Thoughts about the markets, automated trading algorithms, artificial intelligence, and lots of other stuff
To those of you with young children, here's a peek into your future.
After years of hard work and your best efforts (OK, mostly your best efforts) …
I p
redict that your adorable bundles of joy will someday wish they could send you this card.
So, take a moment to think about your Mom … and remember that she was very young when she did those things to you …
… and what you make them mean is up to you.
Here's a funny clip from SNL in honor of Mother's Day.
In 2009, Microsoft released a video anticipating the world in 2019. That was only 10 years ago.
I recently showed you how much Social Media has changed in 10 years – so how close was Microsoft's guess?
Watch this video to find out:
The answer is …. not as close as I would have thought. Nonetheless, they just hit a Trillion Dollar market cap. So, they must have gotten something right!
It's interesting to think about which factors or missing innovations caused the difference between their imagined vision and reality.
They really bought into scaleable, HD, transparent, touch screen displays being not only available, but located in everything by now … which suffice to say, isn't the case.
The reality is …
Making everything a device/screen means more opportunity for companies to serve you ads and retarget you ad infinitum.
Ultimately, I find this perceived "modern digital office environment" very inefficient. A lot of these "innovations" are less dynamic and easy to use than their analog counterparts. Mechanical keyboards serve a purpose.
In reality, a lot of the trends we've adopted to increase collaboration and sharing have been counterproductive. Not every office needs an open floor plan – not every team needs 15 subteams with 4 bosses – and using 20 different productivity tools actually decreases productivity.
That being said, we've come a long way in 10 years. Think about the quality of your phone in 2009 or your desktop computer – whirring loudly as it tried to access the disk, or the internet, or anything really.
What we have now isn't perfect – but it's leaps and bounds ahead of where we were. A lot of technology seems like science fiction – like the Babel fish from Hitchhikers Guide to the Galaxy.
Here are some of the posts that caught my eye recently. Hope you find something interesting.
Culture is the character and personality of your organization. It's what makes your business unique and is the sum of its values, traditions, beliefs, interactions, behaviors, and attitudes. - ERC website
Recently, one of the initial investors in Capitalogix became our chief operating officer. He's a man I respect a lot – and who has been a good friend since 2003. His name is Drew Blanchard. He spent 30 years at Accenture and rose into their lofty leadership ranks.
As you might guess, he learned a few things. Here are some of his thoughts about culture.
There are thousands of articles on culture. Most of the themes are similar and I believe many of them can be and are very effective. Linked below are a few articles that I find valuable and their common themes:
Stanford Social Innovation Review: 7 Articles to Improve Your Workplace Culture
Deloitte Insights: From employee experience to human experience: Putting meaning back into work
Grin.com: Importance of Vision, Mission, and Values in Strategic Direction
Stanford Social Innovation Review: When Organizational Change Fails
There are entire teams within some of the largest consulting houses in the world specifically created to help organizations transform their cultures with the intent of increasing company performance at all levels and result in a sustainable competitive advantage.
I believe mastering the following steps will give you the biggest bang for your buck and the fastest return on investing in a winning culture.
Culture is the result of who you are as a company, fueled by the vision and mission of the company as it relates to the employees, the customers, and then the shareholders.
So, why listen to a guy like me? What experience do I have that might be relevant? How could I help, and would it matter? All this really depends on you and your management team’s level of desire to create a high-performance culture at the core of your company with the passion and accountability to accept nothing less!
I spent 30 years working for a company that posted double-digit growth annually, from $10M to $35B in that timeframe. There were two halves of the business model – short term, higher margin work of about 90 days on average and long-term annuity work of 24 months or more with lower, more predictable margins.
Here’s an Accenture Timeline for context.
In the early part of the company’s development, our Mission was, “Helping our client change to be more successful!” Early on, our core values focused on the behaviors of the employees. The expected turnover was high due to perform or leave. The core values were: Integrity, Stewardship, Think Straight, Talk Straight, and Exceed Client Expectations. When we reached $10B we asked ourselves, what would have to happen to double in size and capture market share while maintaining what is already working? The answer was to upgrade the mission and values, focus on results over capabilities, and change the dynamic of performance standards from an individual deliverable to a team deliverable … the new Mission statement? “High Performance. Delivered.”
“High Performance. Delivered.”
Note the simplicity and the standard in three words. The first is High Performance with a period making it a complete standard. The second is linked to the results in that they are Delivered with a period as an expectation and no exceptions.
