Ideas

Happy Father’s Day 2022

For Father's Day, my youngest son took me to see Top Gun 2 in DFX. It's been a while since I've been in a movie theatre, and this was a movie worth doing the right way. It lived up to the hype.

He also took me to brunch and invited his girlfriend – a rare occasion that I hope becomes more common.

It's been ten years since he started working with me at Capitalogix. Here's his first professional pic and his most recent. Time flies while you are getting older!

As a father, having great kids is a double blessing. On one hand, it's nice to be proud of who your kids are and the things they do. On the other hand, it's also nice to feel proud of the small part you played in helping them become who they are. It's also my first Father's Day as a grandfather. After decades of messing with my kids, now I get to mess with a new generation!

Of course, I also look back … and spent some time thinking about my father and his terrific influence 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 the 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 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 meeting the minimum standards for them as well.

Here is something else worth sharing; it was 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. The point is to set a higher standard and to have a better life.

Well, that should explain a little of the 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.

June 19, 2022
Visualizing Oil Prices in Response to Economic Events

In the past, I've talked about where America gets its oil, and how data is more than just "the new oil".

During the worst of the pandemic, oil prices dropped almost 40%. They've now risen 216% from that pandemic low. With gas prices skyrocketing, it's probably time to look at historical oil prices.

Visual Capitalist put together a simple infographic.

via visualcapitalist

So why are prices so high? Unfortunately, large portions of the world's oil reserves are in regions prone to political conflict.

Currently, the Russia-Ukraine conflict is leading to supply uncertainty and rising prices.

Meanwhile, oil companies are bringing in record profits.

Oil prices are a complicated topic because supply and demand aren't particularly responsive to price changes in the short term. Regardless of price, people need to drive. And, regardless of demand, it takes time and money to drill new oil wells.

As a result, you can see mismatches, like today, where uncertainty has raised prices, but oil companies are doing tremendously well.

The question now becomes … where does it end? Does it take a resolution to the current conflict? Or, will prices reach a ceiling and fall back down based on other factors?

June 12, 2022
Dall-E …. Not Wall-E: AI-Generated Art

Neural networks creating images from text isn't new. I wrote about it in 2019 when AI self-portraits were going viral.

Mauro Martino via YouTube

Just like VR is getting a new lease on life, despite its age, AI-generated art is getting another 15-minutes of fame.

This past week, a new model called Dall-E Mini went viral. It creates images based on the text prompts you give it – and it's surprisingly good. You even can give Dall-E absurd prompts, and it will do its best to hybridize them (for example, a kangaroo made of cheese).

Unfortunately, like our current reality, Dall-E may not be able to produce cheap gas prices. Nonetheless, it is fun to try. Click the image to enter the concepts you want Dall-E to attempt to represent.

via Dall-E mini

While the images themselves aren't fantastic, the tool's goal is to understand and translate text into a coherent graphic response. The capabilities of tools like this are growing exponentially (and reflect a massive improvement since I last talked about AI-generated images).

Part of the improvement is organic (better hardware, software, algorithmic evolution, etc.), while another part comes from stacking. For example, Dall-E's use of GPT-3 has vastly increased its ability to process language.

However, the algorithms still don't "understand" the meaning of the images the way we do … they are guessing based on what they've "seen" before. That means it's biased by the data it was fed and can easily get stumped. The Dall-E website's "Bias and Limitations" section acknowledges that it was trained on unfiltered internet data, which means it has a known, but unintended, bias to be offensive or stereotypical against minority groups.

It's not the first time, and it won't be the last, that an internet-trained AI will be offensive.

Currently, most AI is essentially a brute force application of math masquerading as intelligence and computer science. Fortunately, it provides a lot of value even in that regard.

The uses continue to get more elegant and complex as time passes … but we're still coding the elegance.

Onwards!

June 12, 2022
A Look At The Best Athletes

There is a huge difference between good and great.

Apparently, there is often a huge difference between the great and the greatest.

In sports, there are many fantastic athletes whose names we will remember. Then there are the athletes who stand apart from the rest … like Michael Phelps or Usain Bolt.

I recently stumbled upon a few charts highlighting the stratification between the top 1% and the #1.

Tom Brady

via NY Times

To put that statistic in perspective, no other quarterback has even played in 35 postseason games … but that is another measure of Tom Brady's greatness.

