Capitalogix

A Look At Jim Simons & Renaissance Technologies

Jim Simons is a mathematician and cryptographer who realized that the complex math he used to break codes could help explain financial patterns – and he made billions with those ideas in his notoriously secretive hedge fund firm, Renaissance Technologies. 

Though he stepped down in 2021, I still think his legacy is fascinating, not just for its impacts on the Hedge Fund industry - but on trading as a whole. 

He is famous not only for the duration of his success and the size of his results … but also for the way he made his money (with much lower volatility and risk than his peers and competitors). 

His background is impressive.  Simons taught at Harvard and MIT and worked with the NSA.  Here is a video where he shares some thoughts in a 2015 TED talk interview.  It's worth a watch. 

TED via YouTube

Despite advanced math still being a mystery to many,  we rely on it more than ever as the foundation of many exponential technologies.

The Heart of AI is Still in Humans

Simons built a team of mathematicians whose motivation was doing exciting mathematics and science (rather than hired guns who could be lured away by money or pure trading quants, biased by the industry).

This hits on something important. 

Humans are still important ... and companies that pursue exponential thinking and exponential technologies still have to champion integrity, culture, and purpose.

Better Math is a Competitive Advantage - So is More and Better Data

We stayed ahead of the pack by finding other approaches and shorter-term approaches to some extent … but the real thing was to gather a tremendous amount of data

– Jim Simons

On top of his intelligent hiring and novel approach to trading, Jim Simons recognized that an impressive data pipeline - and the technological infrastructure to digest and analyze that data was a moat to competitors. 

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!

Entrepreneurship Over The Last 30 Years

I've been an entrepreneur ever since I can remember.  I sold tadpoles and frogs in elementary school, colored sand terrariums in middle school, stereos and sound systems in high school and college, and I started a database development company in business school. 

But it wasn't until the early 90s that I made being an entrepreneur my career.

I quickly realized I needed peer groups and advisors to help take my businesses to the next level. 

Verne Harnish was one of the first people I found.  I joined the Young Entrepreneur's Organization (but so many of us have lost our "Y" that it's now just called the Entrepreneurs' Organization.) Among many entrepreneurial endeavors, Verne founded EO, Gazelles (a global executive education and coaching company), and Birthing of Giants (now called the Entrepreneurial Masters Program at MIT).  

I was recently at a party with him in Arizona.  While there, I asked him, "What's changed about entrepreneurship over the last 30 years?".  Here is a short video with his response. 

 

I was happy to hear that the answer was "Nothing".  While the hot industries, technologies, and players have changed, many of the winning principles are timeless. 

This is a helpful reminder that, even when innovating, we should focus on what doesn't change - rather than what does. 

Verne has lots of insights.  I recommend you check out his books - Scaling Up,  Mastering The Rockefeller Habits, and The Greatest Business Decisions of All Time.

He also offers some great one-page tools that you can download here.

Good Stuff ... Hope it Helps!

Sign Up For My New AI Newsletter

I'm launching a new newsletter - with a twist.  The newsletter will be fully automated and produced by an AI we are training to pick out the articles to highlight and share.

 

Don't Let the Past Get In the Way of the New.

Even though a lot of what I think and write about is innovation, exponential technologies, and automation ... until now, what we write and send has been the result of human effort rather than artificial intelligence or technology. 

Sure, portions of the process leverage technology ... but humans have written the vast majority of what you read here. 

It takes many hours a week.  Frankly, many more hours than you would guess!  

Still, I enjoy working on the Weekly Commentary and the list of links that I share.  It is a labor of love (or OCD?) that I have been producing for about twenty years!

If you aren't a subscriber yet, please click here to get it!

We currently send out two weekly e-mails.  The one that comes out on Fridays is a hand-curated list of links that I found interesting during the week.  The Sunday edition has two articles written by me and my son, Zach, along with a few more links. 

Deep down, I know that AI is now good enough to curate a high-quality list of articles in a more efficient, effective, and certain way than what I produce.

So, we are about a week away from launching this.

 

 

This is my John Henry Versus The Machine.

And I'll tell you what – I'm worried.

The new AI-generated newsletter is really good. 

 

Why Play a Losing Game? 

I know that I will lose ... But I also know that I will win.  And so will you!

This does not have to be an "either-or" decision.  This is a "both-and" decision.  Meaning ... I don't have to decide whether to stop producing by hand, in order to also produce with AI.

One of the challenges with AI is that the fitness function you choose significantly impacts the result you achieve.

