Business

  • Get Yourself Optimized with Stephan Spencer

    I was recently on a podcast with Stephan Spencer where we talked about the future of AI – of course – but also about personal development, mindsets, and the hidden opportunities created by the byproducts of your strategies and business models. 

    It was a nice talk, and I hope you enjoy it and find it helpful.

     

    via Get Yourself Optimized

    The whole video is worth a watch, but the idea of strategic byproducts is a simple but powerful one. Essentially, while you're working on your core business, or operating your core business, you'll often realize that you have created other capabilities or outcomes of that business that can become a complementary business or platform in-and-of-itself. Instead of just being the exhaust of your business, they can become a valuable resource and the path to something new and potentially bigger and better than the original business. 

    That conversation starts around the 18-minute mark and picks back up around the 38-minute mark. 

    Stephan Spencer does an excellent job of that, not only in his businesses but with his podcast. What could simply be a video he records with the interviewee becomes audio, a transcript with highlights, a timeline of topics, and a checklist of action items that he (or you) could personally take from the interview. 

    He's already shot the podcast – so why not capitalize on the "exhaust" of it as well. 

  • Creating Your Artificial Intelligence Methodology

    We often talk about Artificial Intelligence's applications – meaning, what we use it for – but we often forget to talk about a more crucial question:

    How do we use AI effectively?

    Many people misuse AI.  They think they can simply plug in a dataset, press a button, and poof!  Magically, an edge appears.

    Most commonly, people lack the infrastructure (or the data literacy) to properly handle even the most basic algorithms and operations. And even before that – they haven't even properly assessed whether AI is needed in their business. Remember, AI is a tool, not the goal. 

    Even though this is the golden age of AI … we are just at the beginning.  Awareness leads to focus, which leads to experimentation, which leads to finer distinctions, which leads to wisdom.

    Do you remember Maslow's Hierarchy of Needs?  Ultimately, self-actualization is the goal … but before you can focus on that, you need food, water, shelter, etc.

    In other words, you most likely have to crawl before you can walk, and you have to be able to survive before you can thrive. 

    Artificial Intelligence and Data Science follow a similar model. Here it is:

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    Monica Rogati via hackernoon

    First, there's data collection. Do you have the right dataset? Is it complete?

    Then, data flow. How is the data going to move through your systems? 

    Once your data is accessible and manageable you can begin to explore and transform it. 

    Exploring and transforming is a crucial stage that's often neglected.

    One of the biggest challenges we had to overcome at Capitalogix was handling real-time market data.

    The data stream from exchanges isn't perfect.

    Consequently, using real-time market data as an input for AI is challenging.  We have to identify, fix, and re-publish bad ticks or missing ticks as quickly as possible.  Think of this like trying to drink muddy stream water (without a filtration process, it isn't always safe).

    Once your data is clean, you can then define which metrics you care about, how they all rank in the grand scheme of things … and then begin to train your data. 

    Compared to just plugging in a data set, there are a lot more steps; but, the results are worth it. 

    That's the foundation to allow you to start model creation and optimization.

    The point is, ultimately, it's more efficient and effective to spend the time on the infrastructure and methodology of your project (rather than to rush the process and get poor results).

    If you put garbage into a system, most likely you'll get garbage out. 

    Slower sometimes means faster.

    Onwards.

  • Here Are Some Links For Your Weekly Reading – October 10th, 2021

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

    Lighter Links:

     
     

     

    Trading Links:

  • It’s Not What Happens, It’s What You Do

    It's been a while since I've shared this video. I shot it in 2015. But, it's as relevant today (if not more so) as it was then. 

     

    A lot of times, the things that look like giant problems or setbacks turn out to be catalysts for something positive (and often better).

    You can't control everything; but, you can control what you focus on, the meaning you give things, and how you respond.

    It's not what happens, it's what you do! 

  • How To Amplify Your Capabilities Like Elon Musk

    I recently shot a podcast with Mike Koenigs about taking your ideas and transforming them not just into products but into platforms. It was also featured on Forbes. 

    Many of the most valuable companies (like Tesla, Apple, and Amazon) leverage platforms to scale past their initial products and create profitable ecosystems. 

    The video is 50+ minutes – but covers the topic in great depth, and Mike adds a lot of significant distinctions. I think you will like it.

     

    via Capability Amplifier

    Since recording this podcast, I've continued to make finer distinctions. 

     

    Wisdom Comes From Making Finer Distinctions_GapingVoid

     

    One such distinction, to help businesses plan around new technologies, was to ask two key questions. 

    1. What technologies that already exist are going to impact your industry the most in the next 3-5 years?
    2. What technologies that you expect to exist are going to impact your industry the most in the next 5-10 years?

