If not for metaphors I doubt I could understand much of the modern world. So much of what it takes to produce what you're looking at right now I can't begin to fathom. But this lack of knowledge doesn't absolve me from making decisions involving this modern technology.
When Jeff Tucker walked in my office and announced, "David [Veksler] says that 70 percent of our style sheet is not being used." My mind quickly conjured up an image of Jerusalem.
You see (I hope) when I visited that ancient city a few years ago, we took a tour of old Jerusalem. Part of that tour was seeing the archeological diggings of the Jerusalem that the current city sits on top of. Rome and Athens are other examples of cities on top of cities.
"So, when you say 70 percent of the style sheet is unused, does that mean, buried, with only the usable thirty percent lying on top, like present-day Jerusalem," I asked, "with the rest of the code a useless buried jumble of unintelligible symbols, like archeological diggings?"
"That's right, the extra code is cruft, the useless buil up of legacy content that only slows down development over time."
The fact is I communicate in metaphorical barrages. It took some adjustment for me to realize that not each and every sports analogy that would roll off my tongue would easily be understood by everyone at the Mises Institute.
I had a friend recently say words to the effect that he wanted to kick the metaphor habit, that thinking that way was "lazy and inexact." Perhaps, but why rack your brain being exact, when it's so much quicker to connect the dots with a pithy analogy. See?
Ludwig von Mises wrote in Human Action that "Analogies and metaphors are always defective and logically unsatisfactory." But Mises was specifically writing about the numerical evaluation of case probability and in the construct he presented it was arithmetical terms that were being used as metaphor. The "analogy borrowed from a branch of higher mathematics," pales next to a epistemological understanding of a problem.
However, Mises was sympathetic to the use of metaphor in daily speech, writing that metaphorical expression is used to "imaginatively identify an abstract object with another object that can be apprehended directly by the senses."
Philip Z. Maymin and Gregg S. Fisher, writing in the Spring 2011 edition of The Journal of Wealth ManagmentDownload PDF, argue that investment advisors provide added value to their investor clients not so much for their advice about individual investment decisions but by serving as "refrigerator locks."
The authors cite an article from a 1978 psychiatric journal about a night eater who taped signs with "Stop! Think!" on his fridge and then resorting to rearranging the furniture to trip himself up on his way to grab a midnight snack. Finally, the moonlight gobbler locked his fridge and gave the key to his roommate to keep him from his nocturnal noshing. The lock worked, and Maymin and Fisher believe investment advisors who keep their clients portfolios under lock and key, keeping them from acting on emotion and making irrational trades out of fear, greed, or regret are doing for their clients what the refrigerator lock did for the midnight muncher.
Maymin and Fisher believe,
Enlightened behavioral investors ought to be more willing to pay on the order of one percentage point to an investment manager who will prohibit or at least impede aggressive orders than to pay nearly four times as much for the privilege of excessively and detrimentally trading their own account.
The author's conclude "that one of the important functions served by investment advisors is to act like a lock on a refrigerator to prevent the individual investor from overindulging in unhealthy choices as it relates to the their portfolios."
This all reminds me of the old joke told in Las Vegas racebooks.
"I've got a tip on a horse running in the next race at Aqueduct."
"I'll pay you $20 not to tell me about it."
Read the financial section of any paper or website on any day. Stocks rise, bounce, climb, leap, or they plunge, slide, drop, and fall. On rare occasions do stocks even remain steady.
However, as James Geary points out in his brilliant book I is an Other: The Secret Life of Metaphor and How it Shapes the Way We See the World, psychologists studying market movement metaphors find that two specific types of the metaphors are used in describing market action.
Agent metaphors "describe price movements as the deliberate action of a living thing, as in 'the NASDAQ climbed higher' or 'the Dow fought its way upward.'" Conversely, object metaphors "describe price movements as non-living things subject to external forces, as in 'the NASDAQ dropped off a cliff' or 'the Dow fell like a brick.'"
These different metaphor types bend the minds of investors different ways. Agent metaphors give the human investor reader the image that the trend is likely to continue because it implies an "an internal goal or disposition." Object metaphors do the opposite. Passive terms like dropping and plummeting prompt panic selling because these metaphors paint the dire picture that the trend is irreversible and out of the investor's control.
Humans are always looking for patterns as a matter of survival, and when the picture isn't complete our brains fill in the blanks. Unfortunately in the game of investing humans are not served well by their pattern-seeking brains shaped by the metaphorical flourishes of financial writers. So, for most of us, our brains succumb easily to metaphor and pattern making rather than logic or mathematics.
