Capitalogix

Time Flies - Another Year, Another Lesson

Thursday was my 60th 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!

This year, I made a concerted effort to be more healthy, fit, and vital in mind, body, and spirit. I said I wanted to sprint into 60, rather than roll into it.

If you are going to live longer, your future has to be compelling to you.  Otherwise, who would want to extend their stay?  That is why I strive to keep my future bigger than my past.  

As time marches on, I become increasingly grateful for the friends and family who share the journey with me.  This year, I spent my birthday in San Diego, surrounded by family and some close friends.  On Saturday, they surprised me with a "Birthday Palooza," celebrating my 60th along with my wife Jennifer's 50th. 

 

 

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.

Onwards!

Here Are Some Links For Your Weekly Reading - July 30th, 2023

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

Lighter Links:

• Samuel Alito Tells Congress to Stay Out of Supreme Court Ethics Controversy. (CNN)
• As We Learn to Use AI, It is Learning to Use Us. (HackerNoon)
• Mind-Reading Machines are Coming — How Can We Keep Them in Check? (Nature)
• Will ChatGPT Replace Psychiatrists? (PsychologyToday)
• Millions of Americans Have Stopped Attending Church. What Will Bring Them Back? (The Atlantic)

Trading Links:

• Why Meta is Giving Away Its Extremely Powerful AI Model. (Vox)
• China's Reputation as a Leading Economic Power is Fast Eroding. (Quartz)
• Traders are Risking It All on Bets That Market Boom Will Last. (Bloomberg)
• Contrarian Hedge Fund Manager Explains Why He is Still Bearish. (TheStreet)
• Yale Professor: Current Economy Most Successful Since FDR's New Deal. (MSNBC)

 

Do You Think the U.S. Has Aliens?

I'll admit to being fascinated by the idea of aliens.  Growing up in the 60s and 70s, there was no shortage of science fiction fantasies imagining what a space-faring civilization would look like and, more importantly, what would we, the Earthlings, do when they made contact. 

Last year, there was a U.S. congressional hearing on Unidentified Flying Objects.  While there wasn't any proof of aliens, they did admit to phenomena they couldn't explain with their current information.

Now, we have multiple former military officials testifying in a House of Representatives meeting that the U.S. has recovered not only spacecraft but alien biological matter for decades.  While I do believe in the possibility of aliens, I remain skeptical.

There are many stories (or theories) about how we had encountered aliens before and just kept them secret.  For example, in 2020, a former senior Israeli military official proclaimed that Aliens from a Galactic Federation had contacted us - and that not only is our government aware of this, but they are working together. 

In contrast, I have found it more realistic and thought-provoking to consider theories about why we haven't seen aliens until now.

For example, the Fermi Paradox considers the apparent contradiction between the lack of evidence for extraterrestrial civilizations and the various high probability estimates for their existence. 

Let's simplify the issues and arguments in the Fermi Paradox.  There are billions of stars in the Milky Way galaxy (which is only one of many galaxies).  Each of these stars is similar to our Sun.  Consequently, there must be some probability of some of them having Earth-like planets.  Further, it isn't hard to conceive that some of those planets should be older than ours, and thus some fraction should be more technologically advanced than ours.  Even if you assume they're only looking at evolutions of our current technologies - interstellar travel isn't absurd.  Thus, based on the law of really large numbers (both in terms of the number of planets and the length of time we are talking about) ... it makes the silence all the more deafening and curious. 

If you are interested in the topic "Where are all the aliens?"  Stephen Webb (who is a particle physicist) tackles that in his book and in this TED Talk.   

 

via TED

In the TED talk, Stephen Webb covers a couple of key factors necessary for communicative space-faring life. 

1. Habitability and stability of their planet
2. Building blocks of life 
3. Technological advancement
4. Socialness/Communication technologies

But he also acknowledges the numerous confounding variables, including things like imperialism, war, bioterrorism, fear, moons' effect on climate, etc. 

Essentially, his thesis is that there are numerous roadblocks to intelligent life - and it's entirely possible we are the only planet that has gotten past those roadblocks - or that there might have been others in the past, or others may develop in the distant future. 

What do you think?

Here's another article I wrote on the subject, titled "Are We Alone In The Universe?"

Finally, here are some other links I liked on this topic.  There is some interesting stuff you don't have to be a rocket scientist to understand or enjoy. 

• 75 Reasons We Don't See Aliens 
• Wait But Why: The Fermi Paradox
• A New Theory on Why We Haven't Found Aliens Yet
• A List of Solutions to The Fermi Paradox
• Dissolving the Fermi Paradox, Future of Humanity Institute, Oxford University

To Infinity and Beyond!

Life After Death ... Will A.I. Help you Live Forever?

My Aunt recently passed away. She was my Dad's sister ... and she was a fantastic person. She was loving and kind. She was a natural-born caregiver, And she was as sharp as a tack. What wouldn't we give for another moment with her? My response to her death reminded me of my feelings when my Dad passed away. 

