Capitalogix

If The Internet Goes Down Does The World Crumble?

On Tuesday, for less than an hour, early in the workday, it felt like the internet was down for many.  The cause? Cloudflare went down. Cloudflare offers web services to over 16 million websites. That includes sites like HubSpot, Medium, UpWork, 9gag, Discord, Sirius XM, Shopify, Coinbase, Canva, Soundcloud, Buzzfeed, and Capitalogix.

Even down detector was down. 

 

That means when Cloudflare went down, so did a non-trivial portion of the internet. W3techs reports approximately 10% of the internet was affected by Cloudflare being down. 

What happened?

via DigitalAttackMap

There was a massive spike in CPU utilization. At the time, it looked like a DDOS attack. People were speculating that it was a Chinese attack trying to mess with the Hong Kong protests. 

Turns out, it was bad code - specifically, a single misconfigured rule within their firewall services. They did a global rollout of the code, and so it affected everyone. 

This shows the importance of staged rollouts - testing your releases live with test groups before being released globally. 

Here's a great write-up from Andy Ellis on preventative measures in the future.  

The reality is, using a CDN is still helpful, Cloudflare's downtime doesn't mean you shouldn't use them.

It does mean we should be thinking about what failsafes are needed to keep the internet infrastructure working in the event of attacks or failures. 

Attacks are becoming more common, and as we now expect constant improvements/releases to software, we can expect more company errors as well. Facebook had similar issues on Wednesday.

Think of how much relies on the internet as a backbone. It's crazy to think about the impact sustained downtime would have; billions of dollars in business not happening, banking systems down, etc.  Realistically, if the entire internet goes down we likely have bigger issues to worry about, but this event shows that large swaths of the internet could be affected at once. 

Would a decentralized network help? Are smart contracts necessary for that? Is there a CDN for CDNs?

It feels like we often end up with more questions than answers.

It is why many companies opt for a hybrid cloud with plenty of on-premise compute.

What do you think?

How Do You Compete Against Tech Giants? Moonshots.

“I have not failed. I've just found 10,000 ways that won't work.” - Thomas Edison

 

It doesn't make sense to challenge a bigger and better-funded competitor in an area where they have an asymmetric advantage.  In other words, don't compete with giants at their own game.

Choose to play a game you expect to win.

Playing a different game is a theme at Capitalogix. We believe that you control the game you're playing, that you control the rules, how you keep score, and even how you evaluate success.  These things inform where you spend time, where you invest money, and even what looks like an opportunity to you. 

Wouldn't you rather compete in areas where you can create a unique sustainable competitive advantage?  Personally, I want to invest in extending an edge that lets us win.

Why?

Mediocrity Is Expensive!

 

What you lack in size or computer power, you can make up for in creativity, agility, and innovation. 

Capitalogix sought to create a niche in the investment industry, not through computing power, but through unique approaches to age-old problems. We use AI and data science to enhance decision-making. 

We have an incredibly narrow and consistent focus.  Within that area, we are willing to take on problems others avoid and pursue goals that others say are impossible. 

Our niche limits risk and lets us fail faster ... and learn faster. This allows us to take confident action while others are tentative. 

Most big companies - and most of our competitors - are afraid to be wrong. They have to protect their infrastructure, cash-cows, and short-term performance metrics.  It makes sense (from their perspective) that playing it safe means that you're secure in your position. - but that's not how it works. 

You can't challenge the status quo when you are the status quo. 

 

10x Improvement Is Often Easier To Achieve Than 10%

 

Astro Teller via TED

"In 1962 at Rice University, JFK told the country about a dream he had, a dream to put a person on the moon by the end of the decade.The eponymous moonshot. No one knew if it was possible to do, but he made sure a plan was put in place to do it if it was possible.That's how great dreams are.Great dreams aren't just visions, they're visions coupled to strategies for making them real." - Astro Teller

 

Incremental change is hard - it's finding new ways to do the same thing, and you often end up competing in very red oceans - saturated markets where you're competing on price. Moonshots sound harder, but you end up with your own niche and the constraints of a new idea force creativity and energy.  If you're going after a goal that no one has accomplished before, it's impossible to be in a red ocean, and it's easier to mobilize a team around something exciting and new than decreasing some arbitrary metric 2%. 

 

There are a couple of important lessons to keep in mind when pursuing the unknown.

