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

  • Predictably Irrational: The Hidden Forces That Shape Our Decisions

    090313 Predictably Irrational Book Cover I finally got around to reading this book, and it was worth it.  This
    review has links to videos and related material to help you get more
    from the book.  Bottom-line: It was fun and easy-to-read … with short
    chapters and memorable stories that make practical points.

    Magic, Markets and the Mind … A Little Back-Story.

    Magic fascinated me when I was younger. I loved learning new and cool illusions. There's something satisfying about seeing behind the curtain, and understanding how it works.

    Now, as an adult, I'm struck with how similar that is to my fascination with understanding stock markets and trading techniques.  Of course, increased skill in this area is potentially rewarding financially. But there also is  something intellectually pleasing about believing you can see and understand what's really happening in the markets.

    Taking that a bit further, it's not surprising that people spend so much time and money trying to understand how the mind works. Our brains didn't come with a user's manual; though sometimes it would be useful to have one to help understand why something is happening or
    how to get a different result.

    Some aspects of my mind that truly amaze me, while other parts of my mind confound me. Have you ever asked yourself: How can someone so smart be so dumb, at the same time?  I suspect that most people have.

    Obviously that is why there are whole industries that help shine a light into that darkness. Whether it's through personality or temperament testing, learning to use NLP, or finding some other way for us to optimize our performance or understanding … people want insights and answers.

    That is why I'm happy to review the book Predictably Irrational. It was interesting and fun; and it provides some insights worth having.  Think of it as a few of the missing chapters from our Owner's Manual.

    Predictably Irrational: The Hidden Forces That Shape Our Decisions.

    When it comes to making decisions in our lives, we think were in
    control. We think we're making smart, rational choices. But are we?

    In a series of illuminating, often surprising experiments, Professor Dan Ariely refutes the common assumption that we behave in rational ways.

    His book, Predictably Irrational: The Hidden Forces That Shape
    Our Decisions    , contains an interesting mix of psychology and economics, he calls "behavioral
    economics".   The main point of the book is that while irrational behavior is a
    part of human nature, people tend to behave irrationally in a predictable fashion.

    Consequently, Ariely suggests that we would be better off if we designed systems to compensate for our limitations.  With that in mind, this
    book can change the way you interact with the world, one decision at a
    time.

    Why Smart People Do Dumb Things:

    Blending
    everyday experience with research, he explains how
    expectations, emotions, social norms, and other invisible, seemingly
    illogical forces skew our reasoning abilities.

    Not only do we make
    astonishingly simple mistakes every day, we make these same types
    of mistakes, repeatedly.

    • We consistently overpay, underestimate, and
      procrastinate.
    • We fail to understand the profound effects of our
      emotions on what we want. And
    • We overvalue what we already own.

    Yet
    these misguided behaviors are neither random nor senseless. They are
    systematic and predictable – thus, making us predictably irrational.

    Here is a brief video that explains more about how you can use behavioral economics to combat the Predictably Irrational.



    Here is the direct link     to Dan's speech to Google at the @Google Talks Series.

    The Book Illustrates Some of the Ways We Exercise Bad Judgment in the Economics of Life.

    There are a lot of interesting tidbits in this book.  For example, the book explains why cautious people make poor decisions when excited, or why
    you enjoy the more expensive option over its cheaper counterpart.

    One study in the book shows that Cheap is Good; But Free Seems Better. When asked if they’d like a 15-cent Lindt truffle or a one-cent Hershey’s Kiss, 73% of people buy the truffle. However, simply drop a penny off the price of each – so … a 14 cent truffle or a free Hershey’s Kiss – and only 31% choose the Lindt. Is eating the chocolate you don’t really want worth saving a penny? Probably not; but it is human nature.

    According to Ariely, we should re-examine and re-cast our understanding of economics to reflect the systematic (and unsurprising) irrationality of human nature. Ariely argues that greater understanding of previously ignored or misunderstood forces (emotions, relativity, and social norms) that influence our economic behavior brings a variety of opportunities to better predict individual motivation and consumer choice, as well as economic and educational policies.