The values were upgraded to: Best People, Best Clients, Stewardship, Integrity, Teamwork and Innovation. Note that the shareholders are not even mentioned.
We invested in management training as we took on a new workforce – the middle market, not the gifted and driven as in the prior model. It was now up or out. In this Grow or Go model we wanted our best talent to expand and run our long-term business in a role that may last a decade. Our intent was to never leave a client or have a client want to leave us.
This was made possible by two absolute requirements – the first was leadership; putting people first over leaders’ bonuses, and at times taking lower pay to serve clients and grow the business. The second was living the values through how we worked, lived and served clients. No exceptions. If you gave lip service to the mission and/or values as a leader you were asked to leave and as an employee, if you violated our mission and/or values, you were terminated.
Each Managing Director was required to have a leadership presentation on their personal form of living the mission and values. They also had to share it with developing leaders.
Howard has done an exceptional job of placing culture at the center of Capitalogix as an engine for innovation and sustainable growth. Our mission statement? “Create Wealth That Matters”
It is again, impressive in its simplicity. It implies that we’re not selfish in our endeavor for our own wealth. It means we want to do good by our employees, our shareholders, investors, and our community. It means we want to be a good corporate citizen and a lasting company.
Capitalogix values are also paramount in our day to business, and even play a role in the hiring process. It does not matter how gifted a person is, if they do not embody our beliefs, the organization will eventually suffer. We live our values day in and day out. We hire by them, we fire by them, and they’re a part of our employees’ identity as Capitalogix family members.
Find A Way: There is always a best next step; it’s our mission to find it. An answer is not the answer.
Create Breakthroughs: “10x better” is often easier to achieve than “10% better.” It’s about seeing things differently, then making it a reality.
See The Bigger Picture: Scale matters and edges compound, so we always focus on how today’s work fits into tomorrow’s vision.
Raise The Standard: How you do one thing is how you do everything. We strive to continuously improve ourselves professionally and personally. We’re comfortable being uncomfortable.
Learn And Grow: Standing still is moving backward. We pride ourselves on self-evaluation and self-education so that we are better than we were yesterday.
Our business may be unique, but the success equation remains the same:
HIGHLY ENGAGED EMPLOYEE + HIGHLY SATISFIED CUSTOMER = HIGH REWARD FOR SHAREHOLDERS
A company’s mission, vision and core values when focused on the employee in a way that gives them purpose, pride and inspiration are unstoppable when it becomes the very fabric of the company the way leadership lives the brand promise.
Always my best,
Drew
With all the "fake news" and manufactured social buzz, it's hard to identify what technologies are reaching maturity and which ones are fads. Gartner's Hype Cycle attempts to solve that problem.
What's a "Hype Cycle"?
As technology advances, it is human nature to get excited about the possibilities and to get disappointed when those expectations aren't met.
At its core, the Hype Cycle tells us where in the product's timeline we are, and how long it will take the technology to hit maturity. It tells us which will survive the hype have the potential to become a part of our daily life.
Gartner's Hype Cycle Report is a considered analysis of market excitement, maturity, and the benefit of various technologies. It aggregates data and distills more than 2,000 technologies into a succinct, contextually understandable, snapshot of where various emerging technologies sit on the hype cycle.
Here are the five regions of Gartner's Hype Cycle framework:
Understanding this hype cycle framework enables you to ask important questions like "How will these technologies impact my business?" and "Which technologies can I trust to stay relevant in 5 years?"
What's exciting this year?
Currently, people are probably "too" excited about IoT platforms, Deep Learning, and Virtual Assistants. The idea isn't they won't stand the test of the time, but there's an artificial influx of people inflating the adoption numbers. Once the chaff is separated from the wheat – you can expect these to succeed. Autonomous driving, connected homes, and mixed reality have matured past the hype phase.
For comparison, here's my article from last year, and here's my article from 2015. Click the chart below to see a larger version of this year's Hype Cycle.
via Gartner
This year, Gartner organized the 17 highlighted technologies into 5 encompassing trends:
Looking at the overarching trends of this year, it's also fun to look at what technologies are just starting their hype cycle.
Which technologies do you think will survive the hype?
Avengers: Endgame is the last episode in a 22 movie saga. It broke essentially all Box Office records with a $1.2 Billion opening weekend.
Here are some of the posts that caught my eye recently. Hope you find something interesting.
I came across a post from 2009 about social media. 10 years later, with the knowledge of how much data we use today, it's quite a read.
Here it is in its full glory.