• Forget what you know - self-reported "experts" are limited by their world view. If you're trying to get a different result, you won't do it by playing by the same rules your predecessors followed.  Heuristics are great for making life easier - but they're very limiting when trying to create something new. 
• Attack the hardest problems first - your biggest problems are your biggest opportunities. If you don't deal with the big problems now, you'll never get around to it, and you'll waste time, energy, and potentially realize you have to pivot much too late.  
• Be comfortable being uncomfortable - Most people find failure taboo, and they're deathly afraid of it. Tony Robbins talks about our tendency to avoid pain more actively than we pursue pleasure, and it's true in business. But failure is a part of business. The people I consider most successful got there through incredible pain tolerance and increasingly intense problems that they continued to conquer. 
• Have a short memory for pain - Focus on the gain, not the pain. People often focus on not enough money, not enough time, not enough. That scarcity mindset is dangerous and can lead to getting lost in pain and fear. Learning to acknowledge the pain/fear and move forward from a place of abundance and opportunity helps create opportunities. 

As well, a clear identity is important. You have to understand what you're pursuing, and how you want to attack the problem. At Capitalogix, we've gotten very in tune with our goals. 

We invent techniques that identify and adapt to what happens in markets. We apply the lessons learned from past experiences, data science breakthroughs, and hard work to eliminate the fear, greed, and discretionary mistakes that are the downfall of most traders and decision-makers.

Small businesses don't have a monopoly on these mindsets and these opportunities, but companies like Y Combinator, X, or HeroX are few and far between. 

Those businesses that have the scale and these approaches are great to model, and there's enough innovation out there for both of you. 

So what's your moonshot?

Here Are Some Links For Your Weekly Reading - June 30th, 2019

Most people don't spend money on freemium games. These games rely on a small subset of "whales" to survive - players that spend absurd amounts of money on their games. Gacha games let players pay to "roll the dice" to unlock rare characters and collectibles similar to a "Loot Box" mechanic. 

Now, the US is trying to make this mechanic illegal for taking advantage of children with their "pay-to-win" mechanics. 

 

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

 

Lighter Links:

• Roger Goodell Net Worth and Salary History. (CNW)
• The Dark Forest Theory of the Internet. (OneZero)
• See the World's Oldest Trees by Starlight. (NationalGeographic)
• The Beauty and Madness of Sending a Man to the Moon. (Wired)
• Teams Autonomously Mapping the Depths Take Home Millions From The Ocean Discovery XPRIZE. (TechCrunch)

 

Trading Links:

• Business Conditions are at Their Worst Level Since the 2008 Financial Crisis. (MorganStanley)
• California Today: Would You Pay $195 to Take a Helicopter to Work? (NYT)
• What Yogi Berra Would Have Said about this Bull Market. (WSJ)
• Economies and Stockmarkets Do Not Always Match up Well.(Economist)
• How Politics Became the Main Driver of Financial Markets – And Why Investors Better Get Used To It. (MarketWatch)

Here Are Some Links For Your Weekly Reading - June 23rd, 2019

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

 

Lighter Links:

• DeepMind's AI Has Used Teamwork to Beat Humans at a First-person Shooter. (TechReview)
• Physicists Discover Surprisingly Complex States Emerging out of Simple Synchronized Networks. (Phys)
• Amazon Prime Air Delivery Drone to Start Dropping Packages 'Within Months,' Officials Say. (USAToday)
• 136 Maps Reveal Where Tourists & Locals Take Photos in Major Cities across the Globe. (OpenCulture)
• A Subway Map of Human Anatomy: All the Systems of Our Body Visualized in the Style of the London Underground. (OpenCulture)

 

Trading Links:

• Microsoft is Now Worth over $1 Trillion, a Stunning Run since Satya Nadella's Ascent. (Quartz)
• These are the 10 Best-performing Stocks of this Century. (BusinessInsider)
• What is Currency? (Visual)
• Michael Jordan's Net Worth is Now Officially $1.9 Billion. (CNW)
• NASA Opens Space Station to Tourists and Businesses to Promote Commercial Activities. (Wall Street Journal)

Camp Kotok: Economists In Nature

I was just in Maine at Camp Kotok, a private gathering of economists, fund managers, and other financial industry professionals. 

 

 

There was no cell phone service ... so people had to talk with each other.  Everyone went outside.  And, people continued to fish, even when it rained.  Craziness.

At last year's Camp Kotok, I did this interview with Bob Eisenbeis,  Cumberland Advisors' Vice Chairman & Chief Monetary Economist.  Check it out. 