    I ask these questions because adopting new technologies doesn't mean you have to invent something new. It can mean capitalizing on existing technologies and finding new ways to use them. Understanding what is "likely" lets you lean in the right direction and helps you visualize the most likely paths forward. 

    This helps you figure out where to spend focus, time, energy, and other resources.  Remember, it is easier to follow and leverage a trend, rather than to fight it.

    Since the beginning of time, humans have been confronted with disruptive new technologies.  While technologies continue to change, human nature has remained relatively stable. As a result, predicting human nature is often easier than predicting technology.

    So, rather than trying to predict what technologies will win, you can focus on which needs and capabilities are most likely to attract attention and resources. Innovation and technology will follow to satisfy the desire.  

    Knowing that, the question is what can you build that leverages your unique abilities and the likely path of your chosen market.

    It sounds simple, but it's a powerful distinction and potential differentiator between you and your competitors. 

  • Interesting Charts About The S&P 500

    The S&P 500 Index had another bad week and ended the month down 4.8%. It was the sharpest monthly decline since March 2020 – and finished a seven-month streak of gains.  Here is a heat map chart showing how widely spread the pullback was last week.

     

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    via FinViz

    It will be interesting to see how the S&P 500 Index fairs in October as the Delta variant continues to linger, the Federal Reserve plans to slow its purchase of government-backed bonds, and fear continues around the U.S.'s cash reserves and debt limit.  Adding further pressure are the continuing shortages of many retail goods and computer chips. 

    But, for all the times we've expected a contraction, the market has shown remarkable resiliency in the past year and a half. 

    On a more lighthearted note, here are two charts I thought were interesting and worth sharing. 

    First, here's a chart from A Wealth Of Common Sense that shows the top 10 stocks in the S&P 500 in 5-year increments. 

     

    Screen-Shot-2017-07-20-at-10.42.58-AMvia A Wealth Of Common Sense 

    There are a lot of interesting takeaways you can glean from this chart.  But I was surprised to see how much turnover there is. Also, in the 1980s, the top 10 companies were almost all energy companies, while today they're almost all tech companies. 

    Here's a bonus chart that shows the top 10 companies at the end of 2020. 

     

    23537via Statista 

    If you assume the market cap is approximately $32 Trillion, these ten companies account for around 30% of the market cap. That is a staggering amount. 

    For the last chart, here's a spurious correlation between the McRib being in season and the performance of the S&P.

     

    Cj6g3gjzbuq71via PuzzledHippo3
     

    With the McRib coming back on November 1st,  you might want to invest now. Seems like a solid bet. 

    Perhaps the correlation exists because McDonald's only offers the McRib when pork prices are low enough?  If so, McD's is reacting to the market (and not the other way around).

    There are many ways to make money in fast food (including food sales, real estate, and commodities trading).

  • The Data on Wealth Distribution in the US

    Talking about wealth distribution can lead to contentious discussions.

    The fact that one group has "more" of something literally means it is not equal to what someone else has … but does it imply that it isn't fair or just? The arguments get nuanced fast.

    Even how you look at the statistics can be confusing.  You can focus on which group has what percentage of the pie.  Or you could focus on which groups are gaining or losing based on the share they used to have of the pie.  With that said, remember that the pie can grow or shrink, and the percentage of a population in a demographic can change as well. What you choose to focus on, and what you decide it means, impacts your stance on the meritocracy or unfairness of what is happening (and what we should do about what is happening). 

    So, while many people point to the increasing wealth of the 1%, it's worth discussing whether this represents inequality or simply the asymmetric distribution of wealth. 

     

    Wealth-Inequality-Main

    via visualcapitalist

    Today, the top 1% of the U.S. owns about 31.2% of the total wealth. That's up from 28.6% in 2010. 

    However, the total wealth pool has increased from $60 trillion to $112 trillion in that same period. 

    In other words, each demographic has seen an increase in wealth over the past ten years. A larger percentage of the pie has gone to the 1%, but each demographic has benefitted and our collective economic pie has grown. 

    So, what drives the asymmetric distribution of wealth?

    There are multiple factors, but to name just a few: 

    • The longest bull market in history benefits the top 1% more because they own a much higher percentage of corporate equities and mutual funds
    • The minimum wage hasn't increased since 2009, despite rising costs of living and other goods.
    • Technological changes influence both more menial jobs as well as creating more opportunities for tech giants
    • Globalization plays a part both due to trade channels and due to the integration of numerous financial markets

    Are things better?  Are things good enough?  Do we have to do something? If so, what?

    Is this a red herring to distract us from other issues? 