    Other Links:

    Links to Other Speeches:

    By the way, there is a whole @Google Talks Series. It is worth exploring.  I especially like the Authors section.

  • Predictably Irrational: The Hidden Forces That Shape Our Decisions

    090313 Predictably Irrational Book Cover I finally got around to reading this book, and it was worth it.  This
    review has links to videos and related material to help you get more
    from the book.  Bottom-line: It was fun and easy-to-read … with short
    chapters and memorable stories that make practical points.

    Magic, Markets and the Mind … A Little Back-Story.

    Magic fascinated me when I was younger. I loved learning new and cool illusions. There's something satisfying about seeing behind the curtain, and understanding how it works.

    Now, as an adult, I'm struck with how similar that is to my fascination with understanding stock markets and trading techniques.  Of course, increased skill in this area is potentially rewarding financially. But there also is  something intellectually pleasing about believing you can see and understand what's really happening in the markets.

    Taking that a bit further, it's not surprising that people spend so much time and money trying to understand how the mind works. Our brains didn't come with a user's manual; though sometimes it would be useful to have one to help understand why something is happening or
    how to get a different result.

    Some aspects of my mind that truly amaze me, while other parts of my mind confound me. Have you ever asked yourself: How can someone so smart be so dumb, at the same time?  I suspect that most people have.

    Obviously that is why there are whole industries that help shine a light into that darkness. Whether it's through personality or temperament testing, learning to use NLP, or finding some other way for us to optimize our performance or understanding … people want insights and answers.

    That is why I'm happy to review the book Predictably Irrational. It was interesting and fun; and it provides some insights worth having.  Think of it as a few of the missing chapters from our Owner's Manual.

    Predictably Irrational: The Hidden Forces That Shape Our Decisions.

    When it comes to making decisions in our lives, we think were in
    control. We think we're making smart, rational choices. But are we?

    In a series of illuminating, often surprising experiments, Professor Dan Ariely refutes the common assumption that we behave in rational ways.

    His book, Predictably Irrational: The Hidden Forces That Shape
    Our Decisions    , contains an interesting mix of psychology and economics, he calls "behavioral
    economics".   The main point of the book is that while irrational behavior is a
    part of human nature, people tend to behave irrationally in a predictable fashion.

    Consequently, Ariely suggests that we would be better off if we designed systems to compensate for our limitations.  With that in mind, this
    book can change the way you interact with the world, one decision at a
    time.

    Why Smart People Do Dumb Things:

    Blending
    everyday experience with research, he explains how
    expectations, emotions, social norms, and other invisible, seemingly
    illogical forces skew our reasoning abilities.

    Not only do we make
    astonishingly simple mistakes every day, we make these same types
    of mistakes, repeatedly.

    • We consistently overpay, underestimate, and
      procrastinate.
    • We fail to understand the profound effects of our
      emotions on what we want. And
    • We overvalue what we already own.

    Yet
    these misguided behaviors are neither random nor senseless. They are
    systematic and predictable – thus, making us predictably irrational.

    Here is a brief video that explains more about how you can use behavioral economics to combat the Predictably Irrational.



    Here is the direct link     to Dan's speech to Google at the @Google Talks Series.

    The Book Illustrates Some of the Ways We Exercise Bad Judgment in the Economics of Life.

    There are a lot of interesting tidbits in this book.  For example, the book explains why cautious people make poor decisions when excited, or why
    you enjoy the more expensive option over its cheaper counterpart.

    One study in the book shows that Cheap is Good; But Free Seems Better. When asked if they’d like a 15-cent Lindt truffle or a one-cent Hershey’s Kiss, 73% of people buy the truffle. However, simply drop a penny off the price of each – so … a 14 cent truffle or a free Hershey’s Kiss – and only 31% choose the Lindt. Is eating the chocolate you don’t really want worth saving a penny? Probably not; but it is human nature.

