July 2020

  • Rewriting History: In Event of Disaster

    "Fate has ordained that the men who went to the moon to explore in peace will stay on the moon to rest in peace." – Nixon's Apollo 11 Disaster Speech

    In an ideal world, history would be objective; facts about what happened, unencumbered by the bias of society, or the victor, the narrator, etc.

    I think it's apparent, that history as we know it is subjective. The narrative shifts to support the needs of the society that's reporting it. 

    The Cold War is a great example where during the war, immediately after the war, and today, the interpretation of the causes and events has all changed.  

    But while that's one example, to a certain degree, we can see it everywhere. We can even see it in the way events are reported today. News stations color the story based on whether they're red or blue, and the internet is quick to jump on a bandwagon even if the information is hearsay. 

    Now, what happens when you can literally rewrite history?

    “Every record has been destroyed or falsified, every book rewritten, every picture has been repainted, every statue and street building has been renamed, every date has been altered. And the process is continuing day by day and minute by minute. History has stopped.“ – Orwell, 1984

    That's one of the potential risks of deepfake technology. As it gets better, it becomes easier to create "supporting evidence" for whatever narrative a government or other entity is trying to make real.

    On July 20th, 1969 Neil Armstrong and Buzz Aldrin landed safely on the moon. They then returned to Earth safely as well. 

    MIT recently created a deepfake of a speech Nixon's speechwriter William Safire wrote during the Apollo 11 mission in case of disaster.  The whole video is worth a watch, but the speech starts around the 4:20 mark. 

     

    MIT via In Event Of Moon Disaster

    Media disinformation is more dangerous than ever. Alternative history can only be called that when it's discernible from the truth, and unfortunately, we're prone to look for information that already fits our biases. 

    As deepfakes get better, we'll also get better at detecting them, but it's a cat and mouse game with no end in sight. In Signalling theory, it's the idea that signallers evolve to become better at manipulating receivers, while receivers evolve to become more resistant to manipulation. We're seeing the same thing in trading with algorithms. 

    I'm excited about the possibilities of technology, and I believe they're predominantly good. But, as always, in search of the good, we have to acknowledge and be prepared for the bad. 

  • Here Are Some Links For Your Weekly Reading – July 26th, 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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  • Time Flies – Another Year, Another Lesson

    Tomorrow is my 57th birthday. I can't believe how time flies. Birthdays seem to come more quickly as you get older.

    It makes sense, though, I suppose. When you were four, a birthday represented a quarter of your life. Now, a year represents a much smaller percentage.

    While it's not always pleasant getting older, it sure beats the alternative.

    I made a concerted effort this year to make strides towards being more healthy, fit, and vital in mind, body, and spirit.  If you are going to live longer, your future has to be compelling.  I always strive for my future to be bigger than my past.  

    As time marches on, I become increasingly grateful for the friends and family who share the journey with me. 

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    When I was a kid, I couldn't imagine being where I am today … nor could I imagine the path that got me here. Looking back, it all seems to make sense (even though it felt pretty random while making my way through it).

    I feel lucky to have been in the right place at the right time, so consistently, and to find the gift in most situations (even when it seemed so well hidden).

    I'm grateful for a lot today, and as much as I love innovation, sometimes things are perfect just the way they are. 

    Hopefully, you took time this weekend to let someone know they're important to you. If not, now is a good time for that too!

  • Putting Bezos’s Wealth Into Perspective

    Jeff Bezos is officially worth ~$172 Billion dollars; more than he was worth before his divorce. 

    Everyone on earth is closer to being a millionaire than he is. Think about that.  He has so much more than $1 million dollars that the homeless person willing to work for food is closer to being merely a millionaire than Bezos. The med school graduate with $100K+ in debt? Closer to being a millionaire than Bezos.  Obvious at one level … but crazy to think about on another level, right?

    Humans are notoriously bad at large numbers, so it's hard to wrap our minds around something of that scale. 

    I've recently seen a couple of good visualizations of the difference between a million and a billion dollars. 

    If you have an hour to "waste," this comprehensive video by Tom Scott shares a couple of different ways to look at it, and he literally goes on a road trip to show the difference. 

     

    via Tom Scott

    One good example from the video is "It would take almost 12 days for a million seconds to elapse and 31.7 years for a billion seconds." A billion seconds from today would be 1988. 

