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

  • The Most Hyped Technologies of The 2000s

    The Hype Cycle provides the raw material for some of my favorite posts every year.

    In general, 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 attempts to tell us which technologies will survive the hype and have the potential to become a part of our daily life. 

    Gartner's Hype Cycle Report is one of my favorites.  It 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 and contextually understandable snapshot of where various emerging technologies sit in their hype cycle.

    Here are the five regions of Gartner's Hype Cycle framework:

    1. Innovation Trigger (potential technology breakthrough kicks off),
    2. Peak of Inflated Expectations (Success stories through early publicity),
    3. Trough of Disillusionment (waning interest),
    4. Slope of Enlightenment (2nd & 3rd generation products appear), and
    5. Plateau of Productivity (Mainstream adoption starts). 

    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?"

    Another methodology uses frequency analysis to identify the "most hyped" concepts and technologies.  

    VisualCapitalist recently put together an infographic highlighting the most hyped technologies of each year. They call it the "Peak of Inflated Expectations".

     Screen Shot 2020-01-17 at 4.03.00 PM 2(Click To See Full Infographic) via VisualCapitalist

    Here's a Summary of the most hyped technologies, by year, since 2000.

    • 2000 – Wireless Web, ASPs, Bluetooth
    • 2001 – Web Services, Enterprise IM, m-Commerce
    • 2002 – Biometrics, Grid Computing
    • 2003 – Process Portals
    • 2004 – Micro Portals, Virtual Content Repositories
    • 2005 – P2P VOIP, Biometric ID Documents, BPM Suites
    • 2006 – Mashup, Web 2.0 
    • 2007 – Legal P2P, Digital Video Broadcasting
    • 2008 – Green IT
    • 2009 – Cloud Computing, e-Book Readers, Social Software Suites
    • 2010 – 4G Standard, Activity Streams
    • 2011 – Internet TV, NFC Payment, Augmented Reality
    • 2012 – BYOD, 3D Printing, Complex Event Processing
    • 2013 – Big Data, Gamification, Wearable User Interfaces
    • 2014 – IoT, Natural-Language Question Answering, Cryptocurrencies
    • 2015 – Speech-To-Speech Translation, Advanced Analytics, Autonomous Vehicles
    • 2016 – Blockchain, Cognitive Expert Advisors, Machine Learning
    • 2017 – Virtual Assistants, Connected Home, Deep Learning
    • 2018 – Biochips, Digital Twin, Deep Neural Networks
    • 2019* – 5G, AI PaaS, Graph Analytics
      *Missing from the infographic, but updated by Gartner

    As we take our smartphones for granted, it's hard to imagine bluetooth, wireless web, or e-book readers as emerging technologies at this point – but at a time, the lightbulb was an emerging technology. 

    It's also interesting to look at which technologies peaked in a hype cycle, or which now popular technologies don't show up on this list. Despite Virtual Reality being around since the 80's, I expected to see it on this list. 

    Cryptocurrencies, "smart homes", and several older examples are fizzling or burnt out – but that doesn't mean they won't have resurgences. 

    As a reminder, the hype cycle and the innovation/adoption cycle are often on very different time scales. It's very possible that technologies from the early 2000s may still have their heyday. 

    What are you surprised wasn't on the list? And, what do you think is about to get added?

  • Here Are Some Links For Your Weekly Reading – January 19th, 2020

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    Here are some of the posts that caught my eye recently. Hope you find something interesting.

    Lighter Links:

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  • Autonomous Lyft – Waymo

    I went to a conference in Phoenix with my son Zach last week.  While there, he noticed something interesting … Lyft is testing Alphabet's Waymo autonomous driving service live on the streets.

    Regardless of concerns about the future of the gig economy – this is a glimpse into our not-to-distant future.  

    Here's what they say about it.

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    I had to leave early to catch a flight, so my son decided to use Lyft to get around.  He accepted the Waymo terms, but didn't get a Waymo vehicle. Still, I thought this was cool.

     

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    There will likely soon be a tipping point where autonomous vehicles proliferate.  Even though we are not "there" yet … the progress is obvious and the "quickening" is happening. 

    Meanwhile, examples of innovation and exponential technology successes and adoption are all around us. 

    The future is getting closer. 

    Onwards.

  • Law of Diminishing Returns

    At some point, more of the same stops paying off …

     

    Law of Diminishing Returnsvia Sketchplanations

    Nature (and common sense) reminds us that equilibrium is important. For example, when you exercise too much you get injured, when you drink too much water you get poisoned, etc. 

    This concept applies almost everywhere.

    • It's why diversification is so important in portfolio construction theory. 
    • Or, why you don't want to put all your eggs in one basket (concentrating your risk).
    • And, my favorite, it's also why you shouldn't only eat vegetables.

     

    A related nugget of wisdom from the extreme … too much of a good thing is a bad thing. 

  • Here Are Some Links For Your Weekly Reading – January 12th, 2020

    As the Australian wildfires rage on – an inestimable number of animals have died.

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    If you wish to donate to help relief efforts, you can do so with any of these trusted sources. 

