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Here are some of the posts that caught my eye recently. Hope you find something interesting.
The Internet is both timeless and timely in an interesting way. While what's popular changes seemingly instantly, and what we're capable of doing on it continues to grow exponentially. Ultimately, the Internet is the digital town square of a global village, where all types and professions gather.
In 2011, I first wrote about what happens in 60 seconds on the Internet.
I've since updated the article a few times.
Each time I write the article, I'm in awe at the amount of data we create and how much it has grown. For example, looking back to 2011, I was amazed that users created 600+ new videos and 60 new blog posts each minute. Those numbers seem quaint today.
via DOMO
Shortly after I started sharing the articles, Data Never Sleeps started standardizing the data, which is helpful.
Today, the Internet reaches 5.4 billion people. Most of them also use social media.
To add some more perspective,
It is mind-blowing to consider what happens each minute on the Internet today. For example, the 104,000 hours spent on Zoom represents a significant societal shift ... and the over 500 hours of video uploaded to YouTube highlights the incredible amount of content that's being created to share.
In 2023, the world created approximately 120 zettabytes of data ... which breaks down to approximately 337,000 petabytes of data a day. Broken down even further, it calculates to more than 15 Terabytes of new data created per person.
The calculations about what happens in an Internet minute will change rapidly again because of AI. Consider the amount of computing power and data it takes to power all of these new GPTs. Now, imagine the amount of new data that AI is creating. Then, try to imagine the challenge we'll have figuring out what's real, what's made up, and what is simply wrong or intentionally misleading.
In addition, as more devices and digital WHOs start creating and sharing data, it's hard to fathom the ramifications and sheer increase in data.
I'm curious about what the next five years have in store for us as we approach the 40th anniversary of the World Wide Web.
“Words can be twisted into any shape. Promises can be made to lull the heart and seduce the soul. In the final analysis, words mean nothing.
They are labels we give things in an effort to wrap our puny little brains around their underlying natures,
when ninety-nine percent of the time the totality of the reality is an entirely different beast.
The wisest man is the silent one. Examine his actions. Judge him by them.”
―
Continuing with the theme of cognitive biases, the upcoming election has me thinking about the consequences of labeling things, creating boxes, and simplifying ideas into news-ready headlines.
With more news sources than ever and less attention span, you see ideas packaged into attention-grabbing parts. The focus isn't on education or the issues, but on getting the click, making your stay on their page longer, and sending you to a new article utterly unrelated to why you clicked on the page.
Complex issues are simplified – not even into their most basic forms – but instead into their most divisive forms ... because there's no money in the middle.
The amplified voices are those on the fringe of the average constituents' beliefs – precisely because those are the ones who are often the most outspoken. We might think that because they're the voices we hear, these fringe messages fairly represent what people like us believe or think ... but they rarely do.
Issues that should be bipartisan have been made "us" versus "them," "liberal" versus "conservative," or "right" versus "wrong." The algorithms many of our information sites use create echo chambers that increase radicalization and decrease comprehension.
Identity politics have gotten so strong that you see families breaking apart and friend groups disintegrating ... because people can't imagine sharing a room with someone with whom they don't share the same values.
In psychology, heuristics are mental models that help you make decisions easier. They're a starting point to save mental bandwidth, allowing you to spend more brain cycles on the important stuff.
That's a great use of "boxes" and "simplification"… but it shouldn't eliminate deeper and more nuanced thought on important issues.
Most situations are nuanced, and the "correct" answer changes as you change your vantage point.
In an ideal world, we'd consider every angle. I recognize that's not realistic.
Instead, I encourage you to remember to continue to think and learn ... even about things you already know. And, if you become familiar with the most common cognitive biases, you can hopefully identify them in your thinking and decision-making.
Confirmation Bias is one of the more common forms of cognitive bias. Here is an infographic that lists 50 common cognitive biases. Click to explore further.
via VisualCapitalist
Important issues deserve more research. New insights happen between the boundaries of what we know and don't. Knowledge comes from truly understanding the border between what you are certain and uncertain about.