    Another:

    1 dollar

    • 0.0043 inches or 0.00010922 meters (thickness)

    1B dollars

    • 1B x 0.0043 inches → 4.3M inches → 68 miles
    • 1B x 0.00010922 meters → 109K meters → 109 kilometers

    Now multiply that by 172.

    In distance, Bezos's net worth is a hair under half the equatorial circumference of the Earth.

    Here's a link to specifically understanding Bezos's net worth – https://mkorostoff.github.io/1-pixel-wealth. If you were to spend a dollar every second for an entire day, you would spend $86,400 per day. If you have a million dollars, you can do that for approximately twelve days. With a billion dollars, you can do that for over 31 years. Ignoring the difference between net worth and cash, Jeff Bezos could spend over $9M per day for over 31 years.

    Lastly, here's a shorter video visualizing the $10 Trillion in economic stimulus the U.S. government has been undertaking. 

     

    via Demonocracy

    Even with these depictions, it's hard to understand. We're wired to think locally and linearly, not exponentially (it's one of the reasons I love AI so much). 

    Hope this was helpful!

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

    The monthly deficit in June was ~$864 billion, which is nearly as much as 2019's yearly deficit. Here's a good link to explore the complexities around the U.S. deficit, and what it means in the greater scheme of things. 

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

    Lighter Links:

     

    Trading Links:

  • Let’s Play: News Segment or Propaganda Piece?

    There is nothing wrong with your television.  We will control all that you see and hear. We can deluge you with a thousand channels or expand one single image to crystal clarity and beyond. We can shape your vision to anything our imagination can conceive.  Enjoy ….

     

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    The original,, from The Outer Limits TV show was: 

    There is nothing wrong with your television set. Do not attempt to adjust the picture. We are controlling transmission. If we wish to make it louder, we will bring up the volume. If we wish to make it softer, we will tune it to a whisper. We will control the horizontal. We will control the vertical. We can roll the image; make it flutter. We can change the focus to a soft blur or sharpen it to crystal clarity. For the next hour, sit quietly and we will control all that you see and hear. We repeat: there is nothing wrong with your television set. You are about to participate in a great adventure. You are about to experience the awe and mystery which reaches from the inner mind to the outer limits.

    As a society, we're fairly vulnerable to groupthink, advertisements, and confirmation bias. 

    We believe what we want to believe, so it can be very hard to change a belief, even in the face of contrary evidence. 

    Recently, we've seen a massive uptick in distrust toward news agencies, big companies, the government, and basically anyone with a particularly large reach. 

    To a certain degree, this is understandable and justified. Here is an example of the power of the media focused on a message.  Click to watch.

     

    via Courier News

    Propaganda has always been an issue, and almost everyone does it; governments, companies, etc. Luckily, it's easier to see today than in the past, but unluckily it's also more pervasive and insidious than before. 

    It's to the point where if you watch the news you're misinformed, and if you don't watch the news you're uninformed. 

    The above segment portrays a rosy picture of Amazon's efforts to protect its workers while delivering essentials to the struggling homebound masses. This comes while Amazon has come under massive fire for removing some of its protections. 

    Honestly, I use Amazon and, in my opinion, this isn't a massive breach of trust. News stations have a lot of time to fill, they often have sponsored content.

    That being said, it's something to be cognizant of – not necessarily offended by.

    Personally, I believe I am reasonably aware and somewhat immune from propaganda. That probably isn't as true as I'd like to believe.

    It used to be true that winners wrote history (think empires, wars, etc.). Now, the one that delivers the most broadcast narratives shapes the emotional and seemingly logical responses to what we perceive to be happening around us.

    The result impacts elections, financial markets, buying choices, and countless other areas of our life. 

    As A.I., Bots, and social media grow, our ability to discern truth from 'truthiness' weakens.

    It's a great reminder that what you're seeing and hearing is carefully manufactured, and hopefully, it encourages you to get outside your bubble. 

  • The Pace of Success

    Capitalogix started in my home.  The first employee sat at a tiny desk behind me.  Their job was to exit the trades I entered.  This was an early attempt to avoid the fear, greed, and discretionary mistakes that humans bring to the business of trading.

    We started to grow … and somehow got to 23 people working in my home.  It literally overtook my office, dining room, and the entire upstairs. Neighbors noticed (and expressed their displeasure).

    Looking back, it seems crazy (and my wife seems Saintly).  But somehow, at the time, it felt natural. 

    Incubating the company in my home, and growing it the way we did resulted in a closeness (a feeling much like family) that pays dividends, even today.