    According to Ariely, we should re-examine and re-cast our understanding of economics to reflect the systematic (and unsurprising) irrationality of human nature. Ariely argues that greater understanding of previously ignored or misunderstood forces (emotions, relativity, and social norms) that influence our economic behavior brings a variety of opportunities to better predict individual motivation and consumer choice, as well as economic and educational policies.

    Other Links:

    Links to Other Speeches:

    By the way, there is a whole @Google Talks Series. It is worth exploring.  I especially like the Authors section.

  • It Would Be Funnier If It Wasn’t So Sad

    There is a kernel of truth in most good humor.  So last week I posted a clip of Jon Stewart poking fun at CNBC on the Daily Show … and it was funny.  This week, Jim Cramer went on the Daily Show to defend himself … and the results are funnier, with even more kernels of truth.  Here are un-edited extended versions of that interview.  This is certainly worth watching.

    Part 1 of the Interview.

    Part 2 of the Interview.

    Part 3 of the Interview.

    Click here to see more of the Daily Show's and Colbert's Best Jim Cramer Moments.

  • It Would Be Funnier If It Wasn’t So Sad

    There is a kernel of truth in most good humor.  So last week I posted a clip of Jon Stewart poking fun at CNBC on the Daily Show … and it was funny.  This week, Jim Cramer went on the Daily Show to defend himself … and the results are funnier, with even more kernels of truth.  Here are un-edited extended versions of that interview.  This is certainly worth watching.

    Part 1 of the Interview.

    Part 2 of the Interview.

    Part 3 of the Interview.

    Click here to see more of the Daily Show's and Colbert's Best Jim Cramer Moments.

  • Capitalogix Commentary 03/06/09

    Cartoon Why This Depression is Worse than 1930

    You've probably heard the joke about the difference between a recession and a depression.  It's a recession when your neighbor loses their job; and it's a depression when you lose yours. 

    Here is a cartoon that pokes fun at something similar.

    The 1929 crash got off to a much faster start, but we have now more or less caught up.  That isn't as funny because of how true it is becoming.

    Bespoke had an interesting tidbit, only 5% of stocks in the S&P 500 are still trading above their 50-day moving averages.  Three sectors — financials, industrials, and utilities — have zero stocks trading above their 50-days.  Technology has the highest percentage of stocks above their 50-days at just 12%.

    Because of the unrelenting selling, many believe that stocks are ripe for a bounce. Supporting that are several reasonably reliable indicators.  The first is that Smart Money
    is continuing to get more bullish (while retail investors continue to get
    more bearish).  We are getting close to levels that often signify
    rallies.  Similarly the American Association of Individual Investors (AAII) reported the highest level of bearishness (over 70%) since they started measuring in 1987. This is often construed as a contrarian indicator, since the highest levels of bearishness often occur at market bottoms.  So at least now you can feel good that people feel bad.

    Sometimes the truth in humor tells the story better than other methods.  Here is a clip from Jon Stewart's Daily Show.  In it, he does what he does to CNBC.  It's pretty funny.


    Here are a Few of the Business Posts Moving the Markets that I Found Interesting This Week    :

    • GE Shares Fall to 18-Year Lows. (WSJ)
    • Unemployment Rate surges to 8.1% – Worst since 1983. (Guardian)
    • Gates foundation sells-off $100 million of Buffett shares. (CNet)
    • Sentiment Overview for the Week. (Trader's Narrative)

    And, Here are a Few More Lighter Ideas and Fun Links:

    • How to Be an Angel Investor. (Paul Graham)
    • Brief book summary of Jim Collins' "Good to Great". Interesting. (Brevity Brief)
    • Is web-design becoming more blog-like because of Search? (Forbes)
    • Silly service translates and dumbs-down what you say. (Untelligencer)

  • Capitalogix Commentary 03/06/09

    Cartoon Why This Depression is Worse than 1930

    You've probably heard the joke about the difference between a recession and a depression.  It's a recession when your neighbor loses their job; and it's a depression when you lose yours. 

