Author Archives: Chad Parry

Forgotten

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A short story following the Machine of Death premise

“Power corrupts, to a point. Somebody said that absolute power corrupts absolutely. But he didn’t have any idea what he was talking about.” Mr. Seher watched his own hands gesticulating. “It’s the desire for more power that corrupts. So once you hold complete, absolute power in your hands, you don’t feel driven by your old appetites for fame or money. Every temptation is beneath you except the need to prepare the world for when you’re gone.” In the dim light, Mr. Seher’s gray hair and the whites of his eyes hovered in his chair. Below them hung a sagging downward smile. Folds of furrowed skin stretched out of his jacket from the collar and cuffs. His eyes were alert to the point of not blinking.

I preferred to steer clear of politics. With some resignation, I asked, “Am I going to find out that you have a messiah complex?”

The energy of those eyes seemed to hold the rest of the pile together. “If I cared what you thought, I would have avoided the subject. The truth is, I have been some people’s messiah. It’s been an enormous burden to me. I know that I’ve done things no one else has done.” His tone dared me to belittle this remark.

Every month I wrote a Community piece in the Courier Times, to celebrate an unsung local citizen. The paper had found someone who was about to turn one hundred and who had willed his property to a Livengrin rehab center. He lived next door to it in an overgrown hermitage. The editors loved to feature people in the sunset of life. I knew that there were only two types of subjects. I volunteered for these jobs because I loved meeting the first type: he would be an affectionate retiree. He would spin tales of true love and true loss. We would grin at each other and feel that Tuesdays with Morrie catharsis. He would offer warm advice, reinforcing the moral that the key to happiness was just to keep living life the way you already were. If the old guy played his part right, you would watch how the years slowly compelled him to recede in on himself, until by the end of the interview you had to remind yourself that this was someone who hadn’t already died peacefully in his sleep.

Instead, I was stuck for two hours with the other type. That’s the kind of person who rekindles my disdain for the forgotten outcasts of society. He’s a dinosaur who manages to get more outspoken every year, even though his opinions get less appealing. He doesn’t bother to protect the feelings of the younger generations. He stretches the truth to get attention. I was going to spend the interview trying to figure out why I was so eager to disregard this man, and trying to convince myself that it wasn’t because I was looking at the spitting image of my future self.

Practice had taught me that the best policy was to ignore the stuff I didn’t want to hear. I could stick to the script until my host took the hint. “Our readers are going to be thrilled to hear your history. Why don’t you tell me a story about something that changed your life?”

Mr. Seher grimaced at my posing but then chuckled as a memory emerged. He was resting in a high back, overstuffed armchair. Its psychedelic paisley upholstery was well past its prime. With every tremor it creaked like it held the weight of the world. The boxy room was heavily draped in powerful red hues, although in the twilight everything had turned to black. The walls further hid behind shelves and then stacks of crumbling books and newspapers. He reminisced, “When I was a young man, I had an overpowering fear of fire. I lived in a prairie home where the wildfires could be dangerous. In the summer of 1954, during a heavy drought, the fields started burning. Everything we owned was vulnerable. My family tried to light small fires all around our house, to create a scorched barrier that the larger fire wouldn’t cross. It should have terrified me, but the close contact with the fires restored my confidence. By working with back-fires I conquered my fear that day.

“That was also the last day that I was afraid I would die. Soon I had acquired the perfect means to learn about my death. I knew what the future held for all my friends too.” I caught him getting confused in his story. The first Death Machines were introduced only ten years ago. Mr. Seher didn’t learn how he would die until he was elderly.

“Not long afterwards, I took a friend aside with some news. I encouraged him to be especially alert the following day. He was fated to meet the love of his life. He took my advice to heart. I later learned that anxiety kept him up the entire night. The next day he was both alert and miserable. His expectations were his worst enemy. When he met his future wife, he froze stone cold, so she mocked him, and then he returned insults. Cruelest of all was the irony, because they despised each other initially. It would have been a cherished memory if I had never been involved.

“I wish that were the only time I spoiled an auspicious occasion. Whether I tried to meddle with love or sickness or chance, I was thwarted by the intervention of cunning Irony.” He spoke of Irony as if referring to a houseguest. I could imagine how it had appeared to him in palpable form, first in nightmares and eventually every day.

