Learning the rules

This post is about work. And sex, which are two of the essential areas of life one needs to be able to function in before you can feel like a normal adult. And both sex and work are governed by a set of rules that many people are able to learn just by being in the world.

Asperger Syndrome compromises one’s ability to read nonverbal social cues. A simple example of this deficit is answering the question, “How are you?” It is loaded with so many nonverbal issues that I simply freeze. Even if you tell me, “Just say fine,” sometimes the situation looks special to me, and I can’t figure out why it’s special, so I can’t talk.

So I've spent my life teaching myself the rules for what to do in each social situation. I study people, make notes for myself, and then test the notes to see what other situations my notes apply to. To get a sense of how awkward this looks, here’s a video that is supposed to be a parody of people with Asperger’s interacting with each other. But my family has such a high proportion of people with Asperger’s that this video, honestly, is not far from what our life is like.

In my experience, the places with the most rules are work and sex. So, you can teach yourself the process of becoming better at work by applying the process of learning the rules about dating and sex. And vice versa. I, for example, am great at work rules and terrible at sex rules. So I teach myself using the reverse mechanism.

The rules do make for interesting reading.

HT: @KalimKassam

Value investing and neurodiversity

Michael Lewis has an excellent piece in Vanity Fair on Michael Burry, the investor who bet big on the subprime crisis and won. The whole thing's worth reading. He brought credit default swaps over to subprime loans as a way of shorting those mortgages. The article also nicely goes through Lewis learning that he has Asperger's by way of his son's problems at school.

I particularly love the following bits.

After taking a very large position on subprimes, he felt he had to explain it to his investors.

“I hated discussing ideas with investors,” he said, “because I then become a Defender of the Idea, and that influences your thought process.” Once you became an idea’s defender, you had a harder time changing your mind about it.

He tried setting up a separate company to raise more capital for bigger bets against subprime:

Oddly, as Mike Burry’s investors grew restive, his Wall Street counterparties took a new and envious interest in what he was up to. In late October 2005, a subprime trader at Goldman Sachs called to ask him why he was buying credit-default swaps on such very specific tranches of subprime-mortgage bonds. The trader let it slip that a number of hedge funds had been calling Goldman to ask “how to do the short housing trade that Scion is doing.” Among those asking about it were people Burry had solicited for Milton’s Opus—people who had initially expressed great interest. “These people by and large did not know anything about how to do the trade and expected Goldman to help them replicate it,” Burry wrote in an e-mail to his C.F.O. “My suspicion is Goldman helped them, though they deny it.” If nothing else, he now understood why he couldn’t raise money for Milton’s Opus. “If I describe it enough it sounds compelling, and people think they can do it for themselves,” he wrote to an e-mail confidant. “If I don’t describe it enough, it sounds scary and binary and I can’t raise the capital.” He had no talent for selling.

You hear lots of rumblings about how financial innovations and credit default swaps are to blame for everything. If the Lewis piece is right, CDS provided the quickest way of going short on risky mortgage trenches that were overvalued.

HT: Apologies, I can't recall who pointed me to it. I often wind up with a couple dozen open tabs, and I just can't remember how I got to this one. Google should couple new tabs' opening with a history of where you found the link.....