Thoughts about the markets, automated trading algorithms, artificial intelligence, and lots of other stuff

  • A Breath of Fresh Air

    Do gadgets that help you focus on conscious breathing work?  I found three that worked for me: Resperate, Helicor's StressEraser, and Heart Math's emWave.

    My biggest complaint is that once I learned the relaxation techniques each of these devices teach,  I didn't need the device to get the results.  That also is a positive, isn't it?

    I think, feel, and communicate better when I'm calm.  Learning to access that state at will is an important skill … in business and personal life. 

    So, with that in mind, here are my impressions and experience with each.

    090403 Resperate
    Resperate
    .

    The Resperate unit is a little bigger than a portable CD-ROM player, with a built-in elastic strap that goes around your ribcage to monitor your breathing.  The concept behind this tool is very simple.  It relaxes you by helping you slow your breathing down. 

    Resperate starts by pacing your in-and-out breaths with higher and lower pitched sound cues.  Over time it moves these tones farther apart, leading you to breathe slower and more deeply.

    How did it work?  It helped me move easily from 6 to 10 breaths-per-minute, down to two or three breaths-per-minute.  This promotes much deeper breathing and relaxes the body and mind.  I find that I enjoy using this tool for about 10-minutes at a time; and I definitely feel relaxed after using it.  

    While Resperate provided the most relaxation, it is the one I use least.  Perhaps because it is a little bigger and requires the belt.  Not big hurdles; but apparently big enough.

    090403 StressEraser
    Helicor's StressEraser

    The StressEraser is a portable biofeedback device, smaller than a deck of cards.  On the top, there is a hinged slot to put your finger.  The finger reader measures your pulse and galvanic skin response. There is also an LED screen on this device that helps you pace your breathing, and shows your level of stress or relaxation.

    Without focusing, the line is erratic and jagged.

    However, with only a little bit of training, it's easy to create a very smooth sign wave that indicates a steady breathing and a healthy heart rate pattern.

    With this tool, I get the best (most relaxing) results with an
    in-breath of about five seconds and an out-breath of about the same length. I like doing this for five minutes or so; it is a nice break in the middle of the day, before an important phone call, or a decision-making session. 

    I
    find that it
    helps me focus. Of the three tools, this is the one I find myself using most often.  This might be because I like the graph and how it gives me instantaneous feedback about my breathing and focus.

    090403 emWave
    HeartMath's emWave
    .

    This is the smallest of the tools.  The emWave relies on either a thumb sensor or, my preference, a clip that attaches to your earlobe. The technique is very similar to what you learn with the StressEraser. It involves steady breathing and a focus on reducing heart beat variability.  It has four levels of challenge.

    It sounds strange, and I don't claim to understand the science behind it, however focusing your attention on your heart while doing the breathing exercise seems to make a difference.  Somehow, when you focus your attention on your heart, that is when the machine changes color to indicate that there is "coherence". And, in my experience, this is the most relaxing part of the exercise. More coherence equals less stress.

    I tend to use this tool less than five minutes at a time to feel calm and refreshed.  It was also the easiest for me to have success with (in this case, to get the "green light" to come on).  So, the emWave is the smallest, easiest and quickest of the three … and it works.  I'm going to use this more often.

    So why did I use one that is more challenging?  Habit, or perhaps that defines part of the reason I need to relax?

  • How To Type More Accurately and Much Faster With Asutype

    090327 Asutype
    I'm surprised by how much of my typing is now done outside of
    traditional e-mail or business software (like Microsoft Word). Instead,
    my typing is done in web-based applications like my blog, Facebook, or
    Twitter. That's where a program like Asutype really shines.

    I have been using a very effective spell-checking and text expansion program for several years now. It works so well that I forget it's there, even though it automatically fixes most of my typing errors and makes it easy for me to enter repetitive phrases or pieces of information.  The bottom-line is that it helps me type more accurately and much faster.

    There are three basic ways to use the software.