I challenge you to look beyond the headlines, slogans, and talking points you like most. Look for dissenting opinions and understand what's driving their dissent. Are they really blind or dumb (or are their value systems just weighted differently)?
Not everything needs to be boxed. Not everything needs to be simple. You should explore things and people outside of your comfort zone and look to see things from their point of view ... not your own.
Recently, I've started using a website and news app called Ground News. They claim to be a news platform that makes it easy to compare news sources, read between the lines of media bias, and break free from algorithms.
As discussed above, online news and ad-driven algorithms have made it profitable for news outlets to embrace a position on the bias spectrum to target specific consumers. That bias in the media affects everything from what events receive coverage to how a news outlet frames those events in their reporting.
As media outlets narrow their perspective and range of coverage, I use Ground to help me get a well-rounded view of important issues and become aware of my blind spots.
“I am ashamed to think how easily we capitulate to badges and names, to large societies and dead institutions.”
― Self-Reliance
I love learning a lesson in one space and applying it to other spaces. It's one of the cool things about AI. An algorithm can learn rules in the construction space that may help in the medicine or trading space. Everything's a lesson if you let it be.
In that vein, the lesson on labeling also applies to yourself and your business. Don't get me wrong - naming things is powerful. It can help make the intangible tangible. However, don't let the label (or your perception of the label) stop you from achieving something greater.
Many things are true because we believe them to be, but when we let go of past beliefs, the impossible becomes possible, and the invisible becomes visible.
Hope that helps.
Here are some of the posts that caught my eye recently. Hope you find something interesting.
The law of averages is a principle that supposes most future events are likely to balance any past deviation from a presumed average.
Take, for example, flipping a coin. If you happen to get 5 "Heads" in a row, you'd most likely assume the next one should be "Tails" ... even though each flip has a 50/50 chance of landing on either.
Even from this example, you can tell it's a flawed law. While there are some reasonable mathematical uses of the law of averages, in everyday life, this "law" mostly represents wishful thinking.
It's also one of the most common fallacies succumbed to by gamblers and traders.
The concept of "Average" is more confusing and potentially damaging than you might suspect.
Perhaps you heard the story about how the U.S. Air Force discovered the 'flaw' of averages by creating cockpits based on complex mathematics surrounding the average height, width, arm length, etc., of over 4,000 pilots. Despite engineering the cockpit to precise specifications, pilots crashed their planes on a too-regular basis.
The reason? With hindsight, they learned that very few of those 4,000 pilots were actually "average". Ultimately, the Air Force re-engineered the cockpit and fixed the problem.
It's a good reminder that 'facts' can lie, and assumptions and interpretations are dangerous. It's why I prefer taking decisive action on something known, rather than taking tentative actions about something guessed.
via ReasonTV
Our Brains and the Illusion of Balance
Our brains are wired to find patterns, even in random events. This tendency, known as apophenia, can lead us to see connections where none exist.
The Misleading Law of Averages
It's this very tendency that fuels the misconception of the law of averages. We expect randomness to "even out" because we see patterns in short sequences. This can be tempting to believe, especially when dealing with chance events.
The law of averages is a common idea that suggests future events will even out past results to reach some average outcome. For instance, going back to our earlier coin-flipping example, after getting five heads in a row, it's natural to assume the next flip is "due" to be tails. However, that's not how probability works. Each coin flip is an independent event (with a 50% chance of landing on heads or tails), regardless of previous flips. The coin doesn't "remember" what happened before.
Apophenia isn't limited to coin flips. For instance, you might see your lucky number appearing repeatedly throughout the day, leading you to believe it has a special meaning – even though each instance is completely independent.
This natural desire for order and predictability can lead us astray when dealing with chance events.
Why is it Flawed?
The law of averages often leads to a misconception called the gambler's fallacy. This fallacy is the belief that random events can somehow "correct" themselves to reach an average. In reality, every coin flip, roll of the dice, or spin of the roulette wheel is a fresh start with its own discrete probabilities. The odds remain the same no matter how long the losing streak persists.
Are there ever times when it applies?
