Ideas

  • Happy Birthday, Mom

    Yesterday was my Mother's 85th birthday. 

    Her children surprised her with over 60 family and friends at dinner last night. Here is a photo of us with her at the party.

    20250125 Birthday Party

    My mom is quite the woman. She went to Cornell, taught Spanish Literature at Temple University, and has volunteered for countless good causes. At 40, as her kids became more self-sufficient, she decided to go to law school and become a lawyer to help those who needed it most. That doesn't even begin to capture it! For example, she still serves as a museum docent and is an active member of many clubs and organizations. In addition, after my Dad died, she chose to serve as a hospice counselor to help families going through that difficult time. After doing that for a while, she decided that she wanted to continue – but in a more positive way. So, to help make things better and easier to bear, she became a clown to bring light to people struggling. That is not a sentence I imagined writing a few years ago.

    My mom also loves poems, wordplay, and puzzles.

    As part of her celebration, we had everyone (OK, almost everyone) write poems for her. 

    I did not write a poem (though I did write something) … and I also chose not to use ChatGPT (or any other large language model) to help with what I wrote. 

    I feel like I should explain that. What I did write, came from the heart.

    If my goal had simply been to come up with a poem, I would have used ChatGPT or one of its competitors. The truth is, many people at the event did exactly that, and I was surprised at the quality of their output.

    With that said, there's something meaningful about the process of thinking deeply about something (in this case, my Mother) and choosing which things to highlight (or set aside), what to poke fun at, and which things to express gratitude for. The act of thinking and writing is valuable … separate and apart from the output generated.

    The same is true for your life as well. Being and Doing are both important. 

    Your identity and strategies combine to create the life you are living. Said a different way, the things you choose to focus on (and what you make them mean) shape your perspective and guide your actions. 

    That is also why it's vitally important to consciously create a compelling future that calls you forward (and keep score by tracking your progress in ways that resonate with your values).

    Here is a small excerpt from my love note to my Mother.

    The Golden rule says “Do unto others as you would have them do unto you.” But sometimes, it’s important to remember to be as kind to yourself as you are to others.

    As I think about you and what I wish for you, Mom, it’s that you’re as kind and understanding to yourself as you’ve been to those around you.

    It’s important to recognize the progress you’ve made with the good you’ve done, rather than what could have or should have happened – or how many things you still feel the need to do.

    I think one of the most useful definitions of “intelligence” is that it is the ability to get more of what you want – and for you, Mom, I think that is a sense of happiness, contentment, and purpose. In your words – a Happy Heart.

    Happy Birthday, Mom … and many more! 

    I suspect we all know the power of purpose. With a big enough WHY, the HOWs don't seem to matter.

    The average age at this party was probably 80 – and at least one of them was 100! Think how important it is for them to have a sense of purpose and accomplishment!!

    But if it is important for them … it is probably more important to you because of something I call The Time Value of Life (which we'll discuss next week).

  • Carl Sagan’s Foresight from 1996

    Carl Sagan was an astronomer and planetary scientist whose most enduring legacy lies in his extraordinary ability to communicate complex ideas to the general public.

    Shortly before his death, he participated in an oddly prescient interview about short-form media and public attention. It is worth clicking to hear his clear thoughts about how governments will use ignorance of science and technology to control people.

     

    via YouTube

    He goes into more detail about this topic in his book, The Demon-Haunted World: Science as a Candle in the Dark."

    “I have a foreboding of an America in my children’s or grandchildren’s time—when the United States is a service and information economy; when nearly all the key manufacturing industries have slipped away to other countries; when awesome technological powers are in the hands of a very few, and no one representing the public interest can even grasp the issues; when the people have lost the ability to set their own agendas or knowledgeably question those in authority; when, clutching our crystals and nervously consulting our horoscopes, our critical faculties in decline, unable to distinguish between what feels good and what’s true, we slide, almost without noticing, back into superstition and darkness … the dumbing down of America is most evident in the slow decay of substantive content in the enormously influential media, the 30 second sound bites (now down to 10 seconds or less), lowest common denominator programming, credulous presentations on pseudoscience and superstition, but especially a kind of celebration of ignorance."  – Carl Sagan, The Demon-Haunted World

    With the national outcry at TikTok's ban being upheld in the Supreme Court, this feels even more relevant. 