    1. Correct Mistakes Interactively. The first is an interactive spell checker that works as you type (hence the name "Asutype"). When you type something that isn't in its dictionaries, it pops up a correction box with several of the most likely replacement candidates. This provides a quick and easy way to fix your spelling without having to retype anything.
      090327 Asutype Correction
    2. Correct Repetitive Mistakes Automatically. The software also keeps track of the mistakes you make as well as the corrections that you apply and allows you to create a list of automatic entries. From time-to-time I'll review the list of corrections and choose to add them to my permanent list. When I do that, then next time I mistype that word or phrase, the software automatically fixes it (without even asking). This means I type much quicker because most of my typing mistakes are repetitive and that means I make them consistently). I'm actually surprised by how many different ways I could misspell certain words. It's not so much that I don't know how to spell them, it's that my fingers don't do the right thing when I'm trying to type quickly or get distracted.
      090327 Asutype Correction List

    3. Automate Repetitive Typing.  The software also has some very powerful text expansion capabilities. I think of them almost as abbreviations or shortcuts. There are certain words or phrases that I type often (examples include: Capitalogix, our web address, or phrase like "please contact me if you have questions or comments".). Another example might be to use the abbreviation "VTY", which could expand to "very truly yours" …  and then your signature block.

    You never have a second chance to make a first impression, so I'm glad that Asutype helps me seem like a good speller. Here are the links for you to find out more information or to download a trial copy yourself. I don't have anything to do with the company other than I'm a happy user. I've had my license for years, and I can vouch for their service, support, and the good experience that I've had with their tool. I hope you like it too.

  • How To Type More Accurately and Much Faster With Asutype

    090327 Asutype
    I'm surprised by how much of my typing is now done outside of
    traditional e-mail or business software (like Microsoft Word). Instead,
    my typing is done in web-based applications like my blog, Facebook, or
    Twitter. That's where a program like Asutype really shines.

    I have been using a very effective spell-checking and text expansion program for several years now. It works so well that I forget it's there, even though it automatically fixes most of my typing errors and makes it easy for me to enter repetitive phrases or pieces of information.  The bottom-line is that it helps me type more accurately and much faster.

    There are three basic ways to use the software.

    1. Correct Mistakes Interactively. The first is an interactive spell checker that works as you type (hence the name "Asutype"). When you type something that isn't in its dictionaries, it pops up a correction box with several of the most likely replacement candidates. This provides a quick and easy way to fix your spelling without having to retype anything.
      090327 Asutype Correction
    2. Correct Repetitive Mistakes Automatically. The software also keeps track of the mistakes you make as well as the corrections that you apply and allows you to create a list of automatic entries. From time-to-time I'll review the list of corrections and choose to add them to my permanent list. When I do that, then next time I mistype that word or phrase, the software automatically fixes it (without even asking). This means I type much quicker because most of my typing mistakes are repetitive and that means I make them consistently). I'm actually surprised by how many different ways I could misspell certain words. It's not so much that I don't know how to spell them, it's that my fingers don't do the right thing when I'm trying to type quickly or get distracted.
      090327 Asutype Correction List

    3. Automate Repetitive Typing.  The software also has some very powerful text expansion capabilities. I think of them almost as abbreviations or shortcuts. There are certain words or phrases that I type often (examples include: Capitalogix, our web address, or phrase like "please contact me if you have questions or comments".). Another example might be to use the abbreviation "VTY", which could expand to "very truly yours" …  and then your signature block.

    You never have a second chance to make a first impression, so I'm glad that Asutype helps me seem like a good speller. Here are the links for you to find out more information or to download a trial copy yourself. I don't have anything to do with the company other than I'm a happy user. I've had my license for years, and I can vouch for their service, support, and the good experience that I've had with their tool. I hope you like it too.

  • Capitalogix Commentary 03/27/09

    090327 Bear Market Rally Compared to Others
    All Revved-up and No Place to Go
    .

    We just saw a 24% rally unfold in a little over two weeks. But a rally like that doesn't make too many people happy. For most, this is where fear and greed collide.

    Prudence dictates that position size and risk should stay small while in a serious long-term downtrend, especially with a stock like Citibank recently trading under a dollar. Yet a rally that big and steep often makes people feel like they should have been in the market, and wish they would've traded "this, that, or the other" stock or sector that they noticed a week or two ago.