    I'm curious to hear what you think about this issue.

  • Top Influencers (By Platform)

    When you ask children what they want to be, many likely say YouTuber, Influencer, or some other variant of that theme.

    Influence is a complicated thing. From an abstract perspective, it's the ability to affect someone else's behavior. A high schooler can influence their classmates. As entrepreneurs, we can influence our employees, our industry, and more. You can have immense influence over a small number of people or a little bit of influence over many people – both still count as "influence."

    But, in this case, many of the most popular influencers aren't famous for changing the world; they are celebrities or just famous for being famous.

    Below is a chart of the top 50 "influencers" by social media platform. 

     

    Top-50-Social-Media-Influencers-2via visualcapitalist

    In the digital age, it's worth acknowledging social reach as power. People with a large platform have the opportunity to exert enormous influence – and it's why you often see the spread of misinformation reach far, fast. 

    It would be interesting to see how many of these people use their platforms to be a beacon to their followers (rather than a beacon to attract followers).

    It would also be interesting to see how much (or little) engagement many of these "influencers" actually have with their followers (and how that level of engagement relates to the growth or decay of their followings). 

    While I assume that the readers of this post aren't in the business of being "Influencers,"  Most of us recognize the value of influence – and getting more of it.

    As a result, it is probably worth thinking about influence as an asset.  And now is time to think strategically about how to grow and use that asset better. 

  • US vs. The World

    Here is a chart that looks at the top 100 companies from the perspective of the U.S. vs the rest of the world. 

    Every year, PwC releases a list of the 100 biggest companies in the world by market cap. This year, Visual Capitalist put together a great visualization separating the companies into sector and country.

    Click To See the Full Image. 

    Screen Shot 2021-09-18 at 10.04.17 PMvia visualcapitalist

    The top 100 companies account for over $31.7 trillion in market cap. Unsurprisingly the U.S. takes the largest portion of the pie, but China continues to make headway. Though, the U.S. still accounts for 65% of the total market cap value of the top 100 companies. 

    A lot of the staying power of the U.S. (and the fading of much of Europe) can be attributed to Tech and Retail giants like Apple and Walmart. 

    I'll be interested to see how the numbers change as both Tech and Retail continue to grow as industries. Will other countries find a way to compete, or will the U.S. extend their lead?

  • A Day of Atonement and Kintsugi

    Thursday was Yom Kippur, the Day of Atonement and one of the High Holy Days in the Jewish religion.

    As part of the holiday, participants read a list of sins (available here), apologize for those committed, and ask for forgiveness.  Read the list … much has changed, apparently, human nature hasn't.  

    Even if you have managed to stay on the right side of the Ten Commandments and haven’t killed or stolen … you have most likely been frivolous, stubborn, hurtful, dismissive, or judgmental (I know I have …).  

    To help mark the importance of the day, participants read a poem called the Unetaneh Tokef. Below is a brief excerpt that captures the spirit. 

    Who will rest and who will wander, who will live in harmony and who will be harried, who will enjoy tranquillity and who will suffer, who will be impoverished and who will be enriched, who will be degraded and who will be exalted.

    On one hand, you can read that and pray for Divine intervention (or perhaps favor) or you can recognize that we each have a choice about who we want to be, how we show up, and what we make things mean.  Your choices about these things have very real power to create the experience and environment you will live in during the next year.

    This year, the sermon at my local synagogue added an interesting idea. It discussed the Japanese art of Kintsugi. In Kintsugi, the Japanese mend broken pottery by gilding the fractures with gold, silver, or platinum.  This treats the breaks and damage as an element that adds value and enhances the beauty of an object (preserving a part of its history) – rather than something that simply diminishes the object. 

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    This concept is a great reminder as we unpack the "trauma" of COVID-19 and 2020 and move on both as individuals and as a society. Our steps backward are just as much a part of our journey as our steps forward. As you heal, it is also important to remember to heal the world around you as well. In the Jewish faith, that concept is called Tikkun Olam. 

    One of the themes of Yom Kippur is that you're only ever one good deed from tipping the scale towards good for yourself and others.  As you recognize and repent for your sins, it's important to appreciate the good you did (and do) as well. 

    100 Days Left

    There are just over 100 days before the start of 2022. Many will spend those 100 days stressing about the upcoming elections, grumbling about how 2020 sucked, and pretending it's the universe's fault they didn't accomplish what they set their mind to … yet, 100 days is enough time to sprint, to make a change, and to end the year on a high note. 

    There is plenty of time to make this your best year yet. What can you do? What will you do?

    I hope you all experience growth in your mental state, your relationships, and your businesses.  

    Best wishes for a great day, and an even better year!