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John B. Lounsbury Ph.D., CFP is a financial planner and investment advisor in Clayton, NC.
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  • Information Overload 27 comments
    Oct 23, 2009 05:32 PM
    How about this fabulous graphic from Jessica Hagy (here), courtesy of http://flowingdata.com.


    Now let's try to improve this situation:



    And then add one more thing:



    My logic:

    As we collect information we quickly think we understand a thing and confusion goes to a minimum.  After we get to a certain point, additional information tends to:

    (1) Create overload;
    (2) Start to accumulate contradictions;
    (3) Suffer from loss of memory of information obtained early on.

    This situation can be improved by keeping records and organizing the information.  This results in a lessening of the rate at which confusion drops due to the distraction of the organization process.  Because all the information remains more visible through organization, we never reach the low level of confusion of the first graph because selective filtering does not occur.  This filtering allows the illusion of understanding by the selective use of information.  But again this process reaches a minimum point in confusion, but not as low a level.  When confusion starts to turn up due to information overload, organization keeps it from rising as quickly.

    If we add analysis to the organized data, the drop in confusion is even slower as early on the data is too meager to give confidence to analytical results.  The minimum in confusion comes later in this case, and at a higher level, because analysis tends to highlight what is not known quite effectively.  As time and amount of information increase, more things become defined but never to the extent that they can completely overcome the increase in the unknowns discovered.

    A summary of what I am saying would be that the more we know, in general, the more we discover we don't know.  Organization and analysis can reduce the confusion resulting from information overload, but will add to the identification of what is not known.  Confusion with increasing information may go through a minimum, but the infinity of the unknown will never allow confusion to go below some preliminary low level and will force it to go higher.

    The one exception comes with what we call breakthroughs.  When Newton formulates the laws of motion or Schrodinger defines the wave equation or Crick and Watson discover the DNA helix, discontinuities occur where confusion drops spectacularly.  But that drop is temporary and all the new frontiers opened up quickly expand the unknown.  Confusion returns.  
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This post has 27 comments:

  •  
    "A summary of what I am saying would be that the more we know, in general, the more we discover we don't know."

    And there's your catch-22. As confusion is initially reduced through better organization and analytics, one can act with confidence (justified or not) and effectiveness.

    But as the benefits of organization and analytics continue beyond this optimal level, adding to our awareness of what we don't know, we become paralyzed with fear of how much we don't know. We cease confidently making decisions; if we must act we do uncertainly and with lots of "hedges" (reducing our efficiency);
    we look for support of our thoughts from others to "cover our butts" and generally just become plain ol' useless.

    Soon we sit in a chair drooling awaiting the next spoonful of pabulum to be served into our waiting mouth. =>8-O

    All in jest John! A very nice article.

    HardToLove
    Oct 23 05:50 PM | Link | Reply
  •  
    Side-stitcher! You have just written my...damn...I forgot...have it in my index cards somewhere...or was that in a file drawer...which drawer...maybe it's in my puter...or laptop? What am I forgetting not to say!
    Oct 23 05:50 PM | Link | Reply
  •  
    Looks like a U shaped recovery-
    Oct 23 05:55 PM | Link | Reply
  •  
    Almost put this up on one of your other Instas.

    www.youtube.com/watch?...
    Oct 23 05:56 PM | Link | Reply
  •  
    I know you believe you understand what you just read, but I am not so sure you realize that what you read is not what he meant. HINT---It's all a function of the copperacity of the sagatiatable.
    Oct 23 06:03 PM | Link | Reply
  •  
    "I never knew I was so stupid until I learned about stupidity."

    If we delve too deeply along this path, we start sounding like Biblical parables.
    Oct 23 06:09 PM | Link | Reply
  •  
    I think the first chart was the recovery if we just listen to Washington. The second recovery was if we listen to Washington and give our money in an orderly fashion to the mutual fund managers. The third was if we truly look at the data and do a little analysis of our own then invest the money ourselves.
    Oct 23 06:17 PM | Link | Reply
  •  
    Smiley faces. I design the parameters on all my charts to make a smiley face.

    Any data which does NOT meet the design is excluded from my universe.

    "I reject your reality and substitute my own".

    LOL, I just looked at a ton of charts running through SA, was juggling some pretty hard ideas in my head, and almost had an armchair accident when I hit John's petroglyph.
    Oct 23 06:30 PM | Link | Reply
  •  
    LOL...nice, I didn't make that connection initially.

