 Hey guys, it's MJ the student's act tree and it's Friday night here in South Africa And I thought what better way to spend the evening than by reading through some academic papers and this one really caught my eye It's the economic mind of Chol Sanders purse now Chol Sanders purse is an absolute legend Go check him out on Wikipedia. Just look at his accomplishments. They are incredible But the reason why I want to or I'm sharing this video with you guys is because of this statement He makes here each of us is an insurance company So I was reading the you know the little paper so I'm just gonna Go through quickly like this Quite interesting. He talks about the utility theory curve Which is interesting for those of you studying subject ct8 So, yeah, he's got a bit of a different view than jevon I don't know you pronounce that guy's name But anyway, sorry I just want to scroll down to the part that really got my interest Um, sorry if I'm just making anybody sick Wait, wait, here we go. It's coming up now Here we go Pierce's stochastic view of the individual Okay, that that is very interesting and and what this Academic paper talks about it talks about how Pierce is the first person to have a stochastic view on the individual And talks about how, you know, he's reading up on all of these guys stuff here But he starts talking about how, you know, the world is stochastic how it's random, you know, how Before, you know economists were making assumptions based on a stable currency And they're doing this and they're doing that But pierce comes in with his applied calculus and he does some really cool things And one of the things that that really got to pierce was insurance companies. He loved them He loved talking about insurance companies. He figured out how to optimize their profits and He writes something here, uh, which I've actually posted on the The facebook group. So if you follow me on facebook, which is south african Actual students, you'll see that I've just posted this and what this is basically saying is that Actories are always wrong, uh, you know, we can never Know the truth, but only in the long run. We approximate the truth So we're always wrong, but we're right on average because our errors balance one another out And this is what happens with insurance companies, you know, they don't know what's going to happen to each individual policy holder But they know what's going to happen in the long run So they don't know who's going to die or who's going to crash their car But they know five people are going to die and seven people are going to crash their car You know, they know more the specifics rather than the actual details But what was very interesting in in reading this now, this is coming. I mean 1869. This is back in the day Is when he says this each of us is an insurance company And this is something that no other economist I don't even think economists do this. Um now is that they consider our decision theory to be Stochastic, you know, have a little bit of that random element to it and What's so cool is to hear PS sorry purse talking about Risk and all this type of stuff that we have to deal with Back in 1869. I mean, this is this is before ruin theory had been developed. This was before You know, computers had been developed to help with Monte Carlo simulations Uh and all this type of stuff. I mean, I have been like, so I'm a big fan of purse And I have been reading some of his other stuff where he does talk a lot about, you know, stochastic Not not necessarily stochastic calculus, but but you know the stuff behind The you know the the whole theory behind the modeling and techniques that we would later use on computers So, yeah, I just think it's really cool how we've got this this forgotten genius Taking such an interest in insurance and probability And really like just looking at it from a different angle. I mean Um, I don't know exactly where it says it But it talks about how how purse took on a different view of economics So his name is Charles Sanders purse. I was for a long time calling him Charles Sanders Pierce Because I was getting the i and the e mixed up But this guy is very very cool. I mean when you read his stuff, he basically invents the hypothesis testing Which is pretty awesome. I mean, um, you know, like he talks about, you know, the only way to find the facts in certain cases Is through sampling and he talks about Um, you know a guess at the riddle and it's it's amazing the statistics that this guy knew before The statistics only supposed to came about, uh, you know, what we read about in our textbooks So like I said, check out his wikipedia page because there's so many cool things that he did um, there's even one, um theory that That he came up with the idea on how to make a computer how he said you can use electricity To solve binary and boolean, um, operations. He did a lot of stuff on infinite numbers Um, he he figured out how to take the the earth, you know, like as a sphere And project the sphere's surface area onto a perfect square and it's called some quintental Something projection. I mean, it's really cool. Um, he did a lot of awesome stuff You know, here we see him talking about the p-value and you know probabilities And it just really really is Really cool and it's quite nice to read Um, papers on on trolls because when you try and take on trolls, you know head on I'm I'm not at a an intelligence level to to match him I can't, you know, I battle to follow exactly what what are you saying? Most of the cases so it's really nice to get these academic papers Where it's other people who have read him and then they explain it in, you know, more simple English for me to understand But go check out this guy. He is an absolute legend I mean, it's Friday night. I mean, what better thing to do than to stay up all night and reading up on this absolutely Incredible genius. Anyway, that's what I've got time for. Hopefully my internet is working so I can upload this video It's one of the things about living in South Africa is that we don't always have A steady flow of internet, but hopefully this video will be coming up to you tonight Otherwise, you'll probably be getting it on Saturday morning. Just guys and yeah, just a quick little update I am still going to be making videos on finance. Still going to be doing everything Life is a little bit hectic. I'm actually doing a TED talk On Charles Sanders purse hence why I'm doing a lot of this reading a lot of this research So that is taking up a lot of my time and, you know, some exams popping up But once that's done, we're going to hit back into the finance videos and back into the videos that you guys want to see But I just thought this is so cool. I had to share it with you guys. So I hope you enjoyed it Um, and y'all. I'll see you guys next time. Cheers