It's important to distinguish the law of averages from the law of large numbers, a well-established statistical principle. The law of large numbers states that as the number of random events increases, the average outcome gets closer to the expected probability. This applies in situations where many trials happen, and while past results of individual events are independent, the law describes the behavior of averages over a large number of trials. For instance, the average weight of a large sample of apples will likely be close to the expected average weight of an apple, even if some individual apples are heavier or lighter than expected.
However, in everyday situations (with a limited number of events), the law of averages is generally not a helpful way to think about chance or probabilities.
Understanding these misconceptions can help us make better decisions and avoid false expectations based on flawed reasoning.
Psychological Reasons Behind the Belief
Human decision-making suffers from a range of tendencies and biases.
Earlier, we discussed the tendency to find patterns, even where none exist. Next, we will consider cognitive bias. In our coin-flipping example, it is the representativeness heuristic that makes us assume that small samples should resemble the larger population they come from.
Emotional factors also play a role. The desire for control in uncertain situations can make us latch onto the law of averages as a comforting notion. Believing that things will "even out" gives us a sense of predictability and fairness in an otherwise random world.
Additionally, social influences can reinforce these beliefs. Stories and anecdotes about streaks ending or luck changing often circulate among friends and family, further embedding the misconception into our collective consciousness.
Understanding these psychological reasons helps explain why the law of averages persists despite its flaws. Recognizing these biases can empower us to think more critically about probability and chance events.
Improving Decision-Making in Gambling and Investing
Recognizing the fallacy of the law of averages can significantly enhance decision-making, particularly in gambling and investing. Understanding that each event is independent can help participants make more rational choices. Instead of chasing losses with the hope that a win is "due," savvy speculators understand their odds remain constant and may choose to walk away or set strict limits on their betting behavior.
In investing, this knowledge is equally crucial. Many factors influence markets. Nonetheless, believing that a stock "must" rebound after a series of declines too often leads to poor investment decisions. Investors who grasp that past performance does not dictate future results are better equipped to evaluate investments based on fundamentals rather than emotions or flawed expectations.
By dispelling these misconceptions, you can approach gambling or investing with a clearer mindset, reducing the risk of substantial losses driven by erroneous beliefs about probability and chance.
You can also eliminate fear, greed, and discretionary mistakes by relying on algorithms to calculate realtime expectancy scores and take the road less stupid. Take a different kind of chance. Just ask our AI Overlords; they'll tell you what to expect!
My adult son took me to a Pixar movie and Dallas' version of NY Deli today for Father's Day.
Pixar movies never cease to amaze me. Whether you're a child, a teenager, or an adult, there's always something to enjoy and take away from them.
I especially enjoyed watching it next to my 31-year-old son and noticing that he responded emotionally to the same scenes I did. On one hand, it felt good to see what he processed and how he internalized things similar to the way I do. On the other hand, I thought, genetics is a bitch.
Jokes aside, having great kids is a double blessing. It's nice to be proud of who your kids are and the things they do. It's also nice to feel proud of the small part you played in helping them become who they are.
In addition, this weekend, I spent some time thinking about my father and what a terrific influence he had on so many lives.
My Dad was incredibly loving ... yet he was also incredibly demanding.
For example, after winning the State Championship in the shot put, I watched him run down from the stands. I figured he was coming down to celebrate. Instead, he looked deeply into my eyes and asked whether I was disappointed that I did not throw a personal best that day? I replied: "But Dad, I won." He smiled and recognized that winning was important too ... then he reminded me that the other throwers were not my real competition. To be and do your best, the competition is really with yourself ... and we both knew I could do better.
My Dad believed in setting high standards. He explained that most people's lives are defined by their minimum standards. Why? Because once those standards get met, it is easy to get distracted by other things and how to meet the minimum standards for them as well.
The point is to set a higher standard and to have a better life.
Here is another one of his favorite sayings. "The difference between good and great is infinitesimal." This applies to many things. For example, people who are good take advantage of opportunities; people who are great create them.
Here is something else worth sharing. "It's not over until we win!" This concept underscores the importance of resilience, commitment, and grit. My Dad emphasized that many people quit when they're on the brink of victory, simply because they don't realize how close they are.