    Don't Worry, This Little Bit of Mind Control Won't Hurt A Bit …

    This week I saw several news reports using the phrase "The Great Recession". This might be part of an interesting strategy on the part of the International Monetary Fund, which used that phrase a few weeks ago. Naming something gives you control over it (or at least the appearance of control over it). And "Recession" sounds so much less severe than "Depression". If you can just get people to adopt that phrase, it might give them enough hope that you actually avoid a depression? But just as it's hard to call a recession until you're well into it, I think it's pretty hard to tell whether you come out of it than till you're actually out of it. Still, it is a nice try.

    Likewise, I have been impressed by how the administration has played the financial crisis lately. There seem to be some sound ideas, talked about in ways that make sense to the public, which get announced at strategic times. Moreover, it seems to be working; and the market looks like it's responding.

    090327 Sons of Frankenstein Re-Animating the Banking System

    However, the key word there might be "looks". I'm certainly not convinced that the worst is over yet.

    Where Are We in the Cycle?

    A few weeks ago I noted the spread between smart money confidence and retail investor pessimism was at levels that often indicated short or intermediate-term bottoms. In hindsight it worked again, and there was a pretty sizable rally. However, retail traders are becoming confident again, too quickly for my taste.  And the spread is no longer significant.  So I don't see an edge there at this point.

    I don't believe this is the end of the bottom. Instead, I hope this is the beginning of the bottoming process. My sense is that there are many businesses hanging on by a fingernail, or sheer will. Some of them are getting tired, others are running out of money, while still others are finding it hard to sell something in this environment. The point is that I suspect we're due for another round of culling the herd. That's not necessarily a bad thing, either.

    090327 Evil_kniev-quad-form Chart Joke

    What I'll be looking for, this time, is that I think we'll see a number of deals get done as prices get lower again. The companies that are going to survive, the companies that are going to thrive, the companies that are going to become new leaders in this next phase of our economy are going to start moving forward again.

    Business Posts Moving the Markets that I Found Interesting This Week:

    • Bears Are Wary as Bull Returns – Dow Up 21% in 13 Days. (WSJ)
    • Is it safe to go back in the water? Best to figure out what went wrong first. (Andy Kessler)
    • US economy falls 6.3% in fourth quarter; fastest rate since 1982. (Financial Times)
    • Explanation of the Fed's $1.1 Trillion Public-Private Investment Program. (The Big Picture)
    • More Posts Moving the Markets (My List)

    Lighter Ideas and Fun Links that I Found Interesting This Week

    • Friedman: What Distinguishes the Best Leaders, is that they learn from crashes. (NYTimes)
    • Mind Control Goes Mainstream – Gadget offer working digital telekinesis. (Forbes)
    • Growing-up Online Shapes Work Expectations of the Facebook Generation. (Gary Hamel)
    • Nice Introduction to Twitter Use and Best Practices. (Twitips)
    • More Posts with Lighter Ideas and Fun Links (My List)
  • Capitalogix Commentary 03/27/09

    090327 Bear Market Rally Compared to Others
    All Revved-up and No Place to Go
    .

    We just saw a 24% rally unfold in a little over two weeks. But a rally like that doesn't make too many people happy. For most, this is where fear and greed collide.

    Prudence dictates that position size and risk should stay small while in a serious long-term downtrend, especially with a stock like Citibank recently trading under a dollar. Yet a rally that big and steep often makes people feel like they should have been in the market, and wish they would've traded "this, that, or the other" stock or sector that they noticed a week or two ago.

    Don't Worry, This Little Bit of Mind Control Won't Hurt A Bit …

    This week I saw several news reports using the phrase "The Great Recession". This might be part of an interesting strategy on the part of the International Monetary Fund, which used that phrase a few weeks ago. Naming something gives you control over it (or at least the appearance of control over it). And "Recession" sounds so much less severe than "Depression". If you can just get people to adopt that phrase, it might give them enough hope that you actually avoid a depression? But just as it's hard to call a recession until you're well into it, I think it's pretty hard to tell whether you come out of it than till you're actually out of it. Still, it is a nice try.

    Likewise, I have been impressed by how the administration has played the financial crisis lately. There seem to be some sound ideas, talked about in ways that make sense to the public, which get announced at strategic times. Moreover, it seems to be working; and the market looks like it's responding.

    090327 Sons of Frankenstein Re-Animating the Banking System

    However, the key word there might be "looks". I'm certainly not convinced that the worst is over yet.