    Here is a cartoon that pokes fun at something similar.

    The 1929 crash got off to a much faster start, but we have now more or less caught up.  That isn't as funny because of how true it is becoming.

    Bespoke had an interesting tidbit, only 5% of stocks in the S&P 500 are still trading above their 50-day moving averages.  Three sectors — financials, industrials, and utilities — have zero stocks trading above their 50-days.  Technology has the highest percentage of stocks above their 50-days at just 12%.

    Because of the unrelenting selling, many believe that stocks are ripe for a bounce. Supporting that are several reasonably reliable indicators.  The first is that Smart Money
    is continuing to get more bullish (while retail investors continue to get
    more bearish).  We are getting close to levels that often signify
    rallies.  Similarly the American Association of Individual Investors (AAII) reported the highest level of bearishness (over 70%) since they started measuring in 1987. This is often construed as a contrarian indicator, since the highest levels of bearishness often occur at market bottoms.  So at least now you can feel good that people feel bad.

    Sometimes the truth in humor tells the story better than other methods.  Here is a clip from Jon Stewart's Daily Show.  In it, he does what he does to CNBC.  It's pretty funny.


    Here are a Few of the Business Posts Moving the Markets that I Found Interesting This Week    :

    • GE Shares Fall to 18-Year Lows. (WSJ)
    • Unemployment Rate surges to 8.1% – Worst since 1983. (Guardian)
    • Gates foundation sells-off $100 million of Buffett shares. (CNet)
    • Sentiment Overview for the Week. (Trader's Narrative)

    And, Here are a Few More Lighter Ideas and Fun Links:

    • How to Be an Angel Investor. (Paul Graham)
    • Brief book summary of Jim Collins' "Good to Great". Interesting. (Brevity Brief)
    • Is web-design becoming more blog-like because of Search? (Forbes)
    • Silly service translates and dumbs-down what you say. (Untelligencer)

  • Social Media 101 – The Name Land-grab

    Real Estate is about location, location, location.  That's true on the web as well.  Years ago, I watched people rush to register Internet domains.  Well it's happening again; only this time it is on a wide-range of social media sites.

    Before I go further, or before you decide to skip to the next article, here's a piece of advice worth paying attention taking; Register your name, your company name, and any other product or keyword you want to protect on Twitter.

    I'll take that even further; register those names on other social media services as well. I'm talking about companies like Facebook, LinkedIn, FriendFeed, StumbleUpon, and Digg. Even if you don't believe you'll use the service, you may not want someone else talking to the public using a name that they may associate with you. Here is a link to a service that helps you reserve your name.

    I watched my kids use instant messages, texting from their phones, and
    then Facebook. Slowly I've adopted these technologies. Still, it's hard
    for me to believe that I'm using Twitter.  If you're not using them
    yet, you probably will soon.

    The Big Three:

    090306 LinkedIn Logo
    LinkedIn is the most corporate of the services. It's an enhanced resume with a clever algorithm to figure out how you can connect to someone else. So, if I wanted to contact Mark Cuban, it would tell me which of my director second level contacts have contacts with him.

    090306 Facebook Logo
    Facebook used to be for college students, but has quickly become the most popular social media application. I'm amazed at how many business people use this as their primary form of keeping in touch with people socially.  The Facebook platform is evolving quickly and is very easy to customize by telling it that you want to see you more of this and less of that.

    090306 Twitter Logo
    Twitter is getting popular quickly; and it has a lot of business momentum.  It drives traffic and is quickly becoming useful as form of search engine that shows trends and what's happening right now.  I see more third party development and support for Twitter than the other platforms combined.  I didn't "get" Twitter at first; but it is growing on me.

    Here is a cartoon comparing the three services.