This has led me to develop several practices. For example, if I pick up a book, I won't put it down until I finish a chapter. If I start a game, I can't stop until I exceed a specific score or level. And when I exercise, there's no way I'd ever stop before finishing a set.
Integrating these concepts involves aligning your head, heart, and feet. What I mean is that it's one thing to know the saying. It's another to make it a value or belief. And it's another thing altogether to make it a practice.
Well, that should explain a little of my dysfunction ... but, if you can't mess up your own kids, whose kids can you mess up?
Hopefully, you had a happy Father's Day weekend.
Here are some of the posts that caught my eye recently. Hope you find something interesting.
During the Robinhood & Gamestop debacle in 2021, I wrote an article about r/WallStreetBets where I essentially said that most of the retail investors that frequent the site don’t know what they’re doing ... Occasionally, however, there are posts that present the type of solid research or insights you might see from a respected Wall Street firm.
With Gamestop and AMC both surging recently, I thought this was a topic worth revisiting.
As an example of good research done by the subreddit, here’s a link to a post where a user (nobjos) analyzed 66,000+ buy and sell recommendations by financial analysts over the last 10 years to see if they had an edge. Spoiler: maybe, but only if you have sufficient AUM to justify the investment in their research.
Some posts demonstrate a clear misunderstanding of markets, and the subreddit certainly contains more jokes than quality posts. Nevertheless, I saw a great example of a post that pokes fun at the concept that correlation does not equal causation.
I’ve posted about the Super Bowl Indicator and the Big Mac Index in the past, but what about Oreos? Read what’s next for mouth-watering market insights.
The increasingly-depraved debuts of Oreos with more stuffing indicate unstable amounts of greed and leverage in the system, serving as an immediate indicator that the makings of a market crash are in place. Conversely, when the Oreo team reduces the amount of icing in their treats, markets tend to have great bull runs until once again society demands to push the boundaries of how much stuffing is possible.
1974: Double Stuf Oreo released. Dow Jones crashes 45%. FTSE drops 73%.
1987: Big Stuf Oreo released. Black Monday, a 20% single-day crash and a following bear market.
1991: Mini Oreo introduced. Smaller icing ratios coincide with the 1991 Japanese asset price bubble, confirming the correlation works both ways and a reduction of Oreo icing may be a potential solution to preventing a future crash.
2011: Triple Double Oreo introduced. S&P drops 21% in a 5-month bear market
2015: Oreo Thins introduced. A complete lack of icing causes an unprecedented bull run in the S&P for years
2019: The Most Stuf Oreo briefly introduced. Pulled off the shelf before any major market damage could occur.
2021: The Most Stuf Oreo reintroduced. Market response: ???
- LehmanParty via Reddit
It’s surprisingly good due diligence, but it’s also clearly just meant to be funny. It resonates because we crave order and look for signs that make markets seem a little bit more predictable.
The problem with randomness is that it often appears meaningful.
Many people on Wall Street have ideas about how to guess what will happen with the stock market or the economy. Unfortunately, they often confuse correlation with causation. At least with the Oreo Indicator, we know that the idea was supposed to be thought-provoking (but silly) rather than investment advice to be taken seriously.
More people than you would hope or guess attempt to forecast the market based on gut, ancient wisdom, and prayers.
While hope and prayer are good things ... they aren’t reliably good trading strategies.
Consider this a reminder that even if you do the work, you’ll likely get a bad answer if you use the wrong inputs.
Garbage in, garbage out.
Onwards!
My mother watches the news religiously. To her credit, she watches a variety of sources and creates her own takeaways based on them. Regardless, there's a common theme in all the sources she watched – they focus on fear or shock-inducing stories with a negative bias. As you might guess, I hear it when I talk with her.
While I value being informed, I also value things that nourish or make you stronger (as opposed to things that make you weak or less hopeful).
Negativity Sells.
Sure, news sources throw in the occasional feel-good story as a pattern interrupt ... but their focus skews negative. History shows that stories about improvement or the things that work simply don't grab eyeballs, attention, or ratings as consistently as negativity-focused stories do.