 

Cumberland Advisors via YouTube

AI is removing the fear, greed, and discretionary mistakes from financial decision making. We’re at the beginning of a cycle of progress that is hard to imagine ... and easy to underestimate.

Ultimately, I think AI will transform the planet much like electricity did.  What about you?

Lots of cool discussions up there. Call me if you want to talk about it. 

Committing To A Bigger Future

I'm a big fan of picking a Big Hairy Audacious Goal (sometimes called a "BHAG") and taking actions that move you in that direction. 

I'm also a big fan of Strategic Coach's Bigger Future exercise.  It is a 20-year planning exercise where you plan out your commitments and goals to yourself, your family, your career, and your legacy. 

While doing this, I realized that my ideal next 20 years involves taking Capitalogix to the next level (and beyond). 

As a result, I recently held a two-hour town hall session with everybody in Capitalogix.  You'll find a 5-minute compilation of highlights at the end of this article. 

Before I share with you, I want to take time to bring you up to speed on Capitalogix's history. Some may know the story, but many of you are new.  It's important context for the video and for Capitalogix's future. 

A Brief History of Capitalogix

Times and conditions change so rapidly that we must keep our aim constantly focused on the future. - Walt Disney

In the 90's, I left a corporate securities law practice to start a company that was an early pioneer in automation, intelligent agents, and rule-based processing.(it is almost embarrassing to compare that to AI today).  Nonetheless, we ended up on the Inc. 500 list, won lots of awards and had a great time.  Little did I know how important that would be to what we are doing now.

Life intervened ... and 1999 was a rough year for me.  My dad died of cancer, I got divorced, and I sold my company. That year inspired my TED Talk on the Time Value of A Life Worth Living, and has inspired the past 20 years of my life. 

I threw myself into trading. At first, I was a fundamental trader.  But I quickly threw myself into Elliott Wave theory, technical analysis, quantitative analysis, and everything else I could get my hands on. I spent hours on end marking up charts and creating early algorithmic trading systems - predecessors to how we trade today. 

I also hired my first two employees - Gabriel and Sean. My dining room became their office. I started to view trading as a business, rather than a hobby. The thought forms that would become our framework for understanding markets were starting to gel. 

 

 

By 2015, we had 20+ employees working out of my house, and I realized we'd outgrown my home. Here is a picture from the dining room before the move.

 

 

After a brief time with employees in three different offices (including one of our partner's offices) we found our current office. 

Moving in to our new office represented a positive shift in culture and focus - and another step toward our goals. 

 

Where We Are Today

The power for creating a better future is contained in the present moment: You create a good future by creating a good present. - Eckhart Tolle

We are committed to revolutionizing decision science (making better decisions faster). We're creating the future we've envisioned.

Yet, for all we've accomplished, we're driven every day to be better than we were yesterday. That drive comes from that big hairy audacious goal and that 20-year vision.

It comes from knowing who we want to be tomorrow. 

 

 

Committing To The Future

 

It means that we're going to have to have new people and new ways of doing things because the recipe for getting here isn't the recipe for getting there. As much as I respect and love you for "here." I respect and love you enough to hold you accountable for "there." - Howard Getson

 

It hasn't always been easy - but building Capitalogix has been an intensely rewarding passion.

Over the next 20 years, there are a ton of people I want to impact and a lot of goals I want to accomplish. Capitalogix is the way I intend to do that.

I look forward to you all being a part of it as well. 

Onwards!

Remembering My Father

This year, I spent some extra time thinking about my father - and his influence on me and countless others. It's been 20 years since my last Father's Day with him. 

 

 

My Dad was incredibly loving and demanding.  I recognize how much his vision of what I could become helped shape me. 

For example, after winning the State Championship in the shot put, my dad came down from the stands onto the field.  He hugged me and told me that he knew I could do it. Then, he looked deeply into my eyes and asked whether I was a little disappointed?  "Disappointed?" I asked. "But, Dad, I won."  He looked at me and said, "Yeah, winning is great ... but you didn't throw a personal best."   He was proud and he loved me.   He recognized that winning was important ... but he wanted to remind me that the other throwers weren't my real competition. 

In life, 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 taught me that most people's lives are defined by their minimum standards.  Why?  Because once those standards get met, it is easy to get distracted and complacent.

One of his favorite sayings was "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.  The point is that setting higher standards is one of the best ways to ensure a better life.