    090306 Making Friends in Social Media

    • On LinkedIn it seems like connections are made based on worthiness. 
    • On
      Facebook connections are based on how you know the other person
      (and
      it's common to have more Facebook friends been LinkedIn connections).
    • On Twitter your follower list is more elastic; people will come and people will go
      (and it's common to have more Twitter followers than Facebook friends). 

    So go register some names, and next time I'll share some of the tools I use to make using social media easier and more productive.

  • Social Media 101 – The Name Land-grab

    Real Estate is about location, location, location.  That's true on the web as well.  Years ago, I watched people rush to register Internet domains.  Well it's happening again; only this time it is on a wide-range of social media sites.

    Before I go further, or before you decide to skip to the next article, here's a piece of advice worth paying attention taking; Register your name, your company name, and any other product or keyword you want to protect on Twitter.

    I'll take that even further; register those names on other social media services as well. I'm talking about companies like Facebook, LinkedIn, FriendFeed, StumbleUpon, and Digg. Even if you don't believe you'll use the service, you may not want someone else talking to the public using a name that they may associate with you. Here is a link to a service that helps you reserve your name.

    I watched my kids use instant messages, texting from their phones, and
    then Facebook. Slowly I've adopted these technologies. Still, it's hard
    for me to believe that I'm using Twitter.  If you're not using them
    yet, you probably will soon.

    The Big Three:

    090306 LinkedIn Logo
    LinkedIn is the most corporate of the services. It's an enhanced resume with a clever algorithm to figure out how you can connect to someone else. So, if I wanted to contact Mark Cuban, it would tell me which of my director second level contacts have contacts with him.

    090306 Facebook Logo
    Facebook used to be for college students, but has quickly become the most popular social media application. I'm amazed at how many business people use this as their primary form of keeping in touch with people socially.  The Facebook platform is evolving quickly and is very easy to customize by telling it that you want to see you more of this and less of that.

    090306 Twitter Logo
    Twitter is getting popular quickly; and it has a lot of business momentum.  It drives traffic and is quickly becoming useful as form of search engine that shows trends and what's happening right now.  I see more third party development and support for Twitter than the other platforms combined.  I didn't "get" Twitter at first; but it is growing on me.

    Here is a cartoon comparing the three services.

    090306 Making Friends in Social Media

    • On LinkedIn it seems like connections are made based on worthiness. 
    • On
      Facebook connections are based on how you know the other person
      (and
      it's common to have more Facebook friends been LinkedIn connections).
    • On Twitter your follower list is more elastic; people will come and people will go
      (and it's common to have more Twitter followers than Facebook friends). 

    So go register some names, and next time I'll share some of the tools I use to make using social media easier and more productive.

  • Does the Kindle 2 Make Sense?

    The world is changing quickly. Just because you made money a certain way for a long time doesn't mean that this is how you'll continue to make money in the future. In fact the practical realities of time and technology suggest that this is not the case.  In this environment, you have to adapt and re-invent yourself.

    Creative Destruction in the Publishing Industry:

    Think about what has happened to publishing in the past decade. I'm talking about: television, movies, and music … but also newspapers, magazines, and the book industry.

    Personally, I read more than I ever did before; but I hardly ever go to a bookstore. I buy a lot less magazines than I used to; and I have to think hard to remember the last time I purchased a CD.

    That doesn't mean people aren't making money in these areas. I suspect it just means that different people are making the money. The industry is changing. It's a new game, with new rules, and new opportunities.

    How the Kindle Changes Amazon's Business Model:

    090306 Kindle Bezos Launch 250pI've had the new Kindle 2 for about two weeks; and I like a lot. 
    I'm impressed by the machine, but I'm more impressed with the business platform that Amazon is creating.

    Yes, they're going to sell a lot of books on the Kindle.  Amazon will build a base of brand-loyal Kindle users.

    Plain and simple, though, the Kindle is going to change Amazon's business model.

