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Freeman Dyson, How We Know, March 10, 2011

“In the twentieth century, genomes of humans and other species were laboriously decoded and translated into sequences of letters in computer memories. The decoding and translation became cheaper and faster as time went on, the price decreasing and the speed increasing according to Moore’s Law. The first human genome took fifteen years to decode and cost about a billion dollars. Now a human genome can be decoded in a few weeks and costs a few thousand dollars. Around the year 2000, a turning point was reached, when it became cheaper to produce genetic information than to understand it. Now we can pass a piece of human DNA through a machine and rapidly read out the genetic information, but we cannot read out the meaning of the information. We shall not fully understand the information until we understand in detail the processes of embryonic development that the DNA orchestrated to make us what we are.

A similar turning point was reached about the same time in the science of astronomy. Telescopes and spacecraft have evolved slowly, but cameras and optical data processors have evolved fast. Modern sky-survey projects collect data from huge areas of sky and produce databases with accurate information about billions of objects. Astronomers without access to large instruments can make discoveries by mining the databases instead of observing the sky. Big databases have caused similar revolutions in other sciences such as biochemistry and ecology.

The explosive growth of information in our human society is a part of the slower growth of ordered structures in the evolution of life as a whole. Life has for billions of years been evolving with organisms and ecosystems embodying increasing amounts of information. The evolution of life is a part of the evolution of the universe, which also evolves with increasing amounts of information embodied in ordered structures, galaxies and stars and planetary systems. In the living and in the nonliving world, we see a growth of order, starting from the featureless and uniform gas of the early universe and producing the magnificent diversity of weird objects that we see in the sky and in the rain forest. Everywhere around us, wherever we look, we see evidence of increasing order and increasing information. The technology arising from Shannon’s discoveries is only a local acceleration of the natural growth of information.

The quote above is taken from Dysons review of James Gleick’s  The Information: A History, a Theory, a Flood

It is an apt quote for traders simply because trading is an information management profession and the amount of information we have to manage is becoming a torrent that can easily overwhelm decision making. For example when I was a broker we didn’t have easy access to overnight figures – it was someone’s job to get up early and watch or record on their VCR the old morning business show with Michael Pascoe and then relay those overnight figures to the dealers. Now I  simply fire up the old gogglebox and every market in the world is at my finger tips. If I want I can find out what the leading stocks in friggen Iceland are with only a few clicks.

For me this is the most pertinent part of the quote –

Now we can pass a piece of human DNA through a machine and rapidly read out the genetic information, but we cannot read out the meaning of the information

Traders are the same we simply dont know what all the information we receive means within the wider scope of things – humans are fairly simple processing machines most of the time. We evolved to walk around the savannah for long distances, occasionally run after things (or runaway from things) and pick up and carry stuff. Which by the way is pretty much the secret to weight loss for any fattys out there.

Whilst we have created our technology we have not evolved with it.

I feel we therefore have a need to remove ourselves from the information and some degree the technology if we are to make sense of what inputs we are receiving.


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