A sympathetic smile was my response to Mr. Seher’s odd confession. Unfortunately, he took that to mean that he could get away with spouting more philosophy. “Have you ever wondered what it would be like to have God’s job?” Maybe I had put ideas into his head by mentioning a messiah complex. At a hundred years old, I guess I couldn’t expect him to stay focused like an adult. “You might have the desire to help everybody in the world, and you would even have the means, but it would be horribly complicated to get right. People make it ridiculously hard to give them help. It’s as if someone constructs mazes to protect their weaknesses. If I hadn’t tried to improve on my friend’s relationship, then he and his wife would have been more satisfied.”

I thought I could frame the discussion by observing, “You’re tackling the problem of religion: to explain why God exists but he can’t fix our problems in the obvious ways we expect. So tell me what you think God would do.”

“Well, speaking for myself again, I knew it was tricky to interfere with fate. But there was one problem that I couldn’t ignore. Finding a solution was worth navigating the maze.” A normal person could never have taken himself this seriously. “The future was a time of fear. I saw it growing like a disease until the whole race, all our children’s children, eked out their stunted lives. And the Death Machine was the antidote.”

A smarter man than I would admit that my script had unraveled, but I didn’t give up. “Interesting! Can you share your death prediction?”

“I can show you where the first Death Machine came from.” Unbidden, he pointed to a silver jewelry box on his side table. It had the curious aspect of an artifact that belonged in either the distant past or the distant future.

“So it came from your pill box,” I ventured, hoping desperately that he wasn’t going to describe how the box was a gift from a big green comic book character.

“If ever Man was given a gift from God, that was it,” he pronounced, while he looked on the case as affectionately as if it were a boon companion. I made a mental note about the frailty of the human condition, and how the tiniest mental imbalance could mean the difference between sanity and hysteria. “It may not be much to look at. But I spend all my time savoring its influence. That’s the Oracle.

“The Oracle reveals the future and it reveals the past. I’ve immersed myself in it so deeply that I’m intimately familiar with the whole timeline of humanity. You know, humans haven’t changed much over the past 10,000 years, much less the past 500. But do you know the one thing that made all of us different from our ancestors?

“In contrast to ancient times, modern man harbored an unhealthy attitude towards death. This only changed with the Death Machines. If you plucked a Neolithic man from his surroundings and transplanted him here, you could teach him to read or use the telephone. But he would never have understood our former inability to accept death. It’s the reason we kept our armies of psychologists so busy. You saw our morbidity in video games. You also saw it in the heroic measures that doctors took to preserve life. And juxtapose that with the abysmal quality of life that some of those patients experienced afterwards. The hospital was a place of survival more than a place of wellness. Meanwhile, lawmakers wasted fortunes on protecting people from themselves. You saw yourself how, up until ten years ago, those priorities had become a canker, worse than any physical maladies.” I thought about how much our idea of health had changed since the Death Machines appeared. Within that short period, society had recovered from the cancers cataloged by Mr. Seher. It was surprising that I hadn’t noticed it earlier. The human obsession with death, once taken for granted, now felt unmistakably disturbing. “I saw the future myself. We were destined to become paralyzed by extreme caution. Our existences were shadows of what we were capable of. Our trajectory was so misguided that we faced a self-inflicted extinction.”

As Mr. Seher’s ideas filled up the room, the walls looked unreasonably cozy around us. The house had an air of being grateful to shelter this passionate man. I had stopped keeping track of whether we were talking about psychology, politics or religion. Out of generosity, I reminded myself that his rants still made sense to him, if not to me. Besides, I caught the glimmer of a method in this madness.

Mr. Seher continued, “You would think that if one prophesied of great opportunities for people, then they would live better and happier than before. But I observed how that fox, Irony, ensured that the opposite was true. The more natural reaction was to cling harder to life, and appreciate it less. We are a morbid species.

“So the only solution, however improbable, was the opposite. You had to put people face to face with Death. You had to dress him up as a clown, so to speak, and trot him out onstage. Ironically, that showed the foolishness of attempting to beat Death at games. A person holding a death prediction had the chance to defy his neurosis. That’s how we rediscovered the resiliency that makes us so proud. That insight became my masterwork. The inevitability of death was the cause of our sickness, and so it became our vaccination.”