    With TikTok, Instagram Reels, and YouTube Shorts, even 30 seconds of attention sounds generous. Smooth-sounding AI-generated slop only makes it worse.

    In many ways, we've even forgotten how to be appropriately skeptical. It's not enough to question authority and look for trusted evidence; you must also question their detractors and replacements. Laziness and ignorance rarely lead to good outcomes.

    There is room in life for faith, optimism, and belief. But when you question what's being pushed toward you, how influenced are you by your existing biases and beliefs? It's hard to reason someone out of a position that they did not reason themselves into. 

    Do you think America is becoming more or less ignorant? If more, what do you think it would take to reverse that trend?

  • Here Are Some Links For Your Weekly Reading – January 12th, 2024

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

    Lighter Links:

    Trading Links:

  • How’d Markets Do In 2024

    At the beginning of 2024, I asked the question – how did markets do in 2023?

    It makes sense to ask the same question as we start 2025. 

    Before I get started, it’s worth stating that the market is not the economy … but with Trump about to step into office, I know people are wondering. 

    I still think about the often-quoted quip “It's the economy, stupid” – coined by James Carville, a strategist in Bill Clinton’s successful 1992 U.S. presidential election against incumbent George H. W. Bush.

    2022 was the worst year for the U.S. stock market since the 2008 financial crisis.

    2023 was much better, but much of the gains came in concentrated sectors.  

    2024 saw nearly every sector posting gains – driven primarily by AI enthusiasm and a robust U.S. economy. 

    To help you get a sense of 2024 returns, VisualCapitalist put together a few helpful infographics.

     

    via visualcapitalist

    66% of companies on the S&P ended up in positive territory this year. The S&P also had its best two-year stretch since the late 90s. 

    Communication Services usurped IT’s #1 spot, driven primarily by Meta & Google. Strong consumer spending and digital ad revenue brought ad spending to almost $400 billion. 

    Materials was the only sector to see negative returns, hampered by China’s economic slowdown and increased interest rates. 

    Here is a more global look at return by asset class.

     

    Vertical graphic with icons showing asset class returns in 2024.

    via visualcapitalist

    Driven by that end-of-year run, Bitcoin surged to all-time highs, and gold also saw its best performance in 14 years. Meanwhile, bonds suffered heavily amid reflationary concerns and a potential widening deficit under the Trump administration.

    In 2024, I predicted a brief market correction, blamed on various geopolitical instabilities and partisan weaknesses, followed by a long and steady push higher as the November elections approached.

    How did that prediction hold up? I'd say pretty well. 

    On one level, I try not to think about or predict markets (because I know better). On another level, sometimes I can’t help myself …

    Part of me is so bullish about AI (and its impact on other things) that it’s hard to maintain objectivity. With that said, I think we’ll have another decent year. However, I expect increased volatility and noise.

    What do you expect for 2025?

    Do you think the continued investment into generative AI will impact these trends?

    Will cryptocurrency continue to explode? What scenarios do you think have the potential to be force multipliers?

  • How To Achieve Your Personal Goals in 2025

    A few weeks ago, I shared an article about annual planning (and how Capitalogix does it.) 

    This week, I want to discuss setting and meeting goals. 

    I'm a big-picture guy, and I spend a lot of my time thinking about longer-term possibilities, but it's also important to think about your strategy for the coming year. I tend to break that up by Quarters. Lower timeframes than that are more tactical, and I consider that short-term planning or scheduling.

    I think of it like using a map. To find the best route, you must start by figuring out where you are and where you want to be.

     

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    Activity, alone, isn't as important as many people hope. Think of it this way … from where you are, there are infinite potential paths – but motion in a particular direction isn't "progress" if it doesn't take you toward your desired destination.

    The right action is far more valuable than merely taking action … and that means beginning with the end in mind. You are unlikely to hit the target if you aren't aiming at it.

    Resolutions only work if you actually "want" to make them happen. It's one thing to hope that something happens; it's another to commit to making it happen. 

    With that said, here are some tips. 

    • Focus on What You Want.
    • Focus on Why You Want It.
    • Focus on Ways You Might Get it.
    • Focus on Evidence of Progress.

    Below, I'll take you through an example of each of the four steps.