This time, the conversation was a little different. People asked me if I thought that A.I. would enable us to live on after our bodies started to give out on us. I recorded some of my thoughts. 

 

I don't think A.I. will give us life after death.

I do believe technology will get good enough to create a replica of you - that talks like you, responds like you, and even comforts people who miss you. 

I don't believe technology can capture whatever part of us doesn't live in our bodies. Whether you call it our soul (or something else), I don't think that will ever get uploaded to the matrix, so you live on. 

And, I think that's okay. Part of the beauty of existence is the transience, the joy, the suffering, and the range of human experience. That is a big part of what we call life.

When my Dad was dying, every moment took on new meaning. Not only did time seem to slow down, but there was a weight and intimacy that's often taken for granted. 

What do you think?

Here Are Some Links For Your Weekly Reading - July 23rd, 2023

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

Lighter Links:

• Elon Musk Decides Twitter Is Being Rebranded as X. (Wall Street Journal)
• China Mandates that AI Must Follow “Core Values of Socialism”. (TheVerge)
• 7 Eye-Popping Numbers From the Worldwide Heat Wave. (NYMag)
• Scientists Working on Merging AI With Human Brain Cells. (Futurism)
• The Data Don't Really Support the Most Popular Happiness Strategies. (Time)

Trading Links:

• Meta Unveils a More Powerful A.I. And Isn't Fretting Over Who Uses It. (NYT)
• Visualized: The U.S. $20 Trillion Economy by State. (VisualCapitalist)
• It's Taylor Swift's Economy, and We're All Living in It (Even the Fed). (Wall Street Journal)
• Investors Are the Least Fearful They've Been Since COVID Hit. (Axios)
• The Bear Market is Dying After Less Than 20 Months as Almost $10 Trillion Floods Back Into Equity Values. (Fortune)

 

 

A Brief Look At Quantum Computing

I am not an expert on quantum computing ... but I saw an impressive photo of Google's new quantum computer, and thought it was worth diving a bit deeper. 

Google's computer stands at the forefront of computing technologies. This extraordinary device boasts 70 qubits, a significant improvement over the previous 2019 model, which had 53 qubits. A qubit is the quantum world's answer to classical bits. Not to dive too deep, but as you increase the number of qubits in a model, the possible states a quantum computer can hold simultaneously grows exponentially (due to quantum entanglement,) allowing it to perform faster calculations.

So, while 70 qubits don't sound like that much, it calculates exponentially faster than normal computers. For some context, Google's team used a synthetic benchmark called random circuit sampling to test the system's speed, and the results showed that they could perform calculations in seconds that would take the world's most powerful supercomputer, Frontier, 47 years. 

Four years ago, Google announced that they'd reached quantum supremacy, a benchmark demonstrating that a programmable quantum device could solve a problem impossible for classical computers to solve within a practical timeframe. It took less than five years to successfully establish the technological feasibility of quantum computers. 

The progress made in quantum computing enhances our capacity to tackle complex problems that previously posed a challenge (or seemed impossible). The ripple effects will extend to other domains and industries (improving artificial intelligence, logistics, medicine, and almost anything you can imagine). As with the space race or AI, the benefits will not be limited to the realm in which they were created ... but will also have a significant impact on broader industries, the world, and our lives.

 

It's important to temper your expectations and recognize that quantum technology is still in its infancy. It comes with significant limitations, such as the need for extremely low temperatures and precise magnetic fields. Even if these specific conditions are satisfied, there will be stability issues. Additionally, the current cost to develop and operate this technology is quite high.

But, it's an exciting horizon for us to walk towards. 

Onwards!

The Surreal World of Deepfakes And Deep AI

Deep Learning excels in analyzing pictures & videos and creating facsimiles or combining styles.  People are using generative AI tools like ChatGPT or Midjourney increasingly frequently.  And there is an explosion of simple tools (like the Deep Dream Generator or DeepAI) that use Convolutional Neural Networks to combine your photo with an art style (if you want to do it on your phone, check out Prisma).   Here are some example photos.

via SubSubRoutine

The same foundation that allows us to create these cool art amalgamations also can create deepfakes.  A Deepfake is precisely what it sounds like ... they use "Deep Learning" to "Fake" a recording.  For example, a machine learning technique called a Generative Adversarial Network can be used to superimpose images onto a source video.  That is how they made this fun (and disturbing) Deepfake of Jennifer Lawrence and Steve Buscemi.

 

Another interesting technology can create AI-powered replicas of someone that don't just look and sound like them – they can respond like them too.  Examples of this are seen in tools like Replica Studios or Replika.  One of the artistic uses people have been exploring recently is getting unlikely characters to sing famous songs.  These chatbots have also been used by lonely men and women to create virtual paramours. 