I was unsure whether this argument was a paradox or a hoax. My overactive imagination painted a picture of Mr. Seher as he portrayed himself. He was standing sentry outside his hermitage. Tall black flames raged in all directions, representing the destiny of the world. Mr. Seher took fire in his own hands, and laid it down in a protective ring. “You’re telling me that the Death Machines ward off the fear of death? So if they ever got banned, the result would be a catastrophic regression of our maturity.”

“The machines were only needed as provisional therapy. They could stop working now, and their effect would never diminish. We have had a successful turning point. This is the generation when humanity learned how to confront Death.”

The only thing that would have been more enjoyable is if I had been certain who was laughing at whom. “So to get your plan to work, you remote-controlled machines that could disseminate all the predictions. You ran a kind of perverted factory that supplied Death to the consumer.” At the risk of harassing an innocent man who was trying to spin tales, I challenged him about the technicalities. “Everyone has been trying to figure out how the machines are controlled.”

“An electronic uplink from the machines to the Oracle would have been too obvious. I required something mysterious. If you reverse-engineer a Death Machine, you’ll see that it apparently chooses each word of each message at random.” That much was true. The Death Machines had been dissected down to their smallest components in search of the ghost in the machine. Mr. Seher’s skeletal fingers fumbled for something in his chest pocket. “But probability works in my favor. I’m going to flip this coin. You would say that there’s a 50% chance it will land heads. I, on the other hand, already checked my future, so I say that there’s a 100% chance that it will land heads.” He tossed a penny towards me. Forgive me, but at that moment I surrendered to the delusion that I was conversing with the true creator of the Death Machines. In my fantasy, Mr. Seher’s fingertips were present in every molecule in the air. They manipulated the spinning coin, guiding it to its destiny. When the coin stopped, I studied its face as if it were the key to my future. Heads!

Mr. Seher explained, “Someone who knows all outcomes can see through the probability clouds. When I manufacture a Death Machine, I know its future, including all its test subjects. I can tell whether a machine’s configuration is going to randomly produce all the correct messages. Then I only keep the ones that come up heads exactly when they are supposed to. The failures get recycled. I’m like the zookeeper trying to train an infinite number of monkeys with an infinite number of typewriters. At least one monkey is going to write the script I’m looking for. I handpick that one from among the limitless possibilities. Those choice selections represent the only Death Machines that ever appeared in public.”

I appreciated the fact that it wasn’t necessary to draw blood for the test, so the red spot on your finger only served to remind you of your mortality. But trying to harness a torrent of random chaos was preposterous. “That’s too many interdependent coin flips being done over and over. You can’t get every one right for a machine’s entire future, can you?”

Mr. Seher looked bored with this rebuttal. “The success rate is vanishingly small, I’ll grant. But an average computer can peruse the work of a trillion monkeys per second. Frankly, I’m surprised you think that’s the hard part about constructing a Death Machine.” I knew he was right. My grasp on the distinction between technology and magic was increasingly tenuous.

Mr. Seher treated me to some history. I had noticed that he liked the sound of his own voice. “It’s a modernized interpretation of the age-old practice of consulting the Fates by casting lots. Even the priests in the Old Testament carried two mystical stones. When they needed an answer to a prayer, they picked a stone blindly. The white stone is what we would call heads and the black stone meant tails. You could say it was random, but you could just as soon say that the system assured the correct outcome. One of my private eccentricities is that I consider myself to be an Israelite priest of the digital order.” I imagined Mr. Seher surrounded by roaring fires again, only this time he was wearing a black sacerdotal robe inlaid with blinking lights. From his chest pocket he produced a magical sheet of paper covered with macabre monkeys and coins. He found the coin he wanted and kissed it. The coin danced off the sheet, skyward, where it wound the smoke into a kaleidoscope of colored knots. The fire obeyed the coin and the coin obeyed Mr. Seher. Mr. Seher signed a blessing, transforming the innermost ring of flames into soft-smelling incense.

I reeled my thoughts back down into the room. Mr. Seher warned, “I have all the luxuries of foresight. I can be intensely deliberate. Even this unexceptional-looking house was chosen because of a special future that suits my needs perfectly.