As time goes on, I recognize how much of him is inside me. 

 

Nick Offerman via My Tales of Whisky

Many of the lessons he taught me became the lessons I taught my children - and my company. It's easy to focus on the big stories and the big lessons – but as I look back and consider what had the biggest impact, it was what happened in between ... It was his incredibly consistent and unconditional love and his focus on what was possible.

The standards I hold people to are high, and it can be tough for them to meet those standards.  Hopefully, they understand that it's because I love them (as my dad loved me) and that I see the greatness in them and available to them. 

Happy Father's Day weekend!

Visualizing The AI Revolution

I'm surprised how often I see people who are bearish on Artificial Intelligence. Many are stuck in science fiction's depictions - sentience, personification, etc.. Modern AI is very different from science fiction predictions, but is still exciting. (Here's an infographic debunking 8 common AI myths)

Modern AI does many things and has many applications, but ultimately it's relatively faceless. It works in the background, impacts everything it touches, and silently collects vast lakes of data. AI may not be Star Trek's "Data," but it is transforming our economy at warp speed. 

TechJury has put together an infographic on the history of AI until today. It highlights a number of key inflection points, AI's impact on today's economy, and which countries and companies are leading the pack. 

via TechJury (Click To See Full Infographic)

AI By The Numbers (Taken From TechJury)

• By 2025, the global AI market is expected to be almost $60 billion; in 2016 it was $1.4 billion
• The number of AI startups has grown 14x since 2000
• Investment in AI startups has grown 6x since 2000
• 77% of the devices we use feature one form of AI or another
• 84% of global businesses see AI as a competitive advantage
• Google analysts believe that next year robots will be smart enough to mimic complex human behavior like jokes and flirting

 

To me, it's clear that AI is the major driving force of tomorrow. AI continues to perform increasingly impressive tasks. Last week, I saw an AI that can make realistic video renderings from one picture, and Google's DeepMind beat humans in a multiplayer shooting game, operating on a single metric. 

If you're as excited about the potential for AI as I am, here are some articles I wrote that you may have missed:

• AI in Film: A Retrospective
• Which Industries Are Prime For Disruption?
• Will I Survive The AI Revolution?
• Creating An Artificial Intelligence Methodology
• How To Thrive After The AI Revolution

Here Are Some Links For Your Weekly Reading - June 9th, 2019

Tuesday was the 30th anniversary of the Tiananmen Square Protests. Here's a video of Chinese college students being asked about the event. It is a pretty interesting look at censorship and fear of government consequences for lack of free speech. 

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

 

Lighter Links:

• China's Big AI Advantage: Humans. (News)
• The Natural Genius of Ants is Helping Us Build Better Algorithms. (Wired)
• 5 Myths about Strategy. (HBR)
• Percentage of Americans Who Never Traveled beyond the State Where They Were Born? A Surprise? (Forbes)
• At Disneyland's New Star Wars' Attraction – Brace Yourself for $200 Lightsabers, $42 Cocktails and 4 A.M. Lines. (MarketWatch)

 

Trading Links:

• Billionaire Mike Bloomberg Tells Harvard Graduates that Money Isn't Important. (TheLadders)
• The Radical Plan to Change How Harvard Teaches Economics. (Vox)
• Apple Patents the Foldable iPhone Display; Here's What It Looks Like. (ValueWalk)
• Quantum Computing Will Change the Digital World beyond Recognition. (Metro)
• Atlanta Fed President Bostic Does Not See a Rate Cut this Year like the Market is Telegraphing. (CNBC)

 

75th Anniversary of D-Day

June 6th, 1944 ... the day we stormed the beaches of Normandy.  It was the largest seaborne invasion in history. The invasion created a foothold that allowed Allied forces to expand through France. 

The memorial in France this year was a particularly touching event with the many surviving World War 2 soldiers being well into their 90s. 

"A generation whose unconquerable spirit shaped the post-war world. They didn't boast. They didn't fuss. They served" - Theresa May

A 97-year old veteran paratrooper, Tom Rice, commemorated the day by once again dropping into the field he landed in on that fateful night. 

Check out the video. It's an inspiration. 

 

via TIME

Seems like a friendlier welcome than a sea of German soldiers. As an extra fun fact, Teddy Roosevelt stormed the beaches of Normandy at 56 with a heart condition,  arthritis, and a cane. He was the oldest man to take part in the invasion. 

Our society is built on the backs of many strong men! I'm thankful for their sacrifices.