    Where Are We in the Cycle?

    A few weeks ago I noted the spread between smart money confidence and retail investor pessimism was at levels that often indicated short or intermediate-term bottoms. In hindsight it worked again, and there was a pretty sizable rally. However, retail traders are becoming confident again, too quickly for my taste.  And the spread is no longer significant.  So I don't see an edge there at this point.

    I don't believe this is the end of the bottom. Instead, I hope this is the beginning of the bottoming process. My sense is that there are many businesses hanging on by a fingernail, or sheer will. Some of them are getting tired, others are running out of money, while still others are finding it hard to sell something in this environment. The point is that I suspect we're due for another round of culling the herd. That's not necessarily a bad thing, either.

    090327 Evil_kniev-quad-form Chart Joke

    What I'll be looking for, this time, is that I think we'll see a number of deals get done as prices get lower again. The companies that are going to survive, the companies that are going to thrive, the companies that are going to become new leaders in this next phase of our economy are going to start moving forward again.

    Business Posts Moving the Markets that I Found Interesting This Week:

    • Bears Are Wary as Bull Returns – Dow Up 21% in 13 Days. (WSJ)
    • Is it safe to go back in the water? Best to figure out what went wrong first. (Andy Kessler)
    • US economy falls 6.3% in fourth quarter; fastest rate since 1982. (Financial Times)
    • Explanation of the Fed's $1.1 Trillion Public-Private Investment Program. (The Big Picture)
    • More Posts Moving the Markets (My List)

    Lighter Ideas and Fun Links that I Found Interesting This Week

    • Friedman: What Distinguishes the Best Leaders, is that they learn from crashes. (NYTimes)
    • Mind Control Goes Mainstream – Gadget offer working digital telekinesis. (Forbes)
    • Growing-up Online Shapes Work Expectations of the Facebook Generation. (Gary Hamel)
    • Nice Introduction to Twitter Use and Best Practices. (Twitips)
    • More Posts with Lighter Ideas and Fun Links (My List)
  • Visualizing Walmart’s Growth

    Chances are this will give you a different perspective on their impressive land-grab and expansion.

    There are three simple reasons I'm looking at Walmart.  Tough economic times have Americans looking to save money.  Proximity is power.  And that means most Americans don't have to look far to find a Walmart.  So I'll be watching how they do.

    Data visualization is an important tool in trading.  Sometimes work skills carry-over into personal life.  Watching stuff like this interests me.  Not sure if that means my hobby is part of my work, or if work is part of my hobby.

    Click the image below to watch Walmart's Growth.

    080815 Walmart's Growth Map

    Click here to check-out FlowingData.  I've found several interesting posts on that site.

    Also, here is more info about Walmart from FinViz and StockTwits.

  • Visualizing Walmart’s Growth

    Chances are this will give you a different perspective on their impressive land-grab and expansion.

    There are three simple reasons I'm looking at Walmart.  Tough economic times have Americans looking to save money.  Proximity is power.  And that means most Americans don't have to look far to find a Walmart.  So I'll be watching how they do.

    Data visualization is an important tool in trading.  Sometimes work skills carry-over into personal life.  Watching stuff like this interests me.  Not sure if that means my hobby is part of my work, or if work is part of my hobby.

    Click the image below to watch Walmart's Growth.

    080815 Walmart's Growth Map

    Click here to check-out FlowingData.  I've found several interesting posts on that site.

    Also, here is more info about Walmart from FinViz and StockTwits.

  • What I Love Best About the Kindle, Amazon Took From Vegas.

    Disruptive Technology:

    090306 Tivo Logo I
    remember the first time I used TiVo. I instantly knew it was a
    disruptive technology that would change how people watch TV. It's even
    better than I thought I was. That doesn't mean it was a great
    investment in the stock market; but it was a terrific investment in the
    household.

    And the ripples of this technology are still being felt
    whether you're using TiVo or some other digital video recorder.

    The Kindle is a Disruptive Technology Well-Placed In the Consumer Adoption Cycle:

    Using
    a Kindle reminds me of the first time I used TiVo. Only this might be
    different, because we're several generations of technology further
    along. And the world is ready for it.