If the purpose of the newsletter was only to produce a quality newsletter in less time, with less effort, and with greater certainty that readers engage ... then the result is inevitable.  The AI newsletter wins.

However, I didn't choose to produce the newsletter for the newsletter.  The newsletter is a natural result of my nature. I did the research because I wanted to do the research.

I am naturally curious and passionate about these things.  It's what I think about.  It's who I am ... and what I do.

The Weekly Commentary and Link List are strategic byproducts of something that I'm going to choose to do anyway,

 

AI Won't Replace the Real Magic.

One of my beliefs about AI is that you shouldn't use it to replace your Unique Ability.  In other words, don't try to automate, delegate,  or outsource something you are great at, if it gives you energy.  The goal is to magnify "magic," not replace it.  The goal is to spotlight and support those areas by taking away things that are frustrating, bothersome, distracting, or taking cycles away from something that would produce a greater result with less energy.

The point is, I can do both.  I will still do research because it gives me pleasure, knowledge, and a greater likelihood of continuing to learn and grow. I will continue to write and curate. 

Why?  Because it's also an important part of my thinking process.  I think when I speak.  I think when I write.  But more importantly, I think when I am preparing to speak or write.  I wouldn't be me if I didn't go through that process.  I also don't believe my ideas or opinions would continue evolving without the challenge and effort.

And I will also enjoy evolving new and different channels of communication.

Hopefully, we all benefit.

So, I hope you sign up for the new newsletter. We'll be sending out the first e-mail within the next week or two. 

As I've said, I love writing and researching.  I'm an innovator at heart. 

Many read my articles because of my commitment to AI, new technologies, and the future.  Most of my exploration has been centered on Capitalogix and our Amplified Intelligence Platform.  But there are a lot of exciting new use cases of AI, and I'm exploring many of those apps right now. 

For example, as you could have guessed, one such use that I'm excited about is AI-curated newsletters.  Many people I trust and respect have started using Daily.AI, including Peter Diamandis, Dan Sullivan, Joe Polish, and Chris Voss. It's clearly a successful modality. 

 

A Thousand Mile Journey Starts With a Single Step.

Hopefully, you are excited about the new newsletter and the value you will get from it.

I'm confident it will only improve – because it learns from what you value. 

To start, the newsletter will focus on these three topic areas: 

1. How to build a resilient business in a fast-changing world
2. The Psychology of technology & technology addiction
3. Business ethics and AI ethics in today's world. 

But that is just the starting point.  It is set up to consider the same type of offshoots as I normally would.  So, it will remain diverse and educational. 

Please sign up and let me know what you think about it.   

Here Are Some Links For Your Weekly Reading - July 9th, 2023

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

Lighter Links:

• France Set to Allow Police to Spy Through Phones. (Lemonde)
• Your Most Ambivalent Relationships are the Most Toxic. (NYT)
• Is Positive Psychology Science or Snake Oil? (PsychologyToday)
• Einstein and Musk Chatbots Are Driving Millions to Download Character.AI. (Bloomberg)
• New Report Warns of Brain Control Weapons Being Developed by Communist China. (DailyWire)

Trading Links:

• The Copyright Battles Against OpenAI Have Begun. (Quartz)
• Baby Boomers Own Pretty Much Everything - But Millennials Could Be About to Catch Up. (Markets)
• Forbes World's Billionaires List 2023: The Top 200. (Forbes)
• Wall Street Soothsayers Are Bewildered About What's Next. (Bloomberg)
• SVB, BBBY, Lordstown Lead List of US Bankruptcies as Companies Fold up at the Fastest Pace Since 2010. (Markets)

Is It The News Or Propaganda?

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 ....

 
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. 

Since the past election cycle, 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 becoming even more of an issue with AI-based depictions of presidents in both image and video.

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. 

I think one of the worst consequences of the past few years is the unwillingness of mass swaths of Americans to listen to voices they disagree with. The internet has already created echo chambers, but it's being exacerbated by vitriol. As a result, I think we're seeing the fringe of both parties move further away from the middle. 

What do you think?

A Look Back At Simon Sinek's 'Start With Why'

In 2009, Simon Sinek talked to my EO Chapter, and then came to my office to speak with our team.  This was right at the beginning of his meteoric rise, two short months after the release of his famous book "Start With Why." 

Here's the article I wrote in 2009:

___________________

Inspiration is stronger than persuasion.  It gives people a sense of purpose and belonging that has little to do with external incentives or benefits.

Simon Sinek, who is quite charismatic and well-spoken, is delivering this message to a rapidly growing fan base. 

My team thought Simon was inspiring, engaging, and insightful.

You can watch a short video that introduces his material below. 