    Moving Towards a Solution, Rather Than Suffering From the Problem.

    Like many people, I have three distinct collections of clothes: my "fat clothes," what I'm currently wearing, and my aspirational wardrobe. This personal reality reflects how our current state often sits between where we've been and where we want to go. Before I started getting healthy, my first instinct was to think, "I need to lose weight." Knowing that "you're fat" isn't helpful … my head quickly translated that to something a tad more positive yet generic, like: "I choose to be healthy and vital and to live a healthy lifestyle."

    Blah, blah … They are just words. What I needed was something specific, measurable, and actionable. How about: "I will lose 15 pounds and stop eating after dinner?" OK, but that isn't inspiring, and there isn't much for me to do. I can do better than that—and I need to—if I want to commit to the outcome.

    Figure-Out a Big Enough WHY, Rather Than Worrying about the HOW's.

    This post isn't about health and fitness; it is about the mindset and techniques for setting empowering goals and plans in any situation.

    So, while I could list many ways to lose weight (and I might even remember to do some of them), leveraging a driving force creates momentum. In other words, the first step in "Doing" is knowing WHY you want something.

    I really do want to be healthy, fit, and vital (it sure beats the alternatives), and I want to have the energy and confidence to live and enjoy my life fully. The world is my playground, and I want to take advantage of more opportunities to play with family and friends. However, to do those things, I must find better and more sustainable ways to live a healthy lifestyle.

    The WHYs are just as important for business goals, too.

    Focus on Potential Solutions Rather than Problems or Challenges.

    Obstacles Exist. The bad news: I don't eat fish, and I don't like vegetables (unless French Fries are vegetables). My joints aren't close to healthy from years of violent contact sports. I rarely get 7 hours of sleep, and being the CEO of a startup is stressful. The good news: none of those things matter, and even if they did, it just would mean that I have a lot of room for progress.

    It is natural to focus on obstacles, but most obstacles are surmountable—with a big enough WHY, I might even choose to start eating vegetables. Instead of dwelling on limitations, use them as a reminder to focus on potential solutions. They are beacons pointing the way.

    How do you do it? To focus on solutions, you can make two action-based lists: one is of things To-Do … and another is of things Not-To-Do.

    Here are some of the sample To-Do Items:

    • I will drink more water than coffee.
    • I will stretch or do basic calisthenics on days I don't go to the gym.
    • I will make a healthy shake as a meal replacement rather than a snack or mini-meal.
    • I will focus on relaxation and meditation as much as I focus on strength & physical exercises.

    Here is the actionable list of Not-To-Do Items.

    • I will not buy bigger pants or wear stretchy pants because of an expanding waistline.
    • I will not eat snacks out of their container – and will portion out what I want first.
    • I will not compare my current level of fitness to what I used to be able to do. Instead, I will focus on my actions and improvement.

    Create Healthier Habits.

    It is easy to follow a routine. So, here's another tip … make your routine better. Here are some examples of things you could do to make 'being healthier' happen with less effort.

    • Pre-sort your vitamins into daily doses, and keep them by the coffee machine.
    • Buy healthy snacks, like fruit, raw nuts, or organic energy bars (instead of chips).
    • Enjoy listening to music or a book/podcast during your "exercise time." Dedicating time to something doesn't mean you can't be multitasking.
    • Choose to walk the dogs or park at the end of the parking lot, so you get to walk.
    • Meet with friends at the gym or a hiking spot rather than at a bar or restaurant.

    You get the idea. Get in the habit of looking for ways to create better habits. What habits could you alter slightly to make a big difference? Which things can you automate or outsource?

    For three books about the subject, I recommend Tiny Habits by B.J. Fogg, Willpower Doesn't Work by Benjamin Hardy, or Atomic Habits by James Clear. 

    Focus on Your Progress.

    In this case, it really is about the journey. Instead of tracking how far you have to go … notice how far you've come. Utilize an internal locus of control. It is about creating energy, momentum, and a sense of possibility. You may have a big, hairy, audacious goal in mind. That's fine, as long as you realize that reaching each milestone along the way is still an accomplishment.

    • Find shoes that don't hurt your feet.
    • Pick a gym or a personal trainer that you enjoy.
    • Run more than two laps without stopping.