“It’s no accident that the death predictions were vague. If they described the specific circumstances of the future as I saw them, it would only encourage a false sense of control. The ambiguous predictions reminded everyone that Death could visit at any moment. The machine captured that old-world sense of irony in death—captured it and made Irony my servant, in fact. The stronger Irony’s influence was felt in the death predictions, the more extensive was the healing. The time was over for that fox to sabotage my efforts to improve the future.” I sensed Death and Irony’s spectral forms listening at the keyholes of this haunted house. Only the Oracle’s protective strength kept us safe.

“How do you keep up with writing all the prophecies?”

“I was able to start that job decades before I made the Death Machines public. The first ones were the most important because they made the largest impact. But I was no perfectionist. I put far less effort into the last million messages. Whenever someone wasted my time by trying to test a cow, I just wrote it off as, ‘MADE INTO DELICIOUS CHEESEBURGER.'” I knew that wasn’t really true, but he sounded capable of it. Mr. Seher laughed unabashedly. I saw him making zero effort to rein in his merriment. It prompted me to consider whether a prophet should be allowed to joke.

I tried to locate the fine line between genius and madness. Mr. Seher probably wasn’t as lucid as when he was young. Maybe that was even advantageous. In many languages the words for prophesying and raving were the same. The Delphic oracle didn’t attempt predictions until she had inhaled a sufficient amount of the temple’s hallucinogenic vapors. Mr. Seher presumably had access to a pill box full of medications that could serve the same purpose. Great men and women were expected to act crazy, not sober. I saw that my job was not to question, but rather to absorb the unique ideas wafting through the room.

“Did you ever choose a word to describe your own death?”

Mr. Seher slowly massaged his temples. “Everywhere I look, I see the results of my own influence. The future of the world is covered with my fingerprints. Seeing my handiwork in every direction eventually started to repulse me. I want to escape it. And I’m so tired. I’d love to know that life will continue noisily on after I have felt Death’s gentle embrace. My prediction describes exactly how I want to die: ‘FORGOTTEN.'” Mr. Seher commanded such a large, heavy presence that there was barely enough room for both of us, as if I were sharing his coffin, his fate.

He was a mentor who made it possible to look forward to being forgotten. “If I print a news story about you, it will be a poor way to fulfill that wish.”

“You can publish the story if you want. I summoned you for a different reason though.” Had I been summoned? I could no longer recall what brought me here. Mr. Seher reached for the jewelry box on his side table. His fingers faltered when he tried to grasp it. I leaned in and picked it up. It was far lighter than he had made it appear. Mr. Seher strained to lift his arm back into his lap. “I’d like your help. It’s about the twenty-five-year time capsule that your newspaper is sponsoring. I’d like you to please take the Oracle to be included. It still has valuable lessons for you. I guess that succession is the last thing on my bucket list.”

The box felt ordinary against my skin. I studied the ornamental filigree. Engraved in Gothic script was the melodious incantation, “Doctrina et Veritas.” My hand obeyed a subconscious desire to dart forward and open the lid, ignoring all decorum. Inside the box I expected to find the portal to a world untouched by time. Even when I lowered my expectations, I hoped to see an intractable digital device with colored blinking lights. The true contents prompted the pit of my stomach to sink back to earth. An everyday penny lay on a bed of LSD blotters. The only means Mr. Seher had of telling the future was to get high and flip a coin. His grand truths were vulgar drug-induced ravings. He never created anything as noteworthy as a Death Machine. The sudden difference between us was that his mind was addled enough to believe his own story. My cheeks flushed with shame for his misspent, lonely life.

Meanwhile, the magical power that had filled the room was receding. In my peripheral vision I saw the walls acquire an unfamiliar spaciousness. When I noticed Mr. Seher again, I knew instinctively that he was dead. There was nothing in his chair that suggested anything other than peaceful rest. Death and Irony had prevailed, and the hermitage wouldn’t be rid of those spirits without a fiery double exorcism. In the stillness I mourned that Mr. Seher’s tantalizing explanations were not realistic enough to be credible. The curtain had been pulled back on the Death Machines, revealing their inner workings. Then the curtain was pulled back too far, and the conjurer proved to be an entertaining charlatan.

The following day was MOD-Day—the day all the Machines of Death unexpectedly stopped. The news was dominated by speculations why. Pundits briefly debated whether the existing predictions were still valid. My lingering resentment was appeased when I learned that Mr. Seher’s hermitage was destroyed on the same day. It succeeded in getting struck by two bolts of lightning. The firetrap consumed the old man’s entire estate in its metamorphosis from wood to ashes.