The three basic uses of deep learning (described above) are being combined to create a lot of real mainstream applications ... and the potential to create convincing fakes.

Deepfakes can be fun and funny ... but they also create real concerns.  They're frequently used for more "nefarious" purposes (e.g., to create fake celebrity or revenge porn and to make important figures say things they never said).  You've likely seen videos of Trump or Biden created with this technology.   But it is easy to imagine someone faking evidence used at trial, trying to influence business transactions, or using this to support or slander causes in the media.

As fakes get better and easier to produce, they will likely be used more often. 

On a more functional note, you can use these technologies to create convincing replicas of yourself.  You could use that replica to record videos, send voicemails, or participate in virtual meetings for you. While I don't encourage you to use it without telling people you are, even just using the technology puts you a step ahead. 

Here Are Some Links For Your Weekly Reading - July 16th, 2023

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

Lighter Links:

• The Future of AI—And Everything Else—Is Hybrid. (Forbes)
• You're Not Imagining It: Social Media is in Chaos. (NYT)
• How Storytelling Makes You a Better Leader. (PsychologyToday)
• 5 Meta-Skills to Supercharge Every Aspect of Your Life. (BigThink)
• Does One Hour of Meditation Equal Eight Hours of Sleep? (InsideHook)

Trading Links:

• Investing in the "AI Mafias". (Axios)
• AI and the Blue Ocean Strategy: How Artificial Intelligence is Creating Uncontested Market Space. (HS)
• Can A.I. Invent? (NYT)
• Legendary Investor Jeremy Grantham Revealed How the AI Craze Has Changed the Odds of an Epic Market Crash. Here are the 8 Best Quotes. (Markets)
• Hedge Funds are Reeling From Some of the Worst Outflows Since the Great Recession and Managers are Shunning Wall Street – Even as a Bull Market Reigns. (Insider)

Rewriting The Past, Present, and Future

"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.  History books are written by the victors. 

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 generative AI and deepfake technology.  As it gets better, creating "supporting evidence" becomes easier 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 watching, but the speech starts around 4:20. 

 

MIT via In Event Of Moon Disaster

Media disinformation is more dangerous than ever.  Alternative narratives and histories can only be called that when they are discernible from the truth.  In addition, people often aren't looking for the "truth" – instead, they are prone to look for information that already fits their 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 Signaling Theory, it's the idea that signalers 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. 

In 1983, Stanislav Petrov saved the world. Petrov was the duty officer at the command center for a Russian nuclear early-warning system when the system reported that a missile had been launched from the U.S., followed by up to five more.  Petrov judged the reports to be a false alarm and didn't authorize retaliation (and a potential nuclear WWIII where countless would have died). 

But messaging is now getting more convincing.  It's harder to tell real from fake.  What happens when a world leader has a convincing enough deepfake with a convincing enough threat to another country?  Will people have the wherewithal to double-check?

Lots to think about. 

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

A Look At Blackrock's Holdings

Last year, we looked at Warren Buffet’s origins, as well as his holdings (In the past, we’ve also taken a look at Renaissance and Jim Simons).

As a math and artificial intelligence nut, looking at Warren Buffet is still educational.  It is fascinating to study his holdings as well as his perspective on the markets.  Clearly, he has an advantage and knows how to leverage it. 

As the world continues to change, and edges come and go, it’s immensely valuable to understand what remains the same.  In Buffet’s case, he has always been honest about his bread-and-butter “trick” …  he buys quality companies at a discount and holds on to them.

But what about another behemoth in the space - Blackrock?  They haven’t been around for nearly as long as Buffet, founded just 34 years ago in 1988.  Despite that, BlackRock has quickly become the world’s largest asset manager, with over $9 trillion in assets under management (AUM). 

They aren’t as transparent as Berkshire Hathaway about what or how they do what they do.  From their website, BlackRock positions themselves as systematic investors leveraging vast datasets and new technologies. To look a little deeper, here is a chart showing their equity holdings.

 

via visualcapitalist

While Berkshire Hathaway and BlackRock take different approaches and the core of their equity investments aren’t the same ... Apple is #1 for both of them.  Not particularly surprising. 

While this is an interesting graph to look at, it’s important to know that this is one way to invest ... and might be a reasonable way to get from a lot of money to even more money - but this might not be the portfolio that works for the average investor (or you). 

When there is blood in the streets … asking, “What would Warren or Blackrock do?” might be a great place to start.

But it is hard to have an edge if you use the same process and the same data as your competitors.

As the flywheels of commerce spin faster, edges will emerge and decay faster.  Finding a solution is only a step in an ongoing process.  

Robust, reliable, and repeatable innovation at scale is a meaningful competitive advantage.  That implies that idea factories will become as important (if not more so) than factories that produce material products.  Likewise, innovation funnels will become more important than sales funnels. 

The world changes at the speed of thought ... and as technology continues to improve ... even faster.

Onwards!