    It doesn't matter what they are … they all count as long as you know you are moving in the right direction.

    Summary

    The point of this exercise was not really to focus on fitness. These techniques and goal-setting tools work in any situation. The principles are:

    1. First, determine what you want and why it is important. Then, focus on only the few things that are truly important to you. 
    2. Second, find something you can do right now that will move you in the right direction.
    3. Third, notice which things create (rather than take) energy. Spend your time on those, and automate or create routines to take care of the rest.
    4. Fourth, plan forward but measure backward. Set milestones so that you can recognize and celebrate your progress.

    In my business, this translates to having a mission and vision – defining what we want, why it's important, and the basic strategy to achieve it. Then, we create yearly "Big 3" goals that move us toward that long-term vision. Then, the team creates SMARTs (goals that are specific, measurable, attainable, relevant, and timely) and KPIs (key performance indicators) or OKRs (Objectives and Key Results) that measure evidence of success. Doing those things lets the team know where to spend their time and whether they're on the right track.

    It isn't magic, but it works.

    Hope this helped.

    If you're interested, here are a few more articles I've written on health and longevity. 

    Onwards!

  • The Reverse Turing: Advanced AIs Trying To Figure Out Who Is Human

    The Turing Test, originally called the Imitation Game, tests a machine's ability to emulate a human. Developed in 1949, it is still a relevant test for AI. The Turing Test measures both knowledge and the ability to express it in a manner indistinguishable from a human response.

    There is no agreed-upon definition for intelligence, so we can only approximate what skills we test AI on. 

    While many people still believe they can tell when an AI has written something, several LLMs (like ChatGPT) have passed modern versions of the Turing Test. Many, including me, would argue LLMs still can't consistently pass the test. 

    But what about the alternative? Could you convince an AI that you're not human?

    Recently, a video went viral, showing a human pitting himself in VR against an AI version of Aristotle, Mozart, Leonardo da Vinci, Cleopatra, and Genghis Khan (who was played by a human).

     

    via Tore Knabe

    To set up the test, the human scripted the beginning and end of the dialogue and gave the AI agents a full transcript of the conversation up to that point. The entire video then played out in one recording, with no cuts.

    In this "reverse" Turing test, the chatbots were scripted using various LLMs, asked questions, and then challenged to guess who the human was. Tore Knabe, the virtual reality game developer who devised the test and played the Genghis Khan role, answered one of the questions with a quote from Conan the Barbarian. 

    "What a leader should do is to crush his enemies, see them driven before him, and hear the lamentations of their women."

    Listening to his stuttered response, contrasted by the clunky and verbose AI responses, makes it very apparent to us, the audience, that he's human. The machines voted three-to-one that his response wasn't "nuanced or strategic" enough to represent an AI modeled on Genghis Khan's exploits. To ease your mind about hidden variables, the AIs weren't processing his voice directly. The audio was transcribed and sent to the AIs as text. 

    Ultimately, this is a flawed test, and we don't really know how much of this is an actual test (versus just entertainment). In any case, it's still an interesting thought experiment. 

    Do you think you could fool an AI? What if you had time to craft a response without penalty? What if your life was on the line?

    For a bonus, here's a social Turing game where you can chat with someone for two minutes and try to figure out if it is a human or an AI. 

    We live in interesting times!

  • Making The Intangible … Tangible

    I remember getting excited when my son finally seemed smart enough that I believed he was more intelligent than our dog. For the record, it took longer than I thought it would.

    Likewise, human and chimpanzee infants start out remarkably similar in their early development. But here's where it gets interesting – their developmental paths take dramatically different turns once human babies begin acquiring language. This cognitive fork in the road fundamentally shapes their future capabilities.

    Language is a big domino. It allows "chunking" and makes learning new things more efficient, effective, and certain.

    Language is powerful in and of itself. Using language consciously is a multiplier.

    Today, I want to focus on one such use of language – the power of naming things. 

    The Power Of Naming Things

    “I read in a book once that a rose by any other name would smell as sweet, but I've never been able to believe it. I don't believe a rose WOULD be as nice if it was called a thistle or a skunk cabbage.” - L.M. Montgomery, Anne of Green Gables

    Before I go into detail, I shot a video on the subject, with a few examples from our business. 

    via Capitalogix's YouTube Channel

    Having a shared language allows you to communicate, coordinate, and collaborate more efficiently. But it's hard to have a shared language when you're discussing something intangible. 