In addition, you can explore more of his ideas in his book,
Start with Why: How Great Leaders Inspire Everyone to Take Action.

An Example of Finding the Right Person for a Job.

Who do you believe will do a better job, someone who takes a job because of the salary and benefits ... or someone truly inspired to accomplish the job's purpose? 

Phrased that way, of course, you know the answer.  Still, how can you leverage this to better select customers and employees?

For example, Simon uses the story of Sir Ernest Shackleton to illustrate this concept.  Shackleton was preparing to lead the first expedition across Antarctica in 1914.  Legend has it that when seeking crew members for his journey, Shackleton placed the following ad in a newspaper:

"MEN WANTED FOR HAZARDOUS JOURNEY. SMALL WAGES, BITTER COLD, LONG MONTHS OF COMPLETE DARKNESS, CONSTANT DANGER, SAFE RETURN DOUBTFUL. HONOUR AND RECOGNITION IN CASE OF SUCCESS.
- SIR ERNEST SHACKLETON"

When the expedition became stuck in the ice and could not be rescued for 22 months, not a single man was lost.  The reason Simon gave for their unlikely survival was that Shackleton hired survivors that could deal with the situation and were aligned with the mission and purpose.

Can you imagine writing an ad like that to attract the right people to your cause?

Watch This Video.

Here is a video of Simon speaking at a TED Conference.  It is an excellent intro to his stuff. 

Other Resources:

• Here is a link to Simon's Blog.  (2023 Note: this now links to his old blog, which is poorly formatted but interesting to see.  His new website/blog can be found here.)
• Here is a link to Videos of Simon.
• Here is a link to an article on why to know someone else's Why.  (PDF Version)
• Here is a link to Simon's Book: Start with Why.

_____________________

It's now more than ten years later, and Simon is one of the most prominent leaders in leadership development and has published five books, to much acclaim. 

Part of his success is the charisma and pith with which Simon speaks and writes - but a large part is his focus on what makes humans human.  He's not preaching a leadership mantra focused on the bottom line and revenue; he's focused on the aspects of human nature that don't change.  He's focused on purpose and the elements of leadership that apply to everyone - not just CEOs. 

As we move into an era of increased volatility – both in markets and business - these leadership principles will become more important. 

Understanding your "WHY" is vital if you want to make a difference (and not be replaced by an AI). 

If you haven't read any of his books, they're all good, but I suggest "Start With Why" and "The Infinite Game."

What's In The Box? The Consequences of Labeling

“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.”
― Karen Marie Moning

The current socio-political climate has me thinking about the consequences of labeling things, creating boxes, and simplifying ideas into news-ready headlines.

via Se7en

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.

 

via Quote Investigator

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.

Issues that should be bipartisan have been made "us" versus "them," "liberal" versus "conservative," or "right" versus "wrong." The algorithms of most of these sites create echo chambers that increase radicalization and decrease news 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 they don't share the same values as. 

 

via BrainyQuotes.

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 preclude deeper thought on important issues. 

In an ideal world, we would all have the bandwidth to view each case of an issue as a whole issue within itself.  Most things are nuanced, and the "correct" answer changes as you change your vantage point.

I recognize that's not realistic.

Instead, I encourage you to remember to continue to think and learn ... even about things you already know.  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. 

Applying This Lesson  

“I am ashamed to think how easily we capitulate to badges and names, to large societies and dead institutions.”
― Ralph Waldo Emerson, 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.  

We are our choices ... and you can make choices today that change who you are (and what you or your business is capable of) tomorrow. 

Hope that helps – Onwards!

"Earl, Honey"

 

My first wife (and mother of my children) Denise is a smart and talented author.  I still remember the first time she asked me to read an early copy of her work.  She never let me do it again. 

That being said, she recently released a new book, Earl, Honey.  The book is loosely based on the real story of her family history.  I enjoyed it.  It's a southern coming-of-age story set in the 1920s - which is not my typical genre.  Nevertheless, it's a poignant story with insight into the human condition, and its dramatic realities remind us how good we have it. 

It's a story she learned, first via her grandmother, long after the events of the book take place.  Those events shaped the lives of generations of her family. 

It's a tough and heart-wrenching Southern Gothic read that covers incest, domestic abuse, and more.  Check it out. 

Here's the book's blurb from Amazon:

"Ever since Pa hit him in the head with the two-by-four, Earl had lived with blinders on. Not real blinders, of course, because that would be foolish. It was his own brain that blinkered him."