    The
    Kindle 2 is ergonomic and reasonably fast. It is a great way to read. 
    It also has a built-in Internet connection, which means you have access
    to content virtually anywhere. And it just so happens that the content
    you want is the content Amazon sells.

    Chances are you already go to Amazon's website.  Because of
    economies of scale, not only do they have a bigger inventory, they have
    a bigger community of users who rate the books and write reviews of the
    books.

    A few years ago, Barnes & Noble and Borders tried to compete
    with Amazon online. As a user, I went to the competitors' site once or twice … but the
    first time Amazon had the book I was looking for and the other site didn't … or
    the first time that Amazon had reviews of a product and the other site didn't –
    well, that was all it took to stop going to those sites.

    And
    Amazon
    continues to extend that edge with bigger inventories, more product
    lines, and a truly mature delivery pipe. Their storefront and
    shopping cart has been used tens of millions of times is an important
    part of the value proposition.

    Psychologically Smart, Part 1: Amazon Banks on Funny Money:

    090306 casino chipsOnce you have a profile on
    Amazon, it doesn't feel like you're spending money. Casinos know the
    token is treated differently than cash.

    On the Kindle, Amazon makes it easy for you to
    buy with "one click" over their "Whispernet" always-on data network.
    So you don't hear or feel your money as it leaves your account. This is
    brilliant.

    Psychologically Smart, Part 2: Amazon Banks on Your Addiction to Instant Gratification:

    Even better, though, is how they handle samples.  It is already changing how I use Amazon. With the Kindle, I
    have instant gratification.

    I can find a book and download a sample in
    seconds. In many cases, the Kindle version is dramatically cheaper than
    the old paper version. So, I suspect that I'll be downloading samples
    of many books. And when I like the author's writing style or find a few
    ideas that I can use, I'm one click away from being able to read the
    rest of it (even if I'm in a meeting or stuck at the airport).

    Over
    time, I might find that I prefer certain books in paper format. On
    the other hand, I've been surprised by how likely I am to read a little
    of this and a little of that.

    And being able to have a whole bookshelf
    is a pretty cool competitive advantage too.

  • Capitalogix Commentary 03/20/09

    090320 Political Cartoon - The Debt Star
    As the recession deepens, the Federal Reserve announced a plan to revive the struggling economy. It will pump more than an
    extra $1 trillion into the mortgage market and longer-term Treasury
    securities.  Short-term, equity markets did push higher.

    The problem with desperate measures, though … they can end up stoking fear, not confidence.   In this case, the plan to buy-up bonds caused the decade's steepest one-day fall in the Dollar against the Euro as investors worried that the Fed's decision to print new money would lead to inflation.  

    One Man's Trash Is Another Man's Treasure:

    In business, I'm constantly facing a build or buy decision.  Namely, is it cheaper to develop something that does what I want, or can I simply buy something that does it already? 

    Well, that equation may soon produce a different result for many companies.  A key indicator is flashing.  Companies are starting to notice. What is it?

    For the 4th quarter of 2008, Argus Research notes the "Q" ratio declined its lowest level since the 4th quarter of 1991.  This implies that it is cheaper to buy a company than to build a replacement.  To me this is an early indicator that merger and acquisition activity is about to increase.  So, expect to see more deals like IBM's proposed acquisition of Sun.

    090320 Buy versus Build Signal

    Sector Rotation: Will Financials Take the Lead?

    Sector rotation theory posits that Financials are a leading indicator of the economy.  Historically they start to perform well six to twelve months before the general market.  Perhaps one of the reasons is that they tend to generate big fees from M&A activity.  And M&A activity starts to get interesting while certain assets are still cheap.  Consequently, I'm watching the Financials and the level of deal activity.

    Last week I posted a chart highlighting the performance of the banking sector, noting that it hadn't been able to sustain a rally longer than a week for quite a while. Well, it looks like decision time.  Just a few weeks ago, Citi's stock price was under $1.  Saturday Night Live made a joke that it was the first major bank to make it onto McDonald's value menu.  Well, it has tripled since then. And the rally has taken prices in this sector to interesting levels.  The chart below shows that the rally has a series of heavy technical burdens to overcome.

    090320 XLF Sell Signal

    However, making it past this price area would go a long way towards convincing me that an intermediate term rally was starting. 