    That's where naming comes in. When you name something, you make the "invisible" visible (for you, your team, and anyone else who might care). 

    I've often said the first step is to bring order to chaos. Then, wisdom comes from finer distinctions. Naming is a great way to create a natural taxonomy that helps people understand where they are – and where they are going.

    I like thinking of it in comparison to value ladders in marketing. 

    Value-ladder

    Each stage of the value ladder is meant to bring you to the next level. By the time someone gets to the top of the value ladder, they're your ideal customer. In other words, you create a natural pathway for a stranger (meaning someone who doesn't know you well) to follow, to gain value, trust, and momentum onwards … ultimately, ascending to become someone who believes in, and supports, what you offer and who you are. 

    Ultimately, successful collaboration relies on a common language. That is part of the reason naming is so important. The act of naming something makes it real, defines its boundaries and potentialities, and is often the first step toward understanding, adoption, and support. 

    Creating "Amplified Intelligence"

    There are always answers. We just have to be smart enough. - John Green

    Here is an example from our business. When we first started building trading systems, all we had was an idea. Then, we figured out an equation (and more of them). Next, we figured out some methods or techniques … which became recipes for success. As we progressed, we figured out a growing collection of useful and reliable ways to test, validate, automate, and execute the things we wanted to do (or to filter … or prevent the things we wanted to avoid or ignore).

    It probably seemed chaotic to someone who didn't understand the organizing principles. Fear, uncertainty, and doubt, which inhibit potential customers and stakeholders (such as a business's employees), compound the problem.

    Coming up with the right organizing principle (and name) makes it easier to understand, accept, and adopt. For example, many traders and trading firms want to amplify intelligence – meaning they want to make better decisions, take smarter actions, and ultimately perform better (which might mean making and keeping more money). To help firms amplify intelligence, we created the Capitalogix Insight Engine (which is a platform of equations, algorithms, methods, testing tools, automations, and execution capabilities). Within that platform, we have functional components (or modules) that focus on ideas like portfolio construction, sensible diversification, alpha generation, risk management, and allocation strategies. Some of those words may not mean much to you if you're not a trader, but if you are, it creates an order that makes sense and a path from the beginning to the end of the process.

    It makes sense. It explains where we are – while informing them about what might come later.

    The point is that naming things creates order, structure, and a contextual map of understanding.

    It is a compass heading used to navigate and guide in uncertain territory.

    On the other hand, beware of the consequences of becoming overly connected to labels. 

    Hope that helps.

  • The World Economy Going Into 2025 …

    Are you a glass half full or a glass half empty person? The recent economic news cycle has certainly been playing on people's fears.

    There is a lot of good news and reasons to be confident and excited about what's to come.

    Sure, you can focus on the $100 trillion global debt … but you could also focus on how U.S. states' GDPs compare to global GDPs.

    Today, let's look at the $115 trillion global economy. For what it's worth, America is still the dominant force.

     

    20241228 World Economy in 2025 Infographic

    via VisualCapitalist

    America has topped the list for over 100 years and will comfortably continue that reign in 2025. China comes in second, and together, they account for approximately two-fifths of global GDP. That said, China is comparatively a newcomer to their spot – with about 15 years here. 

    While we top the list, the fastest-growing economies would go to countries like India, Australia, and Brazil – which are all expected to rise the ranks in the coming years. 

    The trend to watch here is what will happen in the Middle East, with Syria overthrowing their government and the Israel-Palestine conflict continuing and impacting the supply chain of surrounding countries as well. 

    It will also be interesting to see how Trump's re-election and the continuing Russia-Ukraine conflict affect global trends.

    Looking beyond traditional economic metrics, I believe artificial intelligence will emerge as one of the most critical factors driving power, progress, and wealth creation in the coming years. It's likely to become both the most coveted resource and the capability we'll most actively seek to deny our adversaries.

    The real story of 2025's global economy isn't just told with GDP rankings. While America and China dominate those numbers, traditional economic metrics are becoming less relevant in a world where regional conflicts, supply chain dynamics, and technological innovation can reshape global power dynamics overnight. In the longer term, birth rates and the growth of middle-class infrastructure are strong predictors of what lies ahead. GDP alone doesn't measure what truly matters in the modern global economy.

