North American Contrarian

Telling it like it is… in North America

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A Life Changing Concept from A Terrifically Boring Book… aka The Black Swan

Some time ago, I slogged my way through the book “The Black Swan” by Nassim Taleb.  It is a best-seller described as “prophetic”, “a black swanmasterpiece” and “changed my view of the world”.

Per the title of this blog post, you might guess that I found reading this book like a root canal without Novocain.  It’s the kind of book intellectual minded people hang on their bookshelves to use words like “erudite” in describing their reading habits.

That said, there was a brilliant concept in this book, one that I want to share (and hopefully save the good people of blog-land hours of torment reading the book in its entirety.)

Happy TurkeyThe concept was first introduced by Bertran Russell and is philosophically known as “The Problem of Induction” (sometimes referred to as “Hume’s Problem”) and it’s a human foible that impacts everything from economics to politics to why you are always broke.

Here it is, as described brilliantly in the book.

You are a turkey.  You live a glorious life, dining on the best turkey food (what the hell to turkeys eat anyway?).  Every day is a joy, and has been so since the day of your birth.  There are lots of chickens around for you meet, no limit set on your cockadoodling and careful care is maintained to make sure you are always in top form.

But there’s a problem, and it strikes at precisely 12 PM on October 12.  That, you see, is the day before Thanksgivingthanksgiving, which tends to be an unkind one for turkeys.  In the afternoon you are taken into the barn where your neck snapped and in an instant you sit lifeless, tagged for sale in the grocery store poultry isle.  Your life was an illusion and you never noticed that each glorious day was another slow  step towards this inevitable point of calamity.

So what does this have to do with anything except for Butterball sales?

Consider the case of the Jews in 1930’s, when Germany was on a steady arc towards enlightenment and life was gradually, but definitively becoming only better.  Consider your stock portfolio in 2007, which for almost a decade brought only gains. Or how each successive year you move up the company hierarchy and your salary incrementally follows.

The point is that we often base our current thinking on what has happened in the past.  But the past is often deceptive and sometimes- even often- does not indicate what is to come.  In fact, history is defined by surprises that completely alter the trajectory of everything that came before.

I love this concept… and not only because it fits so nicely with a blog that focusses on contrarian-ness.   The turkey metaphor has had a huge influence on my life.

It was the clincher as to why I got an MBA.  I realized that, although my career was going ok, this was not an indication that it would always continue to be ok and a broader education would buffer against any nasty surprises.   It’s why, even when stocks are on a great run, I still keep to a 30/70 bond to equities mix.  Hell, it’s even why I randomly pick up flowers for my wife on the way home from work.  You simply never know what tomorrow will bring.

Of course, the book delves much deeper into this concept and introduces the reasons as to why we are so prone to this problem.  For those who care to read on, my top three are:

  • Patterns: we want to believe that we have found a pattern when in fact things are much more likely to be random occurrences.
  • We believe almost solely what we see: to the point that we fail to recognize the wider realities outside our field of view.
  • We tunnel– that is, we focus on well-defined sources and ignore alternative ones, or those that fall outside of our own belief systems.

So that’s it.  Don’t bother reading the book, it’s a slog.  But next time you sit down for a turkey feast consider that if you aren’t preparing for the unknown around the corner, you, too, might end up seasoned with delectable cranberry sauce on a Thanksgiving plate.


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Salt, Sugar, Fat: Three Things You Should Know

From the book Salt, Sugar Fat by Michael Moss

1. Cheese Makes you Fat.

Cheese.  Big bricks of cheddar, stringy lengths of mozzarella, and rotund circles of Brie, these are a few of my favorite things.

ImageThere’s not much debate: cheese is delicious.  I eat cheese almost daily, both on it’s own and in other foods.  But I had not realized how the big food companies have manipulated the public in a very intentional way to make us consume more, with the end result that North Americans are the fattest people in the world (US and Mexico rank one and two respectively).

Cheese is one of the main culprits in America’s expanding waistline.  Since 1970, American consumption of cheese has grown by 3 pounds per year.  It delivers an additional 3,100 grams of saturated fat.  It is one of the biggest reasons that Americans eat more than 50% more than the recommended maximum fat allowance.

What’s more, according to Moss this is no accident.  Cheese is woven into our diets in a very intentional, insidious way by the big food companies, particularly Kraft (owned by Phillip Morris).  It’s origins date back to a program designed by the federal government to absorb thousands of pounds of stockpiled dairy.  Food companies have put their advertising might to make sure that one of the fattiest foods on the market gets woven into virtually everything we eat.

2. Fat: You never knew what hit you

Add sugar to a food and it tastes delicious.  Keep adding it and it gets even more delicious.  But hit a certain threshold and that same food loses its allure.  You have passed the “bliss point” and started moving down an inverted U.  The same is true for salt.  But fat does not share this attribute.  Moss cites experiments that show the more fat you add, the better the food tastes.  The “mouthfeel” improves and the body does not seem to register the calorie load it has just absorbed.

What’s more, according to Moss, adding sugar to fatty foods only increases their allure- apparently, it’s is like having Robin suddenly swoop in with Batman.  The brain only registers sheer joy, while scale registers the associated, additional pounds.

3. More Calories, More Profit

Companies can make more money by selling more of a product or service.  Food companies have largely thrown out any other Imagebusiness logic.  It is not the company’s job to monitor the health of the products they sell, only to sell more of it.  Sugar, fat and salt is what the public craves.  They have lead to iconic products: the Oreo, Pizza Pockets, and Apple Jacks.  They have even resulted in new categories of foods, such as “lunchables”

The issue is that food is not an optional, or discretionary product: it’s the life-force we need to maintain our existence.  Moreover, the types of food peddled by the major food companies- and thus what is available at your local supermarket- has a major impact on the quality of life.

While some of the food companies have attempted to clean up their act, they too are addicted to cheap, convenient food laden with sugar, salt and fat.  They stay for the big profits, us for the convenience, addictive taste and low price.  But in the end their profits come at our cost- we pay with the highest obesity rates in human history and a burdened health care system that ultimately picks up the tab.