Tuesday, October 04, 2005

Heaven Shares

People always ask me how I make money on Wall Street. I always tell them the truth, because I know there ain't no way they're gonna be able to apply it. They're hidebound, conventional thinkers. I can see it in their rheumy eyes. How, you ask? Simple, sport. I exploit inefficiencies in the market through the unflinching application of logic and maximization theory. You find an inefficiency-- usually an unquestioned assumption by the Mandarins of finance-- and you trade the shit out of it until that little inefficiency is flattened, spent, begging for sweet mercy. Then you walk away, strutting like a poppinjay, burnishing your shiny new coins. That's how Warren Buffett gets laid. That's how Billy Beane built the Yankees, Cardinals, Braves, and Orioles.

What's that? I can hear you whining. "Waah, waah, waah. Human interaction doesn't submit to quantitative analysis. People are not deterministic machines. Waah." Hey-- I sympathize. Being a fundamentalist Christian, I, too, believe that Jesus doesn't want to control us. Jesus isn't gonna decide who gets Left Behind. No-- but Jesus wants us to obey probability theory.

That's right. To fulfill the prophecies of the Bible, a certain percentage of us will be doomed to rot in the furnaces of hell on earth when the apocalypse arrives. But how do we avoid that preterite fraction? Don't know about you, but I'm going to apply maximization theory. Where's the highest marginal return? There are plenty of overvalued and undervalued Christian activities out there. The trick is sorting them out and getting there before other would-be heaven-bound assholes.

To begin, you've got to have some metric of success. That's the problem-- we don't know who's been going to heaven. So we need a proxy. Frankly, I can't do any better than being a white Republican man. Can you? So that'll do. Now we just need to correlate variables with our virtue proxy. I'll spare you the details, but using multiple logistic regression (i.e., explaining the log odds of going to heaven as a function of various virtuous activities), I've arrived at some results that may surprise you.

E.g., at the moment, I've got to believe that prisoner abuse is seriously overvalued. It's very hot right now-- as hot as Carlos Beltran was in the free agent market last year-- but it's about as effective as Beltran turned out for the Mets, providing a Heaven Share of only about 0.03. On the other hand, Bill Bennett (the Billy Beane of conservatism) has unearthed a veritable Scott Hatteberg of virtue: hypothetically musing about aborting black fetuses. What's the Heaven Share for this gem? A whopping 7.65. This is only slightly more effective than his previously overlooked tactic of promoting the decay of public schools. Just as Joe Morgan rails at Beane for his unorthodox moves, so do fools on both the right and left attempt to wash their hands of this revolutionary thinker. But me? I just hope everyone else ignores quantitative virtue analysis. I'll wave to them as I ascend to paradise.