In trading, the holding period (or "time in trade") is shrinking. Consequently, there is less focus on predicting markets ... and more focus on determining which techniques are making money most predictably.
Markets are not the same as the economy ... and on a macro scale, it is possible to understand and predict the major forces shaping our global economy.
Jeff Desjardins, of the Visual Capitalist, recently highlighted some of the major forces that are changing our global economy. Here is a summary.
The Tech Invasion ... and its Accelerating Progress
If you were to look at the biggest companies globally - almost all of them are in tech. Fifty years ago, the largest companies were in commodities (like oil, steel, etc.). Even 5 years ago, the biggest companies were widely "goods" centric.
But it's more than just the biggest companies. We're experiencing a technological revolution in many subspaces - AI, 3D printing, gene editing, quantum computing, etc.
Yet, for all the change and disruption we've experienced until today - understand that it is going to get faster, and more pronounced, in the future.
And, it isn't just the tech that is new. The pace of its adoption across industries is a game-changer as well.
We are at a point where new technology often gets released before the previous iteration can fully take hold and mature.
It is not just trading that is getting faster, product cycles are compressing, and foundational technologies are disrupted and replaced (or made obsolete) faster than ever as well.
Even global adoption cycles have become viral and near instantaneous. Think about how fast Pokemon Go (AR) got adopted, or new Smartphones became mainstream.
The Evolution of Money, a Changing Wealth Landscape, ... and China
Money's definition is changing. Cash is becoming less common (with the increasing use of credit cards, electronic payments, and payment services like Paypal, Venmo, and ApplePay). In addition, the public has maintained its interest in cryptocurrencies.
Ultimately, our perception of money may radically change how global economies work.
On top of that, money is changing hands, the ultra-wealthy are from different industries than before, and the wealthiest countries & companies widely influence politics.
Consider the economic rise of China. Even though we've been watching China grow for decades, the scope of its population and economic impact can still be difficult to understand. China has over 100 cities with more than 1,000,000 inhabitants. Even scarier, perhaps, is that China now has more honor students than we have students.
Conclusion
Obviously, the global economy is changing. To see more about the eight forces shaping it, read this.
I've recently been spending more time with economists, while we're not always on the same page when it comes to the interplay with trading, I still find economics interesting.
Trump's impact on global trade and politics will also be interesting to quantify.
Take a look at the world economy divided by region (Mexico is part of Latin America for the sake of this graphic).
Russia probably has the biggest disparity between GDP and land mass.
This doesn't tell us anything about economic growth, would be interesting to compare this five years ago, and five years from now.
Global GDP isn't zero-sum, so this circle can theoretically grow.
Top 3 economies were the U.S., China, and then Japan (with a large drop between each economy).
The top 4 countries account for over 50% of GDP.
It will be interesting to see the way Trump's tariffs will affect the world. There are potentially hundreds of billions in annual revenue that would be affected.
I spent this weekend at Genius Network's Annual Event ... it's a great event with industry leaders, specialists, and apparently, the Grandfather of Shock Rock (basically heavy metal with highly theatrical live shows), Alice Cooper.
He is famous for the extravagant staging of his shows. He is a showman ... with dramatic outfits, makeup, and attention getters like guillotines, snakes, and live sword combat.
This week, he talked about his history, his success, and what made him different than those around him. The answer may surprise you. Check it out.
"If you don't bake the cake, you can't puticing on it ... you have to have the music before you can put on the theatrics"
A lot of today's common marketing/business wisdom is focused on creating your own space, and how to position yourself differently than your competitors. That's something Alice Cooper did very well.
That wisdom skips over the most important step ... you have to have a kick-ass product. Music, sports, business, it's all the same game; can you outwork, outperform, outgive your competitors?
If you want to be a leader in your space or even just a lasting name, it comes from honing your craft and having a better offer.
It seems like common sense, but as we all know, common sense isn't always common.
It was the same when I helped coach my youngest son in Football. When he started, I only let him focus on his footwork. Once he had his footwork down we could focus on his hand position. Once his hand position was habitual, he could focus on his playbook. Once he knew the plays and how they changed his role, we finally focused on how to do extra, and differentiate himself from his teammates and his rivals.