Jerry Rice

sdbernard via Reddit

Some prominent names are missing from this list – like Julio Jones or Megatron – but, clearly, Jerry's performance stands apart from other legends of the game. For context, Julio Jones only had 61 TDs, which is relatively low on this chart, but averages 92 yards per game … which is so high that he'd be off the chart.

Wayne Gretzky

via NumberHound

Wayne Gretzky is a sports legend, but this chart really puts it in perspective. Leader by a large margin in both assists and goals. He also has one of my favorite quotes –

“A good hockey player plays where the puck is. A great hockey player plays where the puck is going to be.”

Here's another interesting Wayne Gretzky stat:

Together, Wayne and Brent hold the NHL record for most combined points by two brothers – 2,857 for Wayne and 4 for Brent,^[2] and are second overall in points scored by any number of brothers (behind the six brothers of the Sutter family who combined for 2,934 NHL points – 73 more than Wayne and Brent, although the Gretzkys' combined totals are greater than any five of the six Sutters.) – Wikipedia on Brent Gretzky

Serena Williams

via Yahoo!Sports

What about Nature versus Nurture?

Genetics and upbringing might play a part in greatness. There are several great sibling combos like the Gretzkys, the Mannings, and the Williams sisters.

Both Venus and Serena are dominant athletes, but Serena is in the running for one of the most dominant athletes in any sport.

Have you seen any other crazy stats like these? I'd love to see them.

June 5, 2022
Don’t Touch That Dial

History may not repeat itself exactly … but it often rhymes. News stories, however, seem to replicate.

There is nothing wrong with your television. Do not attempt to adjust the picture. We are now controlling the transmission. We control the horizontal and the vertical. 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. – The Outer Limits (1963)

via YouTube

It almost feels like an episode of Black Mirror, watching these stations quote the same pre-determined diatribe on fake news and its danger to our democracy.

The very message they are purportedly supporting, in the video above, directly contradicts their actions.

Most people realize this happens to some degree, but it seems different when presented like this.

I believe I am reasonably aware and somewhat immune from propaganda. That probably isn't as true as I'd like to believe.

Meanwhile, Sinclar Broadcast Group owns nearly 200 stations in 80 different markets and wants to buy more. That is a powerful platform to deliver mass messages and influence the zeitgeist of its audience.

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.

We see and hear it every day about politics, wars, economic issues, and many other things we don't focus on enough to notice.

As A.I., Bots, and social media grow, our ability to discern truth from 'truthiness' weakens. Especially with the growth of deepfakes.

What do you think about this?

June 5, 2022
A Brief Look At Bear Markets
Main Street and Wall Street are often at odds. Terms like "retail" and "professional" or "smart money" and "dumb money" highlight the difference in perspective and access to tools, processes, and even information.

The biggest disparities happen at turning points. Today, many companies are posting record profits, but markets are volatile, gas is expensive, and inflation is high. So, we're getting some mixed signals.

It may be too soon to say we're in a recession, but we are experiencing a downturn.

Here is a comparison of recent market corrections showing each decline's intensity and duration.

via Reddit (Dow Jones Market Data & the WSJ)

While this chart is a week or two old, it shows some interesting data. While there are a few shorter drops, most were longer and deeper than where we currently are.

Thus, we could have further to go … but it could also be a sign that we're responding better to market issues than in the past.

via Cascade Financial Strategies

The blue areas represent past bull market durations and returns (total and annualized). The red areas represent past bear markets.

Note: this chart is from 2018 – Nonetheless, it is a good reminder of the bigger picture.

I remain optimistic about the future state of our economy. That doesn't mean there won't be pain. Still, I believe that technology continues to increase the size of our potential pie and the capabilities we can leverage as a catalyst to recovery.

As a bonus, if you want to see a flashback to the Great Recession, here are two pieces of my market commentary from the time. It's interesting to look back and see how my writing has changed.
- Market Commentary 02/06/09
- Market Commentary 05/01/09
How are you feeling about the markets and our economy?
May 29, 2022
Origin Story: Warren Buffet

Warren Buffett is a legend for many reasons. Foremost among them might be that he's one of the few investors who clearly has an edge … and has for a long time.

From 1976 to 2017, his Sharpe ratio (excess return relative to risk) was approximately double the overall market. He even did well in 2021. Berkshire Hathaway now has almost a trillion in assets (up from $700 billion in 2019) – and is still performing well.