     

    Here are some of the posts that caught my eye recently. Hope you find something interesting.

    Lighter Links:

     

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  • A Debt You Can’t Pay

    The concept of "Debt" can be confusing to a layman. Most people understand what it means when they take on debt with a local bank, but it can be harder to understand the role debt plays in global economics.

    Compounding the confusion, the implications of debt change on a macro level. 

    Many worry that our "excessive" government debt levels impact economic stability, the strength of our currency, and unemployment. The national debt can only be reduced through five mechanisms: increased taxation, reduced spending, debt restructuring, monetization of the debt, or default. 

    The idea behind our current global debt structure is that if two nations are mutually obligated and dependent on each other, they are less likely to go to war. And that has held relatively true so far. Of course, it's not a perfect system, and it can break down, but as yet, it's working compared to previous systems such as the balance of power.

    In some ways, it's fake money, so paying off our debts seems insurmountable. Yet, our economy is reliable so we're allowed to continue borrowing. Debt is also an important part of the economic machine – it can be argued that we wouldn't have money without debt. 

    Ray Dalio created a simple (but not simplistic) and relatively easy to follow 30 minute animated video that answers the question, "How does the economy really work?"  Click to watch.

     

    via Ray Dalio

    To learn more about Dalio's Economic Principles visit: http://www.economicprinciples.org.

    The global economy has hugely increased in size in the last 50 years as developing nations prosper. The average global GDP per capita has gone from ~$1000 to over $10,000 in my lifetime.

    So it makes sense that the amount of debt is also increasing with the size of the money supply required to conduct all the transactions in the global economy.

    The U.S. tops the list with debt to GDP at 104.3% and almost $22 Trillion in debt, but is dwarfed by #2 Japan's debt to GDP rate of 237.1%. 

    World-debt-2019 via Visual Capitalist 

     

    Meanwhle, China has increased its indebtedness by $2 trillion in the last two years. 

    The market is not the economy. Meaning, the performance of markets is not necessarily linked to the performance of the economy (and the converse is true as well). Even though you may be more interested in trading, economics is still important to understand and follow. 

    If one thing is clear, it's that 2020 will be an interesting year for markets and the economy. 

    There is a lot of opportunity in crisis and chaos.

     

  • A Serendipitous Moonshot

    Hope you’re enjoying the New Year!

    On January 2nd, 2020,  after many years of hard work, we launched the Capitalogix Absolute Return Fund.

    It’s been a long and hard road … but also a labor of love.

    On a related note, I’ve talked about moonshots, playing a different game, and getting comfortable being uncomfortable.   These themes come up because they define what we do at Capitalogix and what was necessary to create the technology platform that runs the fund. 

    Speaking of getting comfortable being uncomfortable, I spent the last week on a family cruise through the Caribbean.  

     

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    We celebrated many important events including my mother’s 80th birthday, my sister’s 50th birthday, and Jennifer and my 12th wedding anniversary.

    We happened to be in Grand Cayman on January 2nd, the day fund launched.

      

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    I had a chance to stop by Walker’s (our fund lawyers) to commemorate the day with them as well.

     

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    It was a great start to my year!

    Let me know how your year started too.

     

  • Growth of the US In 2019 (and into 2020)

    The US economy and its financial markets have proven resilient – if you look at the timeline of our history, there's almost unbridled growth. 

    For all the hiccups, issues, downturns, etc. our economy is enormous and still growing. 

    US-GDP-by-Year-Compared-to-Recessions-and-Events-v7-1600-e87avia howmuch

    In fact, our largest growth came on the backs of the Great Depression and WW2 … it makes sense, but it's a reminder of resiliency.

    Looking at 2019, we've seen volatility, fear, uncertainty – but we've also seen a banner year for the S&P 500, and continued GDP growth. 

    According to visual capitalist, the key sectors for growth this year were semiconductors, credit services, aerospace/defense, electornic equipment, and diversified machinery. Oil, wireless communications, foreign banks, apparel, and foreign telecoms took a hit. 

    Stock-market-winners-losers-2019via Visual Capitalist

    I share these images, not to say we're invincible, or that growth will continue forever, but to say that as we start the new year it's important to be optimistic and keep an eye on what's possible, not what obstacles we may face along the way. 

    Onwards!

  • Here Are Some Links For Your Weekly Reading – January 5th, 2020

    The Dallas Cowboys are letting Jason Garret's contract lapse as it expires at the end of the month. 

    As a longtime Cowboys fan – I'm conflicted, but hopeful. Who do you think is going to end up as head coach?

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    Here are some of the posts that caught my eye recently. Hope you find something interesting.

    Lighter Links:

     
     

     

    Trading Links:

  • Starting Your New Year The Right Way

    This is the first year that my team's plan for 2020 almost 100% matches my vision for it, without my input. I think that's a good sign that we're taking the right steps.

    We talk a lot about the vision for the next 5, 10, 20 years … but it's easy to have the same target and want to walk different paths. 

    I'm also doing a better job in my personal goals – as mentioned in October. 