Geary writes that we are but gullible frogs in the investment pond. The frog palate is not discriminating, he explains. As long as an object moves in a jerky, staccato, burst, the frog figures it's a fly. "It does not delay, debate, or deliberate," writes Geary. "The frog immediately shoots out its tongue to grab it."
If an object doesn't move, or moves in a straight line, frogs aren't interested. No sense wasting time, if the object doesn't fit the pattern. That's how frogs survive. Investors do the same, "If it looks like a pattern and acts like a pattern, we think, it must be a pattern."
Certain people's minds don't fall prey to the metaphorical blitz that the world of communication unleashes. Geary explains that those with Asperger's syndrome have impaired social communication, interaction, and imagination. So it's often thought these people have behavioral problems when in fact their brains interpret everything in strictly literal terms, making the metaphor-laced world a difficult one.
In his book The Big Short, Michael Lewis told the story of the socially awkward one-eyed doctor with Asperger's syndrome, Michael Burry. Burry was working 16-hour shifts as a medical intern when he started blogging about tech stocks from hospital computers whenever he had a free minute.
Ultimately, he dropped medicine and started Scion Capital in 2000. Starting with a little more than a million dollars, four years later he was managing $600 million and turning down investor money, after racking up annual returns of 55 percent, 16 percent, and 50 percent, all in the wake of the dot-com crash.
Burry thought it was his glass eye that kept him from easily interacting with people. "He found it maddeningly difficult to read people's nonverbal signals; and their verbal signals he often took more literally than they meant them," Lewis explains.
In the Internet world, Burry could attract money based on his blog posts and performance. Warren Buffett had to take a Dale Carnegie course to get over his social awkwardness in order to meet with investors when he started decades ago.
Burry was finally diagnosed with Asperger's, sometime after he determined that the mortgage market was going to melt down. Reading 130-page subprime-mortgage-bond prospectuses was a snap for Burry, while nobody at Moody's or Standard & Poors (S&P) was bothering to read these things at all.
He bet big on a crash in mortgage paper. However, it didn't go south right away, and his investors were breathing down his neck, as the S&P was soaring over 10 percent in 2006 while their investment in Scion was plummeting 18 percent. Still, Burry was resolute in his view that he was right. And right he was: over $800 million right for him and his investors. But the investors for whom he made so much money said little; Burry's success only served to shut them up.
So while Burry's investors were whipped into a frenzy by financial press metaphors as Burry's mortgage bet sank, and the common knowledge had home prices marching forever upward, Burry's mind remained focused on the raw numbers.
Geary points out there is a rare breed who experience numbers as physical sensations, such as colors or sounds. This condition, referred to as synesthesia, is thought by neuroscientist Vilayanur Ramachandran to be the precursor to metaphor.
Daniel Tammet, author of Born on a Blue Day: Inside the Extraordinary Mind of an Autistic Savant, has what Geary describes as "an especially rich type of synesthesia, in which he experiences individual numbers up to 10,000 as having specific colors, shapes, textures, movements, and even emotional tones."
Tammet describes the number five as a clap of thunder, 89 as falling snow, and David Letterman looked like 117 when Tammet appeared on his show — tall and lanky. Nobody compares to Tammet who once recited the number pi from memory to 22,514 digits, but Geary writes that we all maintain some synesthetic abilities.
The fact is we would not be able to understand things we enjoy every day, such as music, if not for spatial metaphors such as low and high, rising and falling.
Geary starts I is an Other with the words of Rimbaud: "a long, boundless, and systematized disorganization of all the senses," is required for language to "include everything: perfumes, sounds, colors, thought grappling with thought."
Hart Crane's "Logic of Metaphor" appropriately closes Geary's work. Crane lived a life as intense and vivid as his verse, disorganizing his senses with alcohol abuse. Hart wrote to Harriet Monroe responding to her puzzlement over imagery he had used in two of the poems he had submitted to her for publication.
Its paradox, of course, is that its apparent illogic operates so logically in conjunction with its context in the poem as to establish its claim to another logic, quite independent of the original definition of the word or phrase or image thus employed. It implies (this inflection of language) a previous or prepared receptivity to its stimulus on the part of the reader. The reader's sensibility simply responds by identifying this inflection of experience with some event in his own history or perceptions — or rejects it altogether. The logic of metaphor is so organically entrenched in pure sensibility that it can't be thoroughly traced or explained outside of historical sciences, like philology and anthropology.
"The logic of metaphor is the logic of our lives," writes Geary — an arch to connect the complete unknown with the garden-variety familiar. We would be lost without them.