Earl Hahn is slow, the last one to catch on to things. Since the day his father hit him in the head with a 2x4 of loblolly pine, he's struggled with a "thickness in his brain." It takes him longer to make the connections others arrive at easily. When his father is prosecuted for the crime of incest, it feels like deliverance for Earl, his mother Lizzie Belle, and the entire Hahn family. Unfortunately, his father's abhorrent actions are not done exacting a price.

Everyone in the household will pay for their patriarch's crimes - no one more than Earl.

So begins a powerful coming-of-age tale about a shy, damaged boy who must overcome unimaginable personal tragedy - both as its victim and its perpetrator. Raw, honest, and filled with heart, Earl, Honey recounts an extraordinary search for redemption amid the perilous world of the 1920s American South.

 

Here Are Some Links For Your Weekly Reading - May 1st, 2022

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

Lighter Links:

• What is Web 3.0? Here's What the Internet Will Look Like In the Future. (LaptopMag)
• Amazing Video Shows a Tiny Jumping Robot Like Nothing You've Ever Seen. (BGR)
• 103 Bits of Advice I Wish I Had Known. (Kevin Kelly’s Technium)
• Does (Hand) Size Matter? Inside the NFL Draft's Fear of Tiny-Handed QBs. (GQ)
• This $2 Billion Personal Submarine is So Huge that It Can Dwarf a MegaYacht. the Vessel is Almost Three Times Longer Than a Football Field, It Has Lavish VIP Suites, a Helipad and Even an Open Deck Swimming Pool. (LL)

 

Trading Links:

• Bored Ape Metaverse Frenzy Raises Millions, Disrupts Ethereum. (Bloomberg)
• Can Capitalism Survive? 80 Years After Schumpeter's Answer. (AIER)
• Americans are Showing Inflation Fatigue, and Some Companies See a Breaking Point. (FoxBusiness)
• Foreclosure Filings are Up 132% From a Year Prior. Here's What that Means for the Housing Market (And It's Not What You Might Think). (MarketWatch)
• Warren Buffett and Charlie Munger Called Out Stock-Market Gamblers, Dismissed Bitcoin as Worthless, and Underlined the Risks of Inflation. Here are Their 12 Best Quotes from Berkshire Hathaway's Annual Meeting. (Markets)

A Look At The Future Through Today's News

Inspiration comes from many places. 

I'm grateful for the many groups I'm in, and smart people I know, because they're shortcuts to insights that can be hard to find. 

One can also find inspiration through events, books, and more. 

But, while it's easy to discredit mainstream news sources ... there's plenty of insight to be gained just from keeping track of various news sources. You have to take them with a grain of salt, and find the articles that provide a different perspective too, but it's still a valuable exercise. 

It's part of the reason I share my weekly links and this newsletter. They give me a reason to continue to do research and stay on my toes. 

With that, here are some interesting articles I found recently on advancements in technology. 

• In VR, You Can Become Your Own Psychologist - There's a new VR psychology treatment where you play both patient and psychologist. It has promising results in leading to detachment from habitual ways of thinking about personal problems. This is on top of already interesting VR technology around meditation and psychedelics. 
• Synthetic tissue can repair hearts, muscles, and vocal cords - 3D-printed tissues have been growing in popularity recently. Also making progress is synthetic tissue made of a new biomaterial in the form of an injectable hydrogel. It's durable and porous, both important qualities in creating wound repair that can handle the movement and stress put on hearts and vocal cords. 
• AI Is Discovering Patterns In Pure Mathematics That Have Never Been Seen Before- Mathematicians using computers to discover patterns is not new, but now deep learning models are not only assisting in analysis but formulating conjectures and approaches for formerly unproven ideas. This is a promising indicator for many spaces including chemistry, metallurgy, and material sciences (on top of trading of course). 
• DARPA Funded Researchers Accidentally Create The World's First Warp Bubble - Warp drives have been part of science fiction for a long time - and science for a decent amount of time as well. Warp drives have been theoretically possible since 1994 but were deemed "impossible" due to their use of theoretical materials and massive amounts of energy. Now, there's tangible progress as a real (but very tiny) warp bubble was successfully modeled. This is very fledgling, but it's always exciting to see science fiction become reality. 
• Renewables 2021 by IEA - I remember when renewable energies were not only ineffective but very costly. Now, 95% of the new electricity capacity from 2021-2026 is expected to be from renewables. Now, IEA bases their estimates on historical data, so they over underestimate the adoption curves. I would take that number as conservative. Just remember that capacity is different than coverage. Several countries are making a lot of progress on renewables, and several are making none. 

Have you found any other articles you found interesting?

Always looking for more sources to read.