I couldn’t condone sending Mr. Seher’s cache of drugs to the future, but part of me still wanted to accommodate his dying request. I decided on a gesture of which I knew he would approve. I resolved to borrow the coin from the box and flip for it: heads to entomb it in the time capsule, tails to dispose of it.

In the chaos of those weeks, my story on Mr. Seher never ran. I guess it would have been possible to resurrect it on a slow news day later on. But life kept interfering. In the end I admit I forgot. Within a few years I was no longer reminded of Mr. Seher at all, even when I reread my own death prediction: “FORGOTTEN.”

Slow and Steady

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A widespread investing myth is the time diversification fallacy–the belief that young people should hold riskier assets than old people. People imagine a young person’s portfolio to be safer than an old person’s because it is somehow protected by time. This idea is a dangerous weed that cannot be easily uprooted. Here are my own arguments against it.

Seed Money

Suppose that the markets have been consistently earning 8% annually. Then one year there is a -50% crash. After that the markets return to their consistent 8% returns. The chart below shows how two investors would fare. Both start with the same $10,000 stake. The first was 20 at the time of the crash and the other was 59.

 

Age Early Crash Late Crash
20 $10,000.00 $10,000.00
21 $5,000.00 $10,800.00
30 $9,995.02 $21,589.25
40 $21,578.51 $46,609.57
50 $46,586.37 $100,626.57
59 $93,126.38 $201,152.98
60 $100,576.49 $100,576.49

The young investor lost half of his equity right away. Fortunately, there was plenty of time to make it back up. In the ensuing years, that portfolio grew by 2,000%. But since the seed money was reduced, the effects of that initial bear market were compounded over the next four decades. The final portfolio value was identical to the portfolio that lost 50% in its final year. Either way, whether the portfolio earns 2,000% first and then loses 50% at the end, or loses 50% at the beginning and then earns 2,000% afterwards, the investor retires with the same $100,000. The technical explanation is that “compounding is commutative.”

If someone advises you that you should hold a straight equity portfolio for the first 20 years of your career and then switch to more reliable bonds for the next 20 years, remind them of commutativity. Explain that your expected return would be the same as if you held the bonds for the first 20 years and then straight equities for the next 20 years. If you are going to change your asset allocation over time, the order of which portfolio you hold first is irrelevant. Young investors should only plan on becoming more conservative over time if they also believe it makes good sense to start conservative and get more aggressive every year until retirement.

Efficient Frontier

This argument is meant to appeal to the mathematicians. Every environment contains an efficient frontier, and the goal of portfolio management is to stay on the frontier. It’s easy to construct one portfolio that is aggressive and one that is conservative, although both are on the frontier. Suppose an investor held each portfolio, one at a time, for a certain number of years. The cumulative risk and return would be equal to the averages of those of the two portfolios. Graphically, the average would be a point midway between the two portfolios. Since the efficient frontier is a convex curve, the average itself would not be on the frontier. The investor’s cumulative lifetime portfolio would not be as efficient as if it had been consistently aggressive, or consistently conservative, or a consistent combination of the two.

Human Capital

An intuitive counter-argument exists. Over a lifetime, most people will save thousands of dollars from their steady income. So if they were to lose all their money at 20 years old, they could still recover by putting aside more savings in the future. A market crash would be more devastating at 60 years old when people can’t produce as much capital. This is a sound objection that ought to be factored into the model.

A young person with $10,000 savings and a $100 monthly savings plan actually commands about $25,000 in assets, if you count the present-day value of the expected savings. The $15,000 of expected savings could be risky, depending on how steady the income is. So the other $10,000 might need to be placed in assets that offset that volatility. If the income is reliable, then the accessible $10,000 could be placed in straight equities as an offset. At retirement, the same person would have $500,000 of investments and no more expected savings. Since the accessible investments are no longer offsetting anything, they would be allocated differently than before.

The human capital argument should not be interpreted to mean that a person’s overall portfolio grows more conservative over time. It means that a rational investor will target a consistent risk profile at all ages. As part of a holistic strategy, the value of human capital should be included in the portfolio. An investor who understands the value of consistency will be able to retire with larger and safer investments.