    Right now
    bestsellers cost $9.99 (which I suspect is a loss leader because they still have to buy the book from a traditional publisher) and certainly
    cannibalizes their business of selling paper books.

    They are signaling that they expect to make money differently in the future. That is part of the reason I like Amazon's decision to invest so heavily in the Kindle platform. It's a subsidized campaign to bridge to a new business model.

    You Will Have Access to New and Extended Forms of Content.

    More avenues will open to profit in different ways.  For example, I expect that Amazon will soon sell a paper copy of the book along with an
    electronic version for premium price. And you'll also soon have the ability to unlock more features.  That means that you'll be able to pay to consume what you
    choose (whether that's a one-time viewing, a permanent license, the
    right to print, share, or listen to the audio version or watch the
    multimedia presentation version of the content).

    They have an opportunity to re-define what you consider a "book" as well. And I predict that it won't be
    long before you can buy a book that is electronically enhanced with expanded content. Here is how I envision that might work. For example, let's say you buy a book on
    blogging. It might describe how to set up an account with TypePad or
    WordPress. The enhanced version of the book, which you paid extra for,
    could have links and setup wizards to do a lot of the heavy lifting for
    you. Do you want to allow search engines to index your new posts?
    Here's how to do it, and click this button to have us set it up for you.

    Think
    about how many areas would benefit from this marriage of content and
    skills transfer what about a book on trading that helped you build the
    pattern recognition or money management rules into your charting
    software or trading platform?

    Trojan Horse Strategy: This Will Turn the Publishing Industry Upside-Down.

    0903060 Trojan Horse
    I think the bigger opportunity is the Trojan horse that turns the publishing industry upside down.

    Think about how hard it's been for a new author to get a book published. Even before that, they had to find an agent. If that happens and they withstand the countless rounds of rejection, then the publishing house decides if one and how the book is released and the artist gets perhaps a dollar per book.

    In the near future, an author who understands social media and generating buzz published their book or pamphlet through Amazon's Kindle channel and keep the majority of the money. It's faster, frictionless, and more lucrative. 

    And Amazon can start to cut-out that pesky middle-man.  Why deal with a publisher, when you can let the author believe they are the publisher?  With this model, there is more margin for everyone (except the old-line publishers, who better be re-inventing themselves with a new value proposition).

    It's Not Just About the Publishing Industry; They're Out To Change Your Industry Too.

    As Amazon builds up the infrastructure to run their business,
    they've decided that they're willing to sell their excess capacity to
    you with a new product line of Amazon Web Services. It's on-demand technology capacity that is flexible, state-of-the-art and cost-effective.

    Yes, there is still a need for humans. So it's no surprise that Amazon has a new line of business they call the Mechanical Turk. And it's a marketplace for humans to do the work you want to outsource. It leverages Amazon's marketplace catalog and is another example of how they're becoming vertically integrated and well-positioned for the future.

    As a consumer, I like what I see; and it's only going to get better.

    Bottom Line:  Amazon's competitors and suppliers are going to have to adjust their business models.

    But the real point wasn't just about Amazon's foresight or skill. It's a challenge and a a wake-up call-to-action for you to look at what you do, and what you need to do … and for you to figure-out
    what your future company and the future you is going to focus on and do
    to succeed.  The environment is changing.  It is time to adapt and re-invent yourself.

  • Does the Kindle 2 Make Sense?

    The world is changing quickly. Just because you made money a certain way for a long time doesn't mean that this is how you'll continue to make money in the future. In fact the practical realities of time and technology suggest that this is not the case.  In this environment, you have to adapt and re-invent yourself.

    Creative Destruction in the Publishing Industry:

    Think about what has happened to publishing in the past decade. I'm talking about: television, movies, and music … but also newspapers, magazines, and the book industry.

    Personally, I read more than I ever did before; but I hardly ever go to a bookstore. I buy a lot less magazines than I used to; and I have to think hard to remember the last time I purchased a CD.