While many people consider Buffett to be an investor, I also consider him to be an entrepreneur.

At the age of six, he started selling gum door to door. Obviously, selling gum wasn't the key to his path to riches. So, how did he make his first million? Here's a video that explains it.

via Coolnimation

He made his first million at age 30 (in 1960). For context, a million dollars in 1960 would be worth about $8.5 million today.

Buffet has always been honest about his bread-and-butter "trick" … he buys quality companies at a discount and holds on to them.

It is fascinating to recognize how much the world has changed – and yet how much it has stayed the same.

For extra viewing: Warren Buffett, Charlie Munger, and Bill Gates recently did a full 2-hour interview with CNBC. You can watch it here.

May 29, 2022
Are We Alone In The Universe?

Information Is Beautiful has an interactive data visualization to help you decide if we're alone in the Universe.

As usual, for them, it is well done, fun, and informative.

For the slightly geeky amongst us, the model lets you adjust the estimate by playing with two equations: the Drake equation and the Seager equation.

The Drake equation estimates how many detectable extraterrestrial civilizations exist in our galaxy and then in the Universe based on factors like habitable planets, change of life, and then intelligent life, and then the amount of time a civilization sends signals into space.

The Seager equation is a modern take on the equation focusing on bio-signatures of life that we can currently detect – for example, the number of observable stars/planets, what % have life, and then % chance of detectable bio-signature gas.

via Information Is Beautiful

For both equations, Information Is Beautiful lets you look at various default options – but also to play with your own choices to adjust the outcomes.

For example, the skeptical default answer for Drake's equation shows 0.0000062 communicating civilizations in our galaxy (which is still 924,000 in the Universe). The equivalent for Seager's equation shows 0.0009000 planets with detectable life in our "galactic neighborhood" and 135,000,000 planets in our Universe.

Even with the "lowest possible" selection chosen, Drake's equation still shows 42 communicating civilizations (Douglas Adams, anyone?) in the Universe.

via Information Is Beautiful

One of the most interesting numbers (and potentially significant numbers for me) is the length of time a civilization sends signals into space. Conservative numbers are 420 years, but optimistic numbers are 10,000+.

If any aliens are reading this … don't worry; I won't tell. But, we will find out if you voted in the last election.

May 22, 2022
Where Are The Aliens?
This week, there was a U.S. congressional hearing on the existence of UFOs. While there wasn't any proof of aliens, they did admit to phenomena that they couldn't explain with their current information.

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

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

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

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

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

via TED

In the TED talk, Stephen Webb covers a couple of key factors necessary for communicative space-faring life.
1. Habitability and stability of their planet
2. Building blocks of life
3. Technological advancement
4. Socialness/Communication technologies
But he also acknowledges the numerous confounding variables, including things like imperialism, war, bioterrorism, fear, moons' effect on climate, etc.

Essentially, his thesis is that there are numerous roadblocks to intelligent life – and it's entirely possible we are the only planet that has gotten past those roadblocks.

What do you think?

Here are some other links I liked on this topic. There is some interesting stuff you don't have to be a rocket scientist to understand or enjoy.
To Infinity and Beyond!
May 22, 2022
Top 10 Most Overhyped Technologies (From 2008)

Just because something is overhyped, doesn’t mean it’s bad. Gartner's hype cycle is a great example of this. Every technology goes through inflated expectations and a trough of disillusionment, regardless of whether they're a success or failure. Sometimes a fad is more than a fad.

Humans are pretty bad at exponential thinking. We're not bad at recognizing periods of inflection, but we're very bad at recognizing the winners and losers of these regime changes.

There are countless examples. Here's a funny one from Maximum PC Magazine in 2008. It shows that hype isn't always a sign of mistaken excess. This list purported to show things that were getting too much attention in 2008. Instead of being a list of has-beens and failures, many of these things rightfully deserved the attention.

It's been 14 years since this came out. How did the predictions hold up?

Facebook has become Meta, and is one of the big five. The iPhone has sold more than 2.2 billion phones, and accounts for more than half of Apple's total revenue. And the list keeps going. Multiple GPU video cards, HD, 64-bit computing, and downloading movies from the internet …

It's hard to believe how poorly this image aged.

The trend is your friend while it continues. Just because something is overhyped – doesn't mean you shouldn't be excited about it.

Onwards!

May 15, 2022