repudiate all elements of EMH, far from it in fact; I maintain that there remains yet a way. This belief, though perhaps also ephemeral represents the position at which I find myself. 

Quite simply I have altered my view to believe that EMH (ie beating the market) can be violated by a select few through a select number of consistent methods. In short, the endeavor is no longer helpless, but remains reserved only for a few with an apropos mindset. 

My reasons for such a partial reversal rest upon two fundamental premises: 

1. That humans are in fact rather fallible and incredibly liable to repeat past errors
2. That there are certain behavioral elements to the market that cause for incorrect valuations that can be exploited through, careful, sober, value-driven security analysis 

The assumption of EMH relies revoltingly on the idea that security analysts are somehow infallible. The enduring notion that a stock’s price accurately reflects all available, pertinent information is severely undermined by the simple fact that humans are creatures of error. The only way for EMH to be true is for the human element to erode, a mere impossibility, since security analysts are after all nothing more than an on average bright group of individuals. 

This element of unpredictability, of viscera is completely unaccounted for by the over-simplification of the market into a rigorous, scientific sphere. This element is as present in the market as it is in business and thus will perpetually result in the mis-pricing of assets. 

Finally, the EMH seems incredibly dubious in light of the human tendency to behave like a herd. The very concept of ‘irrational exuberance’ stems from this observation, as are the presence of market bubbles. Because analysts are fickle and often times rash, as per human nature, they behave in ways that defy the clutches of reason. Thus, an investor with the sagacity and necessary discipline can exploit these moments of madness and ‘create value’ (or to inject more jargon, generate alpha) in the figurative Wall Street sense. 

The only way to achieve the above stated goal, however, is to follow the advice of the sage Benjamin Graham and his protege Warren Buffet (and Charles Munger), to invest in assets on a sufficiently long time-table on the basis of value and not price movement. The goal of such an aim is to produce a performance heavily reliant on fundamentals, on the underlying worth of a company, rather than the inconsistency and caprice of the stock market. For a more wholesome introduction to the concept, I recommend a reading of the Intelligent Investor (accompanied by other investment books, of course). 

The simple proclamation I wish to make is that I no longer believe in the extremities of EMH’s theory, and I certainly believe and can only hope, for credible reason.

June 17, 2014
Free Trade as a Form of Redistribution

Yousuf Hafuda

Many lambast the perceived perverse effects of trade on the domestic economy. More specifically, they claim trade disproportionately hurts poor, unskilled workers. While on a certain level, this may in fact be true, there is reason to believe trade is ultimately a redistributive artifact. 

Free trade allows for the movement of factors of production (labor, capital resources etc.) across borders. It is as a result that labor heavy forms of production move to areas with cheaper labor, presumably where labor is more plentiful, whereas capital intensive forms of production move to economies with sufficient levels of capital. 

This seemingly convoluted process leads to two phenomena. It means in a world where factors of production can move unfettered, developing countries will attract low skill menial jobs while developed countries will attract skill heavy jobs. 

This has two major implications, each of which has a somewhat perverse element, as well as an underlying positive eventuality. When the aforementioned factors of production move, skilled laborers in developing countries must endure depressed wages, since they reside in a country whose competitive advantage lies in the abundance of its labor supply. 

Conversely, unskilled laborers in developed countries face a similar downward pressure on their wages, and increasingly face the prospect of perennial joblessness. This latter effect is often politicized, resulting in the evident demonization of free trade movements. 

Critics relying on these premises as a basis of criticism miss the redistributive nature of free trade, however. Though unskilled laborers in developed countries (such as the US, UK, and the rest of the EU) face adversity as a result of free trade, its effects are a boon to the masses who are employed in developing countries. 

If the economic logic of trade is to be accepted, which it should be because it is an empirical truism, we see that though a side effect of trade is the depression of low skill wages in developed countries, this negative effect is more than mitigated by the net positive gain arising from increased wages for unskilled laborers in undeveloped countries. The welfare of skilled laborers in undeveloped countries, mentioned above, also adds to this redistributive element. 

Though it is true that trade on the whole likely increases inequality, the current trajectory has simultaneously lifted millions of people out of poverty and allowed for greater levels of economic efficiency. 

Thus, opponents of free trade must decide between sacrificing the welfare of unskilled laborers in undeveloped countries, as well as increased levels of economic efficiency, and the welfare of the relatively well off (as compared to denizens of developing countries) working class members of developed countries. 

When framed within this context, the societally acceptable solution is ostensibly an increase in free trade measures. Free trade decreases consumer costs for durable and nondurable goods, redistributes income to the members of society who truly need it, and leads to irrefutable net gains to society. Its assumed perniciousness must certainly be a result of ignorance rather than a true opposition to its unheralded positive benefits.

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