The reality is that negativity sells. If everything were great all the time, people wouldn't need to buy as many products, they wouldn't need to watch the news, and this cycle wouldn't continue.
It's worth acknowledging and understanding the perils our society is facing, but it's also worth focusing on the ways humanity is expanding and improving.
As a brief respite from the seemingly unending stream of doom and gloom, Information Is Beautiful has a section focused on "Beautiful News". It's a collection of visualizations highlighting positive trends, uplifting statistics, and creative solutions. It's updated daily and can be sorted by topic. I suggest you check it out.
Beautiful News via Information Is Beautiful
If you're looking for more "good news," here's a list of 10 sources focusing on good news.
Let me know if you have a site you'd like to share.
Have a great week!
30+ Years Of The Internet ...
When people think about CERN, they generally think about nuclear research, the Large Hadron Collider, and other physics research.
But, CERN was also where Tim Berners-Lee invented the World Wide Web. In March of 1989, he published “Information Management: A Proposal,” which outlined his vision for what would soon become the World Wide Web.
CERN also had the first website ever to exist. Luckily, they kept the site up and will let you view it in the old-school line mode.
It's been 35 years since the release of the World Wide Web (the Internet is said to have been invented six years earlier with the invention of TCP/IP).
Think how much that one invention has had on the world.
Information Gathering
I remember being in law school, going to the library and scanning through microfiche (or actual books) to study or do research.
I remember reading encyclopedias (and photocopying relevant articles).
I remember paying for newsletters that were mailed to me (or paying extra for fax delivery).
Having access to more data or faster delivery was a huge advantage.
Today, you have all the information you could ever ask for at the tip of your fingers ... Google and Wikipedia are just the tip of the iceberg.
There is almost too much information now. It is hard to separate the signal from the noise. It seems like anyone can find justification for almost anything. The result is lots of data, but too little knowledge.
Part of what is needed is a way to help people make better decisions about what to trust, what it means, and what to use.
Social Interaction
People record every moment, every intimate detail of their lives online, contrasted by a fear of strangers and letting children roam.
While riding around the neighborhood on your bike to see if your friends could come out to play is by no means outlawed - it does seem passé.
Chat rooms, Facebook, Online multi-player ... many people's key friendships are born and kept online.
I remember my son, 13 years old at the time, sending 10,000+ texts a month and thinking it was a phase. I was wrong.
The internet has radically changed the structure of relationships - for better ... or often worse.
Privacy ( ... or the lack of it)
One of the most significant changes is that we (as individuals) have become productized. We take advantage of all these free resources at the cost of being pixeled and cookied into oblivion. We've chosen convenience over safety.
Remember, if you’re not paying for a product - you are the product.
Little bits of our private information, demographics, and psychographics are sold to advertisers to create smarter ads and new offers; and, realistically, we have very little control over that.
It’s been proven time and time again that giants like Google and Facebook will find ways to sneak your data to advertisers even when it’s “illegal” with a slap on the wrist.
Data protection is a massive issue not only for corporations but for individuals. While many companies are trying to manage your privacy while still monetizing your data, there are just as many companies who couldn’t care less.
The GPDR - while frustrating for many - is a step towards protecting individuals.
For every action, there is a reaction. Likewise, every benefit has a cost. The internet is a fantastic tool - but it can also be a scary weapon.
What will the next 30 years hold for the Internet?
It has been ~30 years since the Internet's inception, and there's still radical growth coming.
We’ve gone from bit speeds to megabyte speeds (and if you're lucky, even gigabyte speeds). We’ve gone from crappy-quality video taking hours to download to streaming HD-quality video live.
How do you imagine that the Internet will evolve?
What influence do you think the Internet of Things will have?
It’s hard to foresee how innovation and regulation will change the internet, but it’s clear there will be change.
We live in exciting times!
Posted at 09:01 PM in Business, Current Affairs, Gadgets, Healthy Lifestyle, Ideas, Market Commentary, Science, Web/Tech | Permalink | Comments (0)
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