On “blindfolded monkeys” and blind tasting
I love graphs like this.
It illustrates, in stark honesty, the multi-year stock performance of the S&P 500 compared with a randomly-selected portfolio that could have been picked “by a blindfolded monkey.”
Those, at least, are the words of the person who wrote the article, “A Random Way to Get Rich,” which appears in a summer, 2014 supplement on “Money” from the Wall Street Journal.
The article’s point—which investment advisors will not like—is that “If your money manager hasn’t managed to beat some random stocks…you might want to start asking some questions.” I don’t suppose it will come as a shock to anyone that managed stock portfolio accounts will, often as not, perform more poorly than a portfolio chosen by, well, a blindfolded monkey. Every time I see those ads on T.V. for companies that will “help you retire with confidence,” a wave of despair washes over me, for I don’t trust these companies any more than I trust, well, a blindfolded monkey. After all, their promises of “security” were completely undone by the Recession. But there is a point to be made here, and that concerns professional wine tasting.
You have heard me say time and time again that the only wine review you should place your trust in is one that was conducted blind (albeit, not by monkeys). This is because of the nature of human psychology. If a financial analyst (I love that term, which conjures up images of brilliant, altruistic M.B.A.s working for no reason other than your financial security) imagines that he or she is being strictly objective in the choice of particular stocks, that M.B.A. ought to take a remedial course in freshman Psych 101. The stock market is, by definition and experience, a place of unpredictability. It is so random, so utterly un-analyzable by any human device yet conceived, that the 1905 description of Brownian motion, by Albert Einstein—for which he won the Nobel Prize, and which went on to become a conceptual base of quantum mechanics—could well apply to market fluctuations.
Randomness, too, characterizes the tasting and reviewing of wine. While wine reviewing may appear to be, or approach being, an exact science, of course it is anything but; and by this, I do not mean to undercut the role of the wine critic, which was a job that paid my bills for many years, and which I thoroughly enjoyed. No, I mean only to suggest that, if you consistently taste wines blind, wrapped in their little brown paper bags, you will find results quite different from those published by the majority of famous magazines and newsletters.
Correction: let me rephrase that. You might or might not find results that might or might not be quite different. In fact, in one parallel universe, if you taste enough wines, blind, for a long enough period of time, at least one of the results will look exactly like any given edition of The Wine Advocate. But an infinitude of other possible results will be different, sometimes only slightly so, sometimes significantly. That is the Heisenbergian truth of random results: they are random precisely because they are unpredictable, an aspect of reality that is hard-wired into the fabric of the universe.
Some conservatives lament theories of the random nature of outcomes. They say that experience proves otherwise—a car, driven at high speed, will not pass through a brick wall, but will smash into it with deadly results, despite the slight relativistic possibility that it will in fact emerge unscathed on the other side. So, these anti-relativists argue, it is ridiculous to think that anything other than our well-understood cause-and-effect universe could be “real,” except, possibly, in some fantastic mathematical sense.
This is true as far as it goes in our macro world of cars and brick walls. It is patently untrue when it comes to the anything-goes micro world of sub-atomic particles. And while the human mind seems neither to be part of the macro world nor of the micro world, it does in fact have more in common with the latter; for it is a “black box” into which others cannot peer, and of which the owner himself may be unaware, in terms of its particulars. Tasting wine openly, with full appreciation of its origin, is in fact contamination of the black box’s insides: you cannot do it without discombobulating the entire process. Thus, you cannot call open tasting “real,” since it represents a serious interference with the reality of what a wine actually tastes like. In the famous thought experiment called Schrodinger’s cat, one is confronted with a paradox: “This poses [says Wikipedia] the question of when exactly quantum superposition ends and reality collapses into one possibility or the other.” Open tasting illustrates this paradox: It is utterly impossible for the outsider to know, or even to begin to comprehend, what the thought process was of the reviewer, whose mentation may (or may not) have been influenced by any one, or combination of, multiple factors. Therefore, one cannot say that the reviewer’s conclusion is “real,” except within limits, and even then subject to faith and belief. One can accept the conclusion—it may influence one’s own conclusions and behavior—but one cannot assume that the conclusion itself has validity, at least in the scientific sense of being replicable.
Should therefore we entrust our wine reviewing to “a blindfolded monkey” or indeed a team of blindfolded monkeys? No; that would be a logical fallacy. But the realization that a random portfolio of stocks outperforms the S&P 500, which is the basis of so many mutual fund portfolios, should alert us to the fact that winetasting results from open tastings may also not be the best source of information; and this in turn should put the results of any such tasting into perspective. This is a revolutionary statement: if everyone subscribed to it—tastemakers, gatekeepers, consumers, producers, the media—the wine world as we know it would turn completely upside down. Nobody likes disruption, though, which is why the status quo is unlikely to change anytime soon, despite the burgeoning presence of Millennials who, it is said, are going to upset every apple cart there is. They should, in the case of formal wine reviewing; but they are unlikely to, because (speaking of apple carts), the fruit never falls far from the tree; each Millennial is more like his or her mother or father than one may care to admit. Still, go back and take another look at the chart. If instead of AAPL, CAT, XOM and NFLX you substituted Lafite, Romanée-Conti, Yquem and Screaming Eagle, would that cause you to reconsider your reliance on professional critics, now that you understand how perfectly random these things are?