Sunday, March 1, 2009

Theory of life

This all started with a belief of Albert Einstein. "God doesn't play dice", he said. An ardent student of mathematics needed a blind direction to follow. Stock markets was the best place to start experimenting with this belief since there was ample data to test the theories and the gains were obvious. I tried several theories which did very well for a several session but collapsed at one point or another. Citing inadequacies in the theories, I moved to another one and so on.

With the analysis of the stock market a new revelation occured to me. Several processes of life actrually resembled stock market fluctuations like weather, relationships and in fact day to day life. Why this similarity exists, I wondered? Because all this may be random.

Let us take a few more examples. Why does it happen that the a serial killer gets caught in the end when he thinks he has taken care of everything the police can think of? Because life is random. Why did Australia lose to Zimbabwe in 1987 cricket world cup? Why do upsets happen in general in sports world? because life is random.

Let me put forward postulates and then try to prove them.
1) Life is random but the probability distribution of events of life is not known.
2) It says that no matter how well you plan for something, there is always a finite, however small, possibility that it will not happen according to your plan. This follows from the randomenss of life.
Lets take an example of sports upsets. Let us assume that the probability of unforced errors in a game of tennis for a strong player is 1/50. The player start playing really well in last 10 games he doesn't make a single unforced error. Now for the probability to hold true, he wil start making more unforced errors in the games to follow. Similarly, a weak player has made more than his share of unforced errors and for his probability to hold, he will make fewer ones. When these two meet, we are promised a great match at hand.
let us take an example of a relationship where a guy has figured out what his girlfriend likes and he has noticed that most of the times doing 'that' cheers her up. But once the girlfriend's mom dies and she is very upset. The guy begins with his antics and since there is no way girl can be in a good mood that day, he fails!
Thus we see that a single theory can never hold in life. Thats why the hindi saying "ser ko sava ser zaroor milta hai" which basincally means that no matter how good you are, some day you will be beaten.
Lets take a look at the stock markets now. Lets say I have a theory of stock market which has so far delivered everyday. Since the stock markets are random, no matter how good the theory is, it is bound to find a day when it is going to fail gloriously.
Problem with life and its likes is that they are not totally random and each outcome is not equally probable. This fact sometimes gives an illusion that the theory covers all the possible outcomes. It is simialr to the gaussian curve. No matter how long you go to cover all the possible scenarios, there will be some left at infinity which can make your move backfire. Thus, the adage "Success in stock markets is not based on how big your gains are but is based on how small your losses are".
That is also why adaptation is important for survival. Adaptation is nothing but a theory of living. Different species adapt differently with circumstances, they are the choices we make. Only a few choices are rewarded and rest of them bear the consequances. Life is dependant upon the choices we make and the choices others make which affect us. This includes the changing circumstances of the universe.
Therefore someone who doesn't change is bound to lose. This is true for life, relationships, careers and businesses. No single theory can ever give immunity from the fall outs of life.

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