    I think what's missing is a 3rd dimension - perhaps effectiveness of course-of-action, due to more organization, more analysis, and not necessarily less confusion. :)


    On Oct 23 06:17 PM doubleguns wrote:

    > I think the first chart was the recovery if we just listen to Washington.
    > The second recovery was if we listen to Washington and give our money
    > in an orderly fashion to the mutual fund managers. The third was
    > if we truly look at the data and do a little analysis of our own
    > then invest the money ourselves.
    Oct 23 10:16 PM | Link | Reply
  •  
    Swash - - -

    Thanks for breaking it down to simple terms.


    On Oct 23 06:03 PM Swashbuckler wrote:

    > I know you believe you understand what you just read, but I am not
    > so sure you realize that what you read is not what he meant. HINT---It's
    > all a function of the copperacity of the sagatiatable.
    Oct 24 12:52 AM | Link | Reply
  •  
    Maya - - -

    Loved the Blues. Now, we just need to find someone to do a ditty for Peter Shiff and another one for Roubini. Both of them would be tougher. But Elizabeth Warren and Paul Volcker would make great material.


    On Oct 23 05:56 PM Mayascribe wrote:

    > Almost put this up on one of your other Instas.
    >
    > www.youtube.com/watch?...
    Oct 24 12:54 AM | Link | Reply
  •  
    Ok, here's a take from a guy who's studied technical analysis for decades.

    These charts are clearly a mirror into the human psyche. Although these masterpieces aren't necessarily stunning in their complexity, they are indeed mind boggling in their revelations. At this point in time, there are more than 345 conclusions that can drawn, but I'll try to narrow them down as much as possible in the short time allotted.

    Ok, let's get to work:

    First of all, with no organization added to the available information, it is apparent that a person who has absolutely no information, known in most circles as "the dolt", will perform exactly as well as the individual who has all the information. This type of personality is commonly referred to as the "know it all". This phenomenon has been proven to be factual time after time, in various and numerous occupations throughout the lands and millennia.

    A prime example of where this phenomenon is commonly encountered in the modern era is in the realm of stock market investing. It has been proven over many decades, and indisputably so, that a pairing of two individuals, the common "know it all" and the average every day "dolt", will invariably result is a nearly identical financial performance through the course of a solitary calendar year. In most cases this has been proven to be a negative number for both individuals, although not necessarily so.

    Strangely enough, in some pairings, their success can be measured in the hundreds of thousands of dollars to the plus side. However, with the given data, when we encounter an individual who boisterously reports that he has earned $250,000 in the past 10 months, we can not yet conclude whether he is a "know it all" or a common "dolt", but we can assume he is one or the other. How do we come to that conclusion? By observing that he has dollar bills hanging out of his pockets and that his shoelace is untied, we know that he has not yet discovered organization.

    By the process of elimination, and having surmised that the individual has not yet discovered organization, we can surmise conclusively that whichever category this individual would best fit into, we do know that he is totally confused.

    Now, it is entirely possible, using the data gleaned from the charts, to discern whether or not an individual could possibly be a somewhat organized dolt or a completely disorganized know it all. However in order to gather that information, we would need to apply a MACD to the "confusion/information' trendline. For that we would need the necessary numerical data inputs. However at the time of this writing, that data is unavailable.

    It has also been shown that without any organization, many individuals show characteristics of both persona... somewhat akin to a hermaphroditic plant. This persona type is more commonly referred to as a "know it all fuckin' dolt". This type is found more often than would be expected in the profession of business journalism.

    These charts also show, remarkably, that there is a point of optimum performance in the "confusion" aspect. That optimum invariably occurs when the individual has little or no information. A type of mindless nirvana, a form of complete bliss where the individual knows nothing and is not confused in any manner. They know nothing, yet have all the answers because they are not confused. These are what we call "teenagers".

    Due to limitations beyond my control, this analysis will now come to a conclusion. Given more time and space, it would indeed be fun to share with you the more incredible assumptions that can be drawn from these graphic presentations. Next time, we'll go into the methods of discerning an individual's place of birth and mother's maiden name.

    Until then........
    Oct 24 02:17 AM | Link | Reply
  •  
    AlbertaRocks!

    That piece "rocks". The best one-liner: " They know nothing, yet have all the answers because they are not confused. These are what we call "teenagers"".

    Ultimate truth.

    HardToLove
    Oct 24 05:53 AM | Link | Reply
  •  
    Are you describing Seeking Alpha, John?
    Oct 24 07:11 AM | Link | Reply
  •  
    Michael: Right on, bro!

    Alberta: That was some of, if not the best humorist writing I've ever seen here on SA. Amped up that you are a journeyman investagangsta member.