    What indicators are you watching?

  • How AIs (Like ChatGPT) Learn

    I first wrote about this video a few years ago, when artificial intelligence first captured the media's attention. Back then, we were impressed that algorithms could help you pick out your Christmas gifts on Amazon, suggest new music for you on Spotify, and do their best to capture your attention on websites. 

    AI is seemingly everywhere now. And what is surprising to me isn't its prevalence or impact … it is the speed and breadth of its adoption. Last night, at an early holiday dinner, we talked extensively about how easy to adopt and how accessible tools like ChatGPT are (and almost none of us were Nerds). 

    With all that being said, I think it's wise to have a basic understanding of the things that most impact our lives. Even if you're not a big fan of AI, understanding its growing powers will benefit you. 

    The video below is a bit simple in its explanations, but it describes some fundamental concepts worth understanding.

     

    CGP Grey via Youtube

    The video is engaging and easy to understand. It focuses on genetic algorithms (which is one type of machine learning) and ignores some of the other more complicated techniques and approaches. For example

    In my experience, it is more useful for an executive to understand what tools like this can do rather than how they work. Likewise, it is better to understand when to use tools like this rather than knowing precisely how to use them. But, a cursory understanding like this video still adds value. 

    As machine learning gets more complicated and evolves, it gets harder for humans to assess their output or process accurately. Here is something to consider:

    How do you know that the answer it gives is the answer you seek?

    Just because an algorithm responds quickly and confidently doesn't mean it's right.

    While bots can deliver impressive results, their decision-making processes can be opaque. This presents both a risk and an opportunity. Artificial intelligence seems cool, but artificial stupidity is scary … and making mistakes at light speed rarely results in good outcomes.

    It's human nature to feel safer when we understand something. It's human nature to envision machines making human-like decisions, just faster. But we are quickly going beyond that … way beyond that!

    In the past, algorithms were static while data changed. But now we're in a different world – one where the algorithms themselves evolve and dramatically adapt to handle different types of data. While this might sound like a subtle distinction, it represents a fundamental shift in how AI systems learn and operate.

    One of the challenges of understanding exponential technologies is that their progress isn't linear. This makes it difficult for humans to accurately gauge how rapidly these tools will advance in capability. As algorithms grow more complex, they will increasingly operate in ways that may not be fully understood by their developers (and even less so by their users). As a result, we'll likely find ourselves using AI to solve problems and accomplish tasks that aren't even on our radar today. 

    It might sound strange, but it doesn't matter why a bot makes a decision or what inputs it uses to make the decision. What matters is whether it accomplishes its goal and how its performance and level of decision-making rank in relation to its prior performance and other options (and, perhaps, whether the bot is biased).

    Part of what makes artificial intelligence exciting is that it can do a lot of things well that humans are really bad at. And, even when you're using an AI in your domain expertise, it can be a great first step to save you time and effort. 

    It's a brave new world, and not only is Big Brother watching, but algorithms are, too.

    Live long and prosper!

  • Are You Ready For The Holidays?

    As we near the holidays, you'd think people would be getting cheerier. Jollier, you might say. 

    Instead, the holidays tend to bring out the worst in people. 

    Why is it often easier to be nice to a stranger (or a dog) than someone you deal with regularly? Emotional baggage is likely the answer. Things like anger, resentment, pain, fear, uncertainty, and doubt are inhibitors that can affect how we interact with others. Frustratingly, our challenges often stem directly from what we bring to each situation ourselves.

    It reminded me of one of the earliest videos I shot almost 10 years ago. It highlights the importance of allowing energy to flow freely, enabling individuals to remain focused and resilient in the face of challenges. It doesn't matter what happens … what matters is what you choose to focus on, make it mean, and choose to do.

     

    Sometimes, things don't seem to go well. Despite the annoying evidence to the contrary, it's probably not them … Which means it is probably you (or at least what you focus on). 

    The antidote to negative situations is simple – focus on your progress and the reasons behind your efforts.

    The recipe for success (and happiness this holiday season) isn't eggnog … it is to choose to let energy flow and to have an unrelenting focus on your bigger future.

    Bring on 2025!