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A dead MIT professor accidentally destroyed the $20 billion executive coaching industry with one hour of lecture, and ten million people have already watched him do it. He filmed it once in January 2018 and died eighteen months later. Executive coaches charge fifteen thousand dollars a session to teach...

528,056 Aufrufe • vor 7 Tagen •via X (Twitter)

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Ten million people have watched an MIT professor accidentally destroy the executive coaching industry. He filmed the lecture once in January 2018 and died eighteen months later. Executive coaches charge fifteen thousand dollars a session to teach a third of what he covered in one hour for free. His name was Patrick Winston. He ran the MIT Artificial Intelligence Laboratory from 1972 to 1997 and wrote the AI textbook every computer science major in the world read for thirty years. Every January for four decades, he gave a lecture called "How to Speak." His entire framework fits on a napkin. Do not read. Be in the image. Keep images simple. Eliminate clutter. Start with an empathetic connection. End with a punch line the audience can repeat over dinner. Never open with a joke. Never end with "thank you." That last rule alone has probably cost the executive coaching industry a hundred million dollars. "Your success in life will be determined largely by your ability to speak, your ability to write, and the quality of your ideas. In that order." That is the actual opening line of the lecture. Winston believed it strongly enough to spend fifty years teaching computer scientists how to talk. Founders spend $80,000 on an MBA and then hire a communications coach to teach them the same material Winston filmed once for free. Engineers write brilliant code and lose promotions to teammates who watched this lecture on the train. The lecture is free on MIT OpenCourseWare. The textbook is free on his page. Winston died in 2019. Almost none of the ten million viewers have actually implemented the four rules on the napkin. The napkin is free. The willingness to actually use it in your next meeting is the entire edge.

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The MIT professor Congress subpoenaed in 2014 for calling the American voter "stupid" also filmed the free 26-hour microeconomics course every Goldman Sachs analyst has to know before their $250,000 signing bonus interview. Millions have watched. Almost no retail investor has finished it. His name is Jonathan Gruber. He is the Ford Professor of Economics at MIT and one of the two economists Barack Obama's team called into the White House in early 2009 to model the cost curve of the Affordable Care Act. The 75-minute clip in this video is one lecture from 14.01 Principles of Microeconomics, filmed at MIT and posted on OpenCourseWare for nothing. MIT charges $85,000 a year to sit in that classroom. He posted the entire course for free. Gruber covers the mathematical foundation of every decision under uncertainty in one semester. Expected utility. The average happiness you should expect from a decision weighted by probability. Every insurance premium on earth is priced from this formula. Risk aversion. The reason people pay ten dollars for a policy that covers a one-dollar loss with five percent probability. The reason almost every retail trader closes winners early and holds losers long. Marginal rate of substitution. Every salary negotiation, every product bundle at Amazon, and every menu at a Michelin restaurant is priced on it. Adverse selection. Why healthy people leave the insurance pool and sick people stay. Gruber used this exact equation to model the individual mandate of Obamacare. Moral hazard. The reason people drive faster with seatbelts and gamble bigger with a bailout guarantee. Every quant fund on Wall Street pays entry level analysts $250,000 to know this material. Every consulting firm pays McKinsey partners $500,000 to teach it to Fortune 500 clients as a workshop. The one MIT professor who ran the policy modeling for the largest healthcare law in American history gave away the whole framework on YouTube for nothing. "The most surprising fact about human decision-making is how systematically we violate every model that predicts it." That is a paraphrase Gruber returns to across the series. The lectures are free on MIT OpenCourseWare. Gruber's textbook is under sixty dollars. The math is free. The willingness to sit through 26 hours of microeconomics before signing a mortgage, buying an insurance policy, or opening a brokerage account is a much rarer commodity than the confidence to walk in without it.

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Insurance is the oldest of the four ways. It is a nine-trillion-dollar global industry. The equation underneath it was invented in 1560 by a broke Italian gambler. His name was Girolamo Cardano. He wrote a book called Liber de Ludo Aleae. A short manual on how to win at dice. Nobody in finance read it for four hundred years. Then in 1996 a ninety-year-old man in New York wrote a book that traced every modern risk model back to that manual. He called it Against the Gods. One thesis. Every dollar of premium ever collected on Earth is a footnote to a gambler scribbling in Milan. His name was Peter Bernstein. He founded the Journal of Portfolio Management in 1974 and ran money at Bernstein-Macaulay before that. Wall Street called him the historian of risk. In 2008 a small production company filmed him for thirteen minutes. He walked through the entire five-hundred-year arc. Cardano to Pascal to Fermat to Black-Scholes. Then he stopped and said the industry had built glass towers on the back of an idea a broke Italian scribbled to settle a card debt. He died the following summer. Age ninety. Reinsurance premiums crossed six hundred billion dollars last year. Every actuary on Earth prices catastrophe risk with the same expected-value framework Cardano invented to shave the house edge in Milan. The video is thirteen minutes and twenty-two seconds long. Free. Eleven years on YouTube. Twenty-nine thousand people have watched it. Almost none of them work in insurance.