    Toasting bubbles and clouds to this entire thread.
    Oct 24 09:34 AM | Link | Reply
  •  
    Albertarocks---If you truly authored that, and don't write for a living, you've missed your calling.


    On Oct 24 02:17 AM Albertarocks wrote:

    > Ok, here's a take from a guy who's studied technical analysis for
    > decades.
    >
    > These charts are clearly a mirror into the human psyche. Although
    > these masterpieces aren't necessarily stunning in their complexity,
    > they are indeed mind boggling in their revelations. At this point
    > in time, there are more than 345 conclusions that can drawn, but
    > I'll try to narrow them down as much as possible in the short time
    > allotted.
    >
    > Ok, let's get to work:
    >
    > First of all, with no organization added to the available information,
    > it is apparent that a person who has absolutely no information, known
    > in most circles as "the dolt", will perform exactly as well as the
    > individual who has all the information. This type of personality
    > is commonly referred to as the "know it all". This phenomenon has
    > been proven to be factual time after time, in various and numerous
    > occupations throughout the lands and millennia.
    >
    > A prime example of where this phenomenon is commonly encountered
    > in the modern era is in the realm of stock market investing. It
    > has been proven over many decades, and indisputably so, that a pairing
    > of two individuals, the common "know it all" and the average every
    > day "dolt", will invariably result is a nearly identical financial
    > performance through the course of a solitary calendar year. In most
    > cases this has been proven to be a negative number for both individuals,
    > although not necessarily so.
    >
    > Strangely enough, in some pairings, their success can be measured
    > in the hundreds of thousands of dollars to the plus side. However,
    > with the given data, when we encounter an individual who boisterously
    > reports that he has earned $250,000 in the past 10 months, we can
    > not yet conclude whether he is a "know it all" or a common "dolt",
    > but we can assume he is one or the other. How do we come to that
    > conclusion? By observing that he has dollar bills hanging out of
    > his pockets and that his shoelace is untied, we know that he has
    > not yet discovered organization.
    >
    > By the process of elimination, and having surmised that the individual
    > has not yet discovered organization, we can surmise conclusively
    > that whichever category this individual would best fit into, we do
    > know that he is totally confused.
    >
    > Now, it is entirely possible, using the data gleaned from the charts,
    > to discern whether or not an individual could possibly be a somewhat
    > organized dolt or a completely disorganized know it all. However
    > in order to gather that information, we would need to apply a MACD
    > to the "confusion/information' trendline. For that we would need
    > the necessary numerical data inputs. However at the time of this
    > writing, that data is unavailable.
    >
    > It has also been shown that without any organization, many individuals
    > show characteristics of both persona... somewhat akin to a hermaphroditic
    > plant. This persona type is more commonly referred to as a "know
    > it all fuckin' dolt". This type is found more often than would be
    > expected in the profession of business journalism.
    >
    > These charts also show, remarkably, that there is a point of optimum
    > performance in the "confusion" aspect. That optimum invariably occurs
    > when the individual has little or no information. A type of mindless
    > nirvana, a form of complete bliss where the individual knows nothing
    > and is not confused in any manner. They know nothing, yet have all
    > the answers because they are not confused. These are what we call
    > "teenagers".
    >
    > Due to limitations beyond my control, this analysis will now come
    > to a conclusion. Given more time and space, it would indeed be fun
    > to share with you the more incredible assumptions that can be drawn
    > from these graphic presentations. Next time, we'll go into the methods
    > of discerning an individual's place of birth and mother's maiden
    > name.
    >
    > Until then........
    Oct 24 10:40 AM | Link | Reply
  •  
    I think you should add in the graphical representation of your verbally expressed, 'one exception' - breakthroughs. If you did that, you could demonstrate that the association between confusion and information is cyclic. Confusion hits a local minimum as new theory (understanding) allows people to make new predictions, but then confusion begins to slowly rise again as new questions and exceptions to prevailing theory are discovered.

    Over time, as more and more information is uncovered, a breakthrough (paradigm shift) occurs, and a new local minimum is achieved. The cycles would also not be expected to exhibit a linear up or down trend. The only time confusion drops to zero is when 'truth' or reality is discovered. An issue that raises all sorts of discussion points.