It's the same in your business or your marriage. It's great when you can focus on the embellishments and displays. First, however, you need to master the basics.
October has been tough on equity markets this year.
For example, the S&P 500 opened to a sea of red this past early last week.
McDonald's was one of the few green spots on that heat map. Which reminds me, Mickey D's is becoming a little more modern by adding online and touchscreen ordering.
For some context, the S&P is on pace for it's worst sell-off since 2010 ... while the NASDAQ hasn't been hit like this since post-Lehman in 2008.
Is it a correction or a blip?
Historically, midterm elections inspire uncertainty among investors that dissipates quickly as soon as they're over. Once that uncertainty is resolved, the S&P gains an average of 31% the following year.
Markets exist to trade ... and confusion is a primary catalyst. As such, many people believe the market will rally ... while others believe that the traditional midterm effect could be blunted.
For all the confusion in today's society, it's good to see that some things don't change.
The process doesn't work properly if you don't vote.
Gandhi once said “Be the change you wish to see in the world." This wasn't exactly what he meant … nevertheless, one of ways you can impact the world is by impacting the choice of its leaders.
I have friends on both sides of the political spectrum, and I hear complaints from both sides. The one thing we all can agree upon is that not enough people (who claim to care) actually get out and vote.
It is one thing to whine about the status quo … It is quite another get up get out and do something about it.
Combat fake news and media sensationalism by doing some research choosing candidates you think will leave us better than they found us.
If you're not sure if you're registered to vote, check here. If you're not sure where your polling location is, check here.
Eight Major Forces Shaping Our Global Economy
In trading, the holding period (or "time in trade") is shrinking. Consequently, there is less focus on predicting markets ... and more focus on determining which techniques are making money most predictably.
Markets are not the same as the economy ... and on a macro scale, it is possible to understand and predict the major forces shaping our global economy.
Jeff Desjardins, of the Visual Capitalist, recently highlighted some of the major forces that are changing our global economy. Here is a summary.
The Tech Invasion ... and its Accelerating Progress
If you were to look at the biggest companies globally - almost all of them are in tech. Fifty years ago, the largest companies were in commodities (like oil, steel, etc.). Even 5 years ago, the biggest companies were widely "goods" centric.
But it's more than just the biggest companies. We're experiencing a technological revolution in many subspaces - AI, 3D printing, gene editing, quantum computing, etc.
Yet, for all the change and disruption we've experienced until today - understand that it is going to get faster, and more pronounced, in the future.
And, it isn't just the tech that is new. The pace of its adoption across industries is a game-changer as well.
via Visual Capitalist
We are at a point where new technology often gets released before the previous iteration can fully take hold and mature.
It is not just trading that is getting faster, product cycles are compressing, and foundational technologies are disrupted and replaced (or made obsolete) faster than ever as well.
Even global adoption cycles have become viral and near instantaneous. Think about how fast Pokemon Go (AR) got adopted, or new Smartphones became mainstream.
The Evolution of Money, a Changing Wealth Landscape, ... and China
Money's definition is changing. Cash is becoming less common (with the increasing use of credit cards, electronic payments, and payment services like Paypal, Venmo, and ApplePay). In addition, the public has maintained its interest in cryptocurrencies.
Ultimately, our perception of money may radically change how global economies work.
On top of that, money is changing hands, the ultra-wealthy are from different industries than before, and the wealthiest countries & companies widely influence politics.
Consider the economic rise of China. Even though we've been watching China grow for decades, the scope of its population and economic impact can still be difficult to understand. China has over 100 cities with more than 1,000,000 inhabitants. Even scarier, perhaps, is that China now has more honor students than we have students.
Conclusion
Obviously, the global economy is changing. To see more about the eight forces shaping it, read this.
We live in interesting times.
Onwards.
Posted at 06:52 PM in Business, Current Affairs, Gadgets, Ideas, Market Commentary, Science, Trading, Trading Tools, Web/Tech | Permalink | Comments (0)
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