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A Carnegie Mellon professor who spent ten years building rides for Disney walked on stage with ten tumors in his liver and spent 76 minutes explaining how to get what you want out of life. For free. Keynote speakers charge $30,000 for a thinner version of it. He opened with the scans and the doctors' prognosis: three to six months left. Then he did pushups on stage so the room would stop pitying him. No cancer today. No faith either. Nothing about his wife and children, because he would not get through it. His name was Randy Pausch, a computer scientist who spent his career building virtual reality. The whole method fits on a napkin. A wall that stops you is not standing there against you, it is standing there to stop the people who want it less than you do. Worry when the criticism stops, not when it comes, because silence means they gave up on you. Bring something to the table before you ask for anything. Ask in the one way the other person cannot refuse. Give people time and they will eventually show you their good side. Twice he got into places that had told him no, the same way both times. NASA barred faculty from its zero gravity flights but let teams bring a journalist. He resigned as faculty advisor, applied as press, and brought headsets his lab had built for the others to film. Disney rejected him after his PhD. When they started a secret virtual reality project he called back, not for a job but for materials for a briefing to the Secretary of Defense, and six months later he was working inside Imagineering. Early on he explains a trick he calls the head fake: you send a child to play football not to learn football but to learn persistence. In the last minute it turns out he ran one on the room. They came for a story about childhood dreams and got a manual for living. Then he pulls off the second mask. The room was never the audience. His children were too young to remember him, and a recording was the only thing he could leave them. Five hundred people sat in that hall while a father talked to kids he would not see grow up. A senior executive I know sends this lecture to every new person on his team. Not a handbook, not an onboarding doc, this video. The lecture was later turned into a book that sold millions of copies, but the video is the same thing in Pausch's own voice, in front of the people it was written for. He died ten months later, at 47. The lecture is free. Writing the five rules down takes a minute. It is in the video.

Lima

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Harry Markowitz, the Nobel laureate who invented modern portfolio theory: "Every fund from Bridgewater to Citadel runs on one equation I wrote as a 25-year-old grad student. Wall Street pays quants $500K to use it. It's free." the thread above teaches you to build a portfolio the real way, with the mathematics of capital allocation. every line of it traces back to one paper markowitz wrote in 1952. before him, "don't put all your eggs in one basket" was folklore. he turned it into algebra. he proved a portfolio's risk isn't the average of its parts, it's driven by how the parts move together, the covariance. combine assets that don't move in lockstep and you cut risk without giving up return. that is the closest thing to a free lunch in all of finance, and he wrote the exact equation for how much of it you get. that single insight, mean-variance optimization, is the engine under every serious fund on earth. renaissance, bridgewater, citadel, your pension, all of them size risk with markowitz's math. he published it in 1952, won the nobel in 1990, and it sits in every textbook and this free lecture. same story i keep telling: the math that runs the trillion-dollar machine has been public and free for seventy years. here is the part markowitz himself warned about. the equation is only as good as the numbers you feed it, your estimates of return and covariance. feed it garbage and the "optimal" portfolio it hands back is confidently, precisely wrong, and it detonates in the exact crisis it was built to survive. the optimizer is free. estimating the future honestly, and knowing when to distrust your own inputs, is the entire job.

Rossst.03

44,131 Aufrufe • vor 1 Monat

Flip a coin. Heads, your account goes up 50 percent. Tails, it goes down 40 percent. Expected value is plus 5 percent a flip, so you take the bet a hundred times. Expected value says your $10,000 becomes $1.3 million. The most likely path leaves you with $52. An MIT professor explains the entire gap in one sentence, in a free undergraduate lecture, then moves on like it was nothing. His name is John Tsitsiklis. He teaches undergraduate probability at MIT. He also proved in 1994 that Q-learning converges, the result that says the algorithm under modern reinforcement learning does not merely happen to work, it has to. INFORMS gave him the von Neumann Theory Prize for that line of work in 2018. He runs the lecture on the students for an hour. First he takes the average apart. A random variable is not a number, it is a function. A bar graph of probabilities is a PMF. Expectation is the center of gravity of that bar graph, the single point where you slide a pen underneath and the thing balances. He is slow and patient about it. By minute 35 you trust the average completely. Then he stops and says he wants to give "one general word of caution." "The average of a function of a random variable, in general, is not the same as the function of the average... in general, you can not reason on the average." Everything before that sentence was the trap. Go back to the coin. Compounding is not addition. Up 50 then down 40 is not plus 10. It is 1.5 times 0.6, which is 0.9. You are down 10 percent. Do that 50 times each way and you have 0.9 to the fiftieth power. Fifty-two dollars. So where did the $1.3 million go? It is real. It is parked at the very top of the distribution. Run the hundred flips and only about one path in seven finishes above where you started. Only about one in a hundred ever reaches that $1.3 million. Those few runs are gigantic, and they carry the average for everybody else. You will not be in them. In February 2018 that trade had a ticker. XIV, short volatility, $1.9 billion in it. It had paid on the average day for seven years. On February 5 the VIX rose 115.6 percent, the biggest one-day jump ever recorded. XIV went from $115.55 to $4.22 overnight. Credit Suisse shut the note two weeks later. Nobody in it was wrong about the average. They were wrong about which path they were standing on. The usable version: your compound return is your average return minus roughly half your variance. A system averaging 20 percent a year at 40 percent vol does not compound at 20. It compounds at 12. That missing 8 is not fees or slippage. Tsitsiklis delivers the most expensive sentence in finance, finishes the variance section, and ends with "see you on Wednesday." The lecture is free. The average is free. Knowing which path you are standing on is the trade.

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