    Speed matters … both fast and slow.  

    I shot a video on the subject. Check it out. 

     

     

    There is a concept in business expressed by the phrase "measure twice and cut once."  It's much easier to do something the right way from the beginning rather than trying to fix it after you mess it up. 

    It saves time and creates a better end result. 

    Beginning with the end in mind is powerful.  I often spend what looks like "too much" time imagining the bigger future.  What will things look like when we are ten-times bigger?  Who will we serve?  What dangers will keep me up at night?  What opportunities will we be trying to attract or capture?  What strengths will give us confidence?  Who will we be collaborating with … and about what?  It helps build a roadmap that makes it easier to understand whether particular activities are aligned with our future (or just something we are doing now). 

    I prefer to optimize on the longer-term rather than the shorter-term.  That isn't always possible or practical … but when it is, that is my preference.

    Pace is important – and a focus on "what's the best next step" is an important driver at Capitalogix, but sometimes in order to go fast, you have to go slow. You may miss out on something, but the ultimate payoff is often worth it. 

    It's a good lesson for personal growth as well.  There is no right timeline. No one size fits all.  Take your time. Find your path. 

    DQKRk6pWAAMtoQiAnna Vital via Adioma

    Hope that helps. 

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

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

    Lighter Links:

     

    Trading Links:

  • Coronavirus Relief: US Foreign Debt Holders

    In response to COVID-19, the U.S. Government has tried numerous things to bolster the economy. 

    In Q2 alone, the U.S. Treasury borrowed a record $3 trillion dollars for coronavirus relief. It's already the largest-ever borrowing for any fiscal year, and it brings our total above $26 Trillion (over $80,000 per citizen).

    The concept of "Debt" can be confusing to a layman. Most people understand what it means to take on debt with a local bank, but it can be harder to understand the role debt plays in global economics. Debt often enables governments to run smoothly. But sometimes you can have too much of a good thing.

    Many worry that our "excessive" government debt levels impact economic stability, the strength of our currency, and unemployment. For all the potential, it's certain that our debt with a country affects the relationship. So who "owns" most of our debt?

    Foreign_Debt-0c2evia HowMuch

    Japan holds more U.S. debt than any other country but is followed closely by China. Both countries hold more than 6% of total foreign-held debt. 

    The chart focuses on foreign debt – but only about 30% of the national debt is held by foreign countries. The rest is held by investors, the Federal Reserve, and the government. 

    Taking a step back, how does our debt compare on the world stage? An important metric of debt is the debt-to-GDP ratio. It is a key indicator of the sustainability of government finance.

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    via OECD 

    Ultimately, we're in the highest bracket, but also have a historically strong GDP to back it. It's also worth noting that lower debt levels don't necessarily translate to safety on a global scale. Yugoslavia had very low government debt until its breakup. 

    In some ways, it seems like 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. 

    While this doesn't mean we can go on borrowing forever, it does mean we have options. 

    If you want to see an updated, interactive version of the U.S. Debt Clock, just click here.  It is worth spending a little time watching the pace the numbers turn.

    Actions have consequences.

    Something to think about. 

  • The Intelligent Investor

    There are many different methods of investing – and I've experimented with quite a few of them (fundamental, technical, statistical, quantitative, machine learning, etc.).

    Ultimately, I believe most trading techniques work until they don't. 

    I don't believe that any technique always works … but I do believe that there is always something that works. 

    Likewise, I believe that there is always a best next step.

    Evolutionarily, the strongest or smartest doesn't necessarily survive … The quickest to adapt and adjust to its changing environment is the one that gains advantage.

    Consequently, it makes sense to be on the lookout for sources of new learning (even if they are old).

    In the same way that reading news from an opposing slant can inform your decision – studying other beliefs may help you find the underlying truths (or spark the insight you needed).

    Warren Buffet is a famous value investor. He does immense research on companies, attempts to buy them at a discount and then hold on to them for long periods of time.  On some levels, our approach to the markets is radically different.  On the other hand, it would be crazy to ignore the brilliance of what he "knows" and what he does.

    One of his favorite books on investing is titled The Intelligent Investor by Benjamin Graham. It's a great introduction to the basics of value investing (versus speculating) and the role of inflation, margin of safety, etc. 

    It's worth a read … but if you want to watch a good summary, here's a six-minute video. 

     

    via Financial Freedom

    If you aren't learning, you're dying.