Social Media Is Changing Everything: October 18th, 2009
My son won't use e-mail the way I did. So how will people communicate and collaborate in the next wave of communications?
Here is a peek into the difference that is taking hold. I was looking at recent phone use. The numbers you are about to see are from the first 20 days of our current billing cycle.
How can that be? That level of emotional sluttiness makes porn seem downright wholesome.
But, of course, that isn't how he sees it. He is holding many conversations at once. Some are social; some are about the logistics of who, what, when, where and why … some are even about homework. Yet, most don't use full sentences, let alone paragraphs. There is near instant gratification. And, the next generation of business people will consider this normal.
Is social media a fad? Or is it the biggest shift since the Industrial Revolution?
Welcome to the World of Socialnomics. This video has a bunch of interesting statistics … and is fun to watch.
Other Resources:
Social Media Is Changing Everything: April 20th, 2019
Looking at the stats from 2009 is pretty funny
For some context, I looked up the comparative numbers for 2018.
Here's what happens every minute of every day on the internet
via Lori Lewis and Chadd Callahan
A little different than 2009 …
Two months ago, I spoke at IBM's Think 2019 Conference with iOLAP's Chris Jordan. Our talk was Gaining a Financial Edge through Fast Data and Analytics.
The crux of our presentation was that high-performance computing and advanced technology stacks are fundamental to today's trading strategies.
Earlier this week, IBM released a commercial we shot together about how IBM's Integrated Analytics System (IAS) is helping us re-invent hedge funds. Check it out.
via IBM Analytics
Think of it this way:
Each generation of traders finds new ways to play the game and to generate Alpha (the excess return generated by manager skill, rather than luck or excess risk). As soon as enough people adopt a strategy (or figure out a way to combat it), the edge begins to decay.
When computerized data became available, simply understanding how to download and use it generated Alpha. The same could be said for each later evolution: the adoption of complex algorithms, access to massive amounts of clean data, and the adoption of AI strategies.
Each time a new shift happens, traders pivot or fail – it's not that active trading stopped working – it's that the tools and styles necessary to play that game evolved.
We use a similar concept we call "Active Switching". Instead of simply trying to pick stocks or markets, we use advanced technology and techniques to choose markets, techniques, risk levels, and allocation strategies. Further, we use Active Switching to make many decisions, great and small, that together allow us to build portfolios that adjust themselves to changing market conditions.
Playing a New Game
Confusion is the catalyst to most trades. What that means is the ability to parse information … to create a contextual map of meaning and figure out where there's signal and noise … is the new table stakes for playing that game. ~ Howard Getson
Historically, most active traders don't beat the S&P in any given year … and even less beat it with any semblance of consistency. But those that do – the ones that have been doing it for long enough that it's not chance … exercise a willingness (and a skill) to adapt quickly.
One of Charles Darwin's best-known concepts is: It is not the strongest species that survive, nor the most intelligent, but the ones most responsive to change.
While computers have made information accessible to everyone, they've also created a massive asymmetric information advantage for those who have both the access and the skill to best use the massive amounts of data now available. This is more complicated than it seems. You need the information, the technology, the process, and the people. There is so much data available now that figuring out what to ignore is probably more important than what to use. Likewise, the ability to ingest, clean, validate and curate the data is a huge hurdle that most can't clear.
Even with those skills, it's harder than ever to take advantage of inefficiencies (edges) than ever before. The edges are smaller, more fleeting, and surrounded by more volatility and noise. It's like finding a needle in a haystack. That being said – finding a needle in a haystack is easy when you have a metal detector.
That's where A.I. has come in for us. We use A.I. to develop algorithms, to analyze markets, and to create meaning where humans can't find any.
We live in exciting times. Onwards!
Here are some of the posts that caught my eye recently. Hope you find something interesting.
It's a special weekend.
For Jews, it's Passover – the holiday honoring our exodus from Egypt.
For Christians, it's Easter – the holiday honoring Jesus's resurrection.
The overlap can be seen in DaVinci's Last Supper, a Passover Seder, and Jesus's last meal before his crucifixion.
For both, it's a holy and family-centric time. A reminder to appreciate what we have, and how we stand on the shoulders of our ancestors.
One of the memorable phrases from Exodus is when Moses says "Let my people go!" For generations, people assumed he was talking to the Pharoh about his people's freedom. After a week of eating clogging matzoh, matzoh balls, and even fried matzoh … for many Jews "Let my people go" takes on a different meaning.
Hope you celebrated with family, food, and a reverence for all the blessings around you.