    That doesn't mean people aren't making money in these areas. I suspect it just means that different people are making the money. The industry is changing. It's a new game, with new rules, and new opportunities.

    How the Kindle Changes Amazon's Business Model:

    090306 Kindle Bezos Launch 250pI've had the new Kindle 2 for about two weeks; and I like a lot. 
    I'm impressed by the machine, but I'm more impressed with the business platform that Amazon is creating.

    Yes, they're going to sell a lot of books on the Kindle.  Amazon will build a base of brand-loyal Kindle users.

    Plain and simple, though, the Kindle is going to change Amazon's business model.

    Right now
    bestsellers cost $9.99 (which I suspect is a loss leader because they still have to buy the book from a traditional publisher) and certainly
    cannibalizes their business of selling paper books.

    They are signaling that they expect to make money differently in the future. That is part of the reason I like Amazon's decision to invest so heavily in the Kindle platform. It's a subsidized campaign to bridge to a new business model.

    You Will Have Access to New and Extended Forms of Content.

    More avenues will open to profit in different ways.  For example, I expect that Amazon will soon sell a paper copy of the book along with an
    electronic version for premium price. And you'll also soon have the ability to unlock more features.  That means that you'll be able to pay to consume what you
    choose (whether that's a one-time viewing, a permanent license, the
    right to print, share, or listen to the audio version or watch the
    multimedia presentation version of the content).

    They have an opportunity to re-define what you consider a "book" as well. And I predict that it won't be
    long before you can buy a book that is electronically enhanced with expanded content. Here is how I envision that might work. For example, let's say you buy a book on
    blogging. It might describe how to set up an account with TypePad or
    WordPress. The enhanced version of the book, which you paid extra for,
    could have links and setup wizards to do a lot of the heavy lifting for
    you. Do you want to allow search engines to index your new posts?
    Here's how to do it, and click this button to have us set it up for you.

    Think
    about how many areas would benefit from this marriage of content and
    skills transfer what about a book on trading that helped you build the
    pattern recognition or money management rules into your charting
    software or trading platform?

    Trojan Horse Strategy: This Will Turn the Publishing Industry Upside-Down.

    0903060 Trojan Horse
    I think the bigger opportunity is the Trojan horse that turns the publishing industry upside down.

    Think about how hard it's been for a new author to get a book published. Even before that, they had to find an agent. If that happens and they withstand the countless rounds of rejection, then the publishing house decides if one and how the book is released and the artist gets perhaps a dollar per book.

    In the near future, an author who understands social media and generating buzz published their book or pamphlet through Amazon's Kindle channel and keep the majority of the money. It's faster, frictionless, and more lucrative. 

    And Amazon can start to cut-out that pesky middle-man.  Why deal with a publisher, when you can let the author believe they are the publisher?  With this model, there is more margin for everyone (except the old-line publishers, who better be re-inventing themselves with a new value proposition).

    It's Not Just About the Publishing Industry; They're Out To Change Your Industry Too.

    As Amazon builds up the infrastructure to run their business,
    they've decided that they're willing to sell their excess capacity to
    you with a new product line of Amazon Web Services. It's on-demand technology capacity that is flexible, state-of-the-art and cost-effective.

    Yes, there is still a need for humans. So it's no surprise that Amazon has a new line of business they call the Mechanical Turk. And it's a marketplace for humans to do the work you want to outsource. It leverages Amazon's marketplace catalog and is another example of how they're becoming vertically integrated and well-positioned for the future.

    As a consumer, I like what I see; and it's only going to get better.

    Bottom Line:  Amazon's competitors and suppliers are going to have to adjust their business models.

    But the real point wasn't just about Amazon's foresight or skill. It's a challenge and a a wake-up call-to-action for you to look at what you do, and what you need to do … and for you to figure-out
    what your future company and the future you is going to focus on and do
    to succeed.  The environment is changing.  It is time to adapt and re-invent yourself.