    Could such a revised chart represent the concept of knowledge? Is knowledge a balance between certitude and confusion? Argggg.. my head….
    Oct 24 11:09 AM | Link | Reply
  •  
    On Oct 24 10:40 AM Swashbuckler wrote:

    > Albertarocks---If you truly authored that, and don't write for a
    > living, you've missed your calling.<

    Swash, my friend, I assure you 'twas I who penned said nonsense. It took a full 20 minutes, and after posting it, I slapped myself upside the head because in my impatience to see if I could draw a laugh, I wasn't careful enough with it. It really could have been sooooo much better and waaaay funnier. You wouldn't believe the nonsense I can conjure up.

    Thanks for the compliment. I agree with you, I honestly think I might have missed my calling. I have often wanted to write humor, maybe even a novel. I had a brother who died much too young. He was the happiest, funniest guy I'd ever met. To this day I've never met a funnier fellow. Sadly, due to pressures from the god damned tax department he became uncharacteristically depressed, which shocked our entire family. The doctor prescribed a medication to "counter" depression... a medication that had the completely opposite effect. It has come to light that literally tens of thousands of people have been "tipped over the edge", by these murderous medications. Invariably in courts of law, big pharma have won their cases on the premise of "prove it". And yet, they're allowed to continue to sell their potions that do absolutely nothing but harm. And my pain in missing my brother dwarfs their gain in poisoning him.

    I'm rambling now. Thanks again for the kind words. Yeah, I think a little bit of humour runs in the family.
    Oct 24 11:35 AM | Link | Reply
  •  
    Alberta---Sorry about your brother. The tax department and big pharma--now that's a helluva quinella. Some of the toxic piss that passes for medicine nowadays, it's a disgrace. And how many times have you seen a major prescription yanked AFTER it's killed droves. While many others are NEVER pulled in spite of overwhelming evidence of dangerous side effects. I have five brothers and I dread the day that I lose any of them, and I'm no youngster, so I'll probably have to deal with it sooner than later. In the meantime, we can always laugh a little on SA.
    Oct 24 12:25 PM | Link | Reply
  •  
    Rocks, having been through 2 teenagers I applaud your accurate description. I have seen very few exceptions to this rule.

    I was one. As best as I can recall. Getting older has its advantages. I can simply claim I don't recall it that way!!!Today's teenagers will not have that luxury since everything is recorded for posterity's sake, on facebook, video etc....

    Their foolishness will hound them for their whole life.
    Oct 24 12:53 PM | Link | Reply
  •  
    Alberta - - -

    I agree that your essay was one of the funniest I have read. It is so very funny because it is based on reality.

    I am sending out some e-mails with a link to your comment. I think some of my acquaintances and family members will really like this.
    Oct 24 12:54 PM | Link | Reply
  •  
    On Oct 24 12:54 PM John Lounsbury wrote:

    > Alberta - - -
    >
    > I agree that your essay was one of the funniest I have read. It is
    > so very funny because it is based on reality.
    >
    > I am sending out some e-mails with a link to your comment. I think
    > some of my acquaintances and family members will really like this.<

    John, I'm truly and humbly honored. Feel free!

    I didn't think it was "that" funny although admittedly I was chuckling as I was writing it. But it's nothing compared to the ideas I got only 5 seconds after hitting the "publish" button. I have a hunch that all writers experience that. I wonder if there's a term for it.
    Oct 24 01:06 PM | Link | Reply
  •  
    Publishers remorse?
    Oct 24 01:17 PM | Link | Reply
  •  
    Albertarocks and all readers - - -

    I have put a version of this post on PiedmontHudson (piedmonthudson.wordpre.../) with an added section containig albertarocks' commentary. This will be better than just sending out e-mails.
    Oct 24 03:03 PM | Link | Reply
  •  
    Rocks, lol, best that you are careful what you let these guys hear from you...

    Before you know it, you will be famous, whether you want to be or not!

    When you start your own hedge fund, remember your old friends from SA back when...
    Oct 24 08:46 PM | Link | Reply
  •  
    ...Meant to say, also, Rocks, added in my best bass staticy and breathy Darth Vader tone...

    "Impressive".
    Oct 24 08:47 PM | Link | Reply
  •  
    On Oct 24 08:46 PM tripleblack wrote:

    > Rocks, lol, best that you are careful what you let these guys hear
    > from you...
    >
    > Before you know it, you will be famous, whether you want to be or
    > not!
    >
    > When you start your own hedge fund, remember your old friends from
    > SA back when...<

    I won't be starting any hedge fund and I won't be abandoning my friends... ever. If there's one thing I learned from my dad, it's what 100% solid dependable loyalty is.... the greatest virtue a person can possess. My dad wasn't very big, but he was the "king of loyalty", which is one hell of a lot better than being a "king of royalty".
    Oct 25 12:20 PM | Link | Reply
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