Daily Archives: February 27, 2009

Facing Facebook Friendships, sociologically speaking

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In a  recent interview with The Economist called “Primates on Facebook” Facebook’s resident sociologist (hey Mark Z, got any more Sociology jobs at Facebook?)  reports that even though we have a lot more projection of our stuff out to the web people continue to maintain the fairly small circles of friendships that characterize offline behavior.

The  author Andreas Kluth has more at his blog

If this holds across social networks it’s very important, suggesting that we are likely to struggle or fail to cope with the level of social interaction we set up online at sites like Facebook and Twitter.

I remain skeptical and would argue that the Dunbar number (about 150,  suggesting the maximum number of people a single person can manage) will be increasing as we learn to cope with more online relationships.     I simply cannot believe this is a physical constraint – my guess it that it’s more an artifact of our tribal evolutionary primate past than a determinant of our future.

The Economist notes:

An average man—one with 120 friends—generally responds to the postings of only seven of those friends by leaving comments on the posting individual’s photos, status messages or “wall”.  An average woman is slightly more sociable, responding to ten. When it comes to two-way communication such as e-mails or chats, the average man interacts with only four people and the average woman with six. Among those Facebook users with 500 friends, these numbers are somewhat higher, but not hugely so. Men leave comments for 17 friends, women for 26.   Men communicate with ten, women with 16.

… people who are members of online social networks are not so much “networking” as they are “broadcasting their lives to an outer tier of acquaintances who aren’t necessarily inside the Dunbar circle,” says Lee Rainie, the director of the Pew Internet & American Life Project, a polling organisation.  Humans may be advertising themselves more efficiently. But they still have the same small circles of intimacy as ever.
Sure I have room for more Facebook  friends, just tweet me at Twitter!

DOW 7000: It is almost over

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Update:  Monday’s brought the DOW near 6800.  Could I have been too optimistic?

Sure it’s presumptuous for me to think I can call the DOW low at 7000 even though I said so back in November, and sure you’d be foolish to believe me more than you believe anybody else or any other source. But you’d also be foolish to believe that *anybody* can call these shots. Even the market makers fail *routinely* to offer much insight into the process and the CNBC pundits and analysts have a very consistent pattern of performance = market averages.

Many people use a backtracking analysis or cherry picking to “prove” they or others have insights you can’t get otherwise, but this is meaningless, in some ways analogous to “predicting” I can toss a coin 10 heads in a row, then videotaping myself tossing the coin 1000 times during which I’ll have some 10 heads runs, and then showing people only the 10 heads segment. Although my prediction power in this case is *random* and can be duplicated by anybody, a gullible person would watch my videotape and think I’ve got insight I don’t have.

So, is it impossible to predict the future? Certainly we can predict many things with some accuracy. Bank accounts and certificate of deposit returns are predictable, solid, safe (and thus tend to be lower than riskier investments) and there are obviously “good deals” in real estate and business, esp. when you are looking at local circumstances with which you are familiar.

Yet like most people I flatter myself and think I as Joe Duck have better insights than that foolish old “Joe Sixpack”. However even if that is true those insights do not necessarily translate into stock or other profits, and as I become more experiences watching the world and watching markets I’m increasingly convinced that the best way to make money is to avoid individual stock picking or even stay away from the stock market altogether, choosing to invest in “close to home” projects such as local real estate and perhaps friends who you know and trust (unless of course the conversation goes along these lines: Bernie! How are you doing? What, you need me to loan you money and order you a plane ticket online?

Of course if I’m right that we are now pretty much at the lows for most of the three major indexes, and that the market is correctly assuming that the stimulus spending will be kicking in after a few months to stabilize the economy, then it’s probably a good time to take a stake in America with some form of index investing. A lot of folks seem to be advising this is a fine time to “get into” this market though of course these are the same folks who failed to call the huge declines. I wish I had time to create a “hall of shame” for any financial pundit who did not scream out “irrational exhuberance” at least a dozen times in the last decade. Oh, wait, that’s easy – put *every financial pundit in the USA* in the hall of shame.