    One other potential negative, indicating a reversal back to the down-side (at least in the short-term), is that the Equity Put-to-Call ratio just hit its ten month low … and that is often a reliable sell-signal.

    Business Posts Moving the Markets that I Found Interesting This Week:

    • Fed to Buy $1 Trillion in Securities to Aid Economy. (NYTimes)
    • Geithner's New Plan to Revive U.S. Banks. (Bloomberg)
    • The Fed's Downside to Desperate Measures. (WSJ)
    • Looking to Learn From Prior Bear Markets. (Economist)
    • More Posts Moving the Markets. (My List)

    Lighter Ideas and Fun Links that I Found Interesting This Week

    • Bush Book Deal Worth $7 Million. (TDB)
    • Which of 14 Types of Twitter Personality are You? (Media Caffeine)
    • Why money messes with your mind – New Scientist. (NewScientist)
    • Old age begins at 27 – scientists claim after new research. (DailyMail UK)
    • More Posts with Lighter Ideas and Fun Links. (My List)
  • Capitalogix Commentary 03/20/09

    090320 Political Cartoon - The Debt Star
    As the recession deepens, the Federal Reserve announced a plan to revive the struggling economy. It will pump more than an
    extra $1 trillion into the mortgage market and longer-term Treasury
    securities.  Short-term, equity markets did push higher.

    The problem with desperate measures, though … they can end up stoking fear, not confidence.   In this case, the plan to buy-up bonds caused the decade's steepest one-day fall in the Dollar against the Euro as investors worried that the Fed's decision to print new money would lead to inflation.  

    One Man's Trash Is Another Man's Treasure:

    In business, I'm constantly facing a build or buy decision.  Namely, is it cheaper to develop something that does what I want, or can I simply buy something that does it already? 

    Well, that equation may soon produce a different result for many companies.  A key indicator is flashing.  Companies are starting to notice. What is it?

    For the 4th quarter of 2008, Argus Research notes the "Q" ratio declined its lowest level since the 4th quarter of 1991.  This implies that it is cheaper to buy a company than to build a replacement.  To me this is an early indicator that merger and acquisition activity is about to increase.  So, expect to see more deals like IBM's proposed acquisition of Sun.

    090320 Buy versus Build Signal

    Sector Rotation: Will Financials Take the Lead?

    Sector rotation theory posits that Financials are a leading indicator of the economy.  Historically they start to perform well six to twelve months before the general market.  Perhaps one of the reasons is that they tend to generate big fees from M&A activity.  And M&A activity starts to get interesting while certain assets are still cheap.  Consequently, I'm watching the Financials and the level of deal activity.

    Last week I posted a chart highlighting the performance of the banking sector, noting that it hadn't been able to sustain a rally longer than a week for quite a while. Well, it looks like decision time.  Just a few weeks ago, Citi's stock price was under $1.  Saturday Night Live made a joke that it was the first major bank to make it onto McDonald's value menu.  Well, it has tripled since then. And the rally has taken prices in this sector to interesting levels.  The chart below shows that the rally has a series of heavy technical burdens to overcome.

    090320 XLF Sell Signal

    However, making it past this price area would go a long way towards convincing me that an intermediate term rally was starting. 

    One other potential negative, indicating a reversal back to the down-side (at least in the short-term), is that the Equity Put-to-Call ratio just hit its ten month low … and that is often a reliable sell-signal.

    Business Posts Moving the Markets that I Found Interesting This Week:

    • Fed to Buy $1 Trillion in Securities to Aid Economy. (NYTimes)
    • Geithner's New Plan to Revive U.S. Banks. (Bloomberg)
    • The Fed's Downside to Desperate Measures. (WSJ)
    • Looking to Learn From Prior Bear Markets. (Economist)
    • More Posts Moving the Markets. (My List)

    Lighter Ideas and Fun Links that I Found Interesting This Week

    • Bush Book Deal Worth $7 Million. (TDB)
    • Which of 14 Types of Twitter Personality are You? (Media Caffeine)
    • Why money messes with your mind – New Scientist. (NewScientist)
    • Old age begins at 27 – scientists claim after new research. (DailyMail UK)
    • More Posts with Lighter Ideas and Fun Links. (My List)