    As we reach the last week of 2019 – and enter a new decade – I want to revisit how I think about personal New Year's resolutions. 

    Happy-new-decade

    Hopefully, you can use some of these concepts.

    • Focus on What You Want.
    • Focus on Why You Want It.
    • Focus on Ways You Might Get it.
    • Focus on the Progress.

    Below, I'll take you through an example each of the four steps.

    Moving Towards a Solution, Rather Than Suffering with the Problem.

    Before I got back into my health, my first instinct was to think "I need to lose weight".  Knowing that "you're fat" isn't helpful … my head, quickly translates that to something a tad more positive, yet generic, like: "I choose to be healthy and vital, and to live a healthy lifestyle".

    Blah, blah … They are just words.  What I needed was something specific, measurable and actionable.  How about: "I will lose 15 pounds and stop eating after dinner."  OK, but that isn't inspiring, and there isn't much for me to do. I can do better than that.

    Figure-Out a Big Enough WHY, Rather Than Worrying about the HOW's.

    This post isn't about health and fitness, it is about the mind-set and techniques you can use to set empowering goals and plans in any situation.

    So, while I could list a lot of ways to lose weight; and I might even remember to do some of them, when you create a driving force, the momentum takes care of itself.  The first step in doing that is knowing WHY you want something.

    I really do want to be healthy and vital (it sure beats the alternatives), and I want to have the energy and confidence to live and enjoy my life fully.  The world is my playground, and I want to take advantage of more opportunities to play with family and friends.  In order to do those things, I must find better ways for me to live a healthy lifestyle.

    The WHYs are just as important for business goals too.

    Focus on Potential Solutions, Rather than Problems or Challenges.

    Obstacles Exist. The bad news: I don't eat fish and I don't like vegetables (unless French Fries are vegetables).  My joints aren't close to healthy from years of violent contact sports. I rarely get 7 hours of sleep, and who'd have thunk it, but being a CEO of a fast-growing startup is stressful.  The good news: is none of those things matter; and even if they did, it just would mean that I have a lot of room for progress.

    It is natural to focus on obstacles. But most obstacles are surmountable – with a big enough WHY, even I'll start to eat vegetables. Instead of dwelling on the limitations,  use them as a reminder to focus on potential solutions instead. They are beacons, pointing the way.

    How do you do it?  To focus on solutions, you can make two action-based lists: one is of things To-Do … and another is of things Not To-Do.

    Here are some of the sample To-Do Items:

    • I will drink more water than coffee.
    • I will stretch, or do basic calisthenics, on days that I do not go to the gym.
    • I will make a healthy shake as a meal replacement rather than a meal supplement.
    • I will focus on relaxation and meditation, as much as I focus on strength & physical exercises.

    Here is the actionable list of Not To-Do Items.

    • I will not buy new pants or wear stretchy pants.
    • I will not eat snacks out their container, and will portion-out what I want first.
    • I will not compare my current level of fitness to what I used to be able to do. Instead, I will focus on my actions and improvement.

    Create Healthier Habits.

    It is easy to follow your routine.  So, make your routine better.  Here are some examples of things you could do to make being healthier happen with less effort.

    • Pre-sort your vitamins into daily doses, and keep them by the coffee machine.
    • Buy healthy snacks, like fruit, raw nuts or organic energy bars (instead of chips).
    • Make exercise time, the time you enjoy listening to music or listen to a book/podcast. Dedicating time to something, doesn't mean you can't be multitasking.
    • Park at the end of the parking lot, so you get to walk.
    • Meet with friends at the gym or at a hiking spot, rather than a bar or restaurant.

    You get the idea.  Get in the habit of looking for ways to create better habits.  What habits could you alter slightly, to make a big difference?  Which things can you automate or outsource?

    Focus on Your Progress.

    In this case, it really is about the journey.  Instead of keeping track of how far you have to go … notice how far you've come. Utilize an internal locus of control. It is about creating energy, momentum and a sense of possibility.  You may have a big, hairy, audacious goal in mind.  That's fine, as long as you realize that reaching each milestone along the way is still an accomplishment.

    • Find shoes that don't hurt your feet.
    • Pick a gym, or a personal trainer.
    • Run more than two laps without stopping.

    It doesn't matter what they are are … they all count, as long as you know that you are moving in the right direction.

    Summary

    The point of this exercise as was not really to focus on fitness. These techniques and goal-setting tools work in any situation. The principles are:

    1. First, figure out what you want, and why it is important to you. 
    2. Second, find something you can do, right now, which moves you in the right direction.
    3. Third, notice which things create (rather than take) energy. Spend your time on those, and automate or create routines to take care of the rest.
    4. Fourth,  plan forwards, but measure backwards. Set milestones so that you can recognize and celebrate your progress.

    In business, this translates to Capitalogix having a mission and vision – it's what we want, and why it's important to us. I then create a yearly "Big 3" goals that move us toward that long-term vision. My team creates SMARTs (goals that are specific, measurable, attainable, relevant, and timely) and KPIs (key performance indicators) so they know where to spend there time, and what milestones tell them they're on the right track.

    Hope this helped.