Monday, March 28, 2016

Butterfly Hunting for Fun and Profit

In case you aren't familiar, a "butterfly" in CircleThrice lingo is a magical target with a lot of leverage for future change. It's the butterfly you jostle in order to get the hurricane and the key concept of my Multiverse Reading (that price won't last long by the way, in case you've been thinking about taking the first step in creating your future). It's also the core of an interesting and complex divination / magical working called Smashing Butterflies.

But apart from divination (which focuses on getting you to a known future point through correct selection of present action) how do you find butterflies? A good butterfly has the following characteristics:

The Right Amount of Chaos

A good magical target has a certain amount of chaos, but not too much. See, if there's no chaos, then it's hard to use magic to leverage the system. But too much chaos isn't good either, because the results can easily get out of control. Weather has too much chaos to be a good magical target (and anyone who's tried weather magic knows how unpredictable the results can be). We need a target with enough chaos to move easily and not so much that we can't feel confident about the results.

A Large Potential Spread

In betting, you can bet on a winner or loser, or you can bet on a point spread. But sporting matches only have so much possible spread. A men's tennis match will never be greater than 0-5 and for football, there was once a 0-84 point matchup, but most spreads are a dozen points. But what's the spread on selling copies of a book? Well, zero (the one you haven't written) to, say, 150 million (The Lord of the Rings). That's a very large spread! And unlike a sporting match, there isn't always a winner and a loser. The spread on my book doesn't impact the spread on yours. Money is another example. There isn't really a limit to how much money you could earn, and my ability to earn money isn't tightly linked to everyone else's. Taleb talks about these effects as being part of mediocristan or extremistan (this is a nice quick review).

The reason this is important for a magical target is because with a large spread you have a lot more room to work with. You may not get your book to 150 million, but you can increase sales by 3-fold or an order of magnitude or three orders of magnitude without entering the nearly mythical realm of the 0-84 point football game. And your book can "win" while other books also win. Another way to think about this problem is moving odds. If magic is changing the odds of something happening, the original odds matter a lot. The odds of selling 150 million copies is low, but the odds of selling 1 million is much better.

Internal Locus of Control

In psychology, locus of control is how much control you believe you have over things. A person with an internal locus of control believes they have a lot of impact over events. A person with an external locus of control thinks that things just happen to them. From a psychological standpoint, in general, an internal locus of control is better for you and will produce better life results. Magicians naturally tend to have a strong internal locus of control (after all, we can change reality in accordance with our wills). However, if we're speaking honestly, situations can actually be more or less in our control.

For example, if I want to break up my best friend's engagement or set two of my friends up (both terrible, terrible ideas by the way) I have a lot of control over that situation. I can introduce them and talk them up to each other. I can whisper poison in their ears in order to break them up. And yes, I can use magic and it will be more effective because I know them. If, on the other hand, you want me to set up or break up a couple of people across the world, who I don't know, I'll have a lot harder time. The more actual control you have over a situation, the easier it is to wield magical control. Of course, if you had control over everything, you wouldn't need to use magic at all, but locus of control is still really important. Another aspect to internal locus of control is that I'm the only one (or one of very few people) enchanting for that particular result. The competition is low. For situations that are very public and have an external locus of control, there is usually a lot of competition for results.

Positive Asymmetry

This is another one from Taleb. The idea is that good risk is one where you have a large potential upside and a low, or zero, down side. If I invest $50 into your addictive new app, the upside could be very large, but the downside is never greater than $50. On the other hand, if I speculate with my mortgage payment, I could be out my entire house (welcome to 2008). A good magical butterfly is one where the downside is known and strictly controlled and the upside potential very great.

How to Get Rich

Money is one of the most common magical targets. Here are a few examples of ways people might enchant for money and why they are or are not good butterflies:

Winning the Lottery
This is a terrible magical target. Sure, I buy a ticket when the pot is high, I can afford the dollar and it's kind of fun. But I don't waste time enchanting to win and there's why: The lottery is random, but has no chaos whatsoever. It's completely controlled and difficult to affect. The lottery has a crappy spread. Every person has the same odds and they are very long. Plus every other person who wins impacts my results (ever seen Bruce Almighty?). Even if you move the odds by orders of magnitude you still have a far greater chance of being killed on the way to buy your ticket than winning the jackpot. The odds of winning even $100 is 1 in 36,525.

The lottery also has an entirely external local of control. Not only can you not do much about it (apart from buying your ticket), it's also an extremely public target for all kind of energy, prayer, and magical shenanigans. Finally, while the lottery has a huge upside, the chances of losing your initial investment are basically 100%. It's not like an investment in a stock or a business, where you might lose or win varying amounts over time. Once the drawing is over, your ticket is worth nothing.

Other types of Gambling
Most casino gambling suffers from similar problems to the lottery. There are a few games that have more chaos (craps and roulette come to mind) but slots are highly fixed. There are also a few where skill can help you (like poker and black jack -- though if they catch you applying too much skill to the latter, they will kick you out). Sports gambling magic can be interesting if you know something about the sport, but it's also illegal in most places. The trouble is that gambling is completely fraught with magical competition and noise -- from prayers to charms to spells to just the static of the desperate. Plus the odds are frequently rigged to favor the house from the start. Still, there are places here your magic could gain purchase... but there's also the risk. Organized gambling is designed to be highly addictive and plenty of people, magical or not, can get hooked.

Playing the Market
This is an interesting idea, but has several limitations. The stock market at this point has an extremely high level of chaos. The price of stock has less to do with the value of the company and the overall economy and most to do with rampant and unregulated speculation. This article is a good starting point, or I highly recommend this book. The locus of control is highly external. Without access to information that is a) unavailable to the average investor and b) illegal to act on, what happens is really out of your hands. The spread is good and so is the asymmetry (unless you invest on margin, which isn't really a beginner move) but you need a lot of specific knowledge to act intelligently. If you are already a broker or a skilled trader, I think incorporating magic into your work just makes sense. But for the amateur, you're better off sticking to the dollar cost averaging, 401K matching, mutual fund world -- which means your magic has a lot less leverage. Still, enchanting to grow and protect your net egg isn't an unreasonable proposition.

Starting a Business
This can be a really good magical target depending on the business. It's got the right amount of chaos and you have huge control. There isn't a lot of magical competition (even if there's mundane competition in your space). The spread and asymmetry depend on the type of business, but for small "side hustles" that don't cost a lot to kick off, they can be really good. Of course it's not as easy as buying a lottery ticket or hitting the casino, but the odds are much better as well.

Building a Career
The right career can be a decent magical target. If there's room to grow, you are in an excellent position to enchant the hell out of yourself and your work. There's usually a decent amount of chaos, but not too much. And while the spread is low and the asymmetry modest (there's small downside but the upside isn't hugely exponential either) the locus of control is highly internal. You may have less control over the place where you work, but you have tons of control over yourself. Besides, if you have to work anyway, then you may as well throw some magic in there to help yourself. Note, that enchanting for your job is inherently limited, but enchanting for your career has a much larger upside -- you invest the magic into yourself.

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