Market Commentary

  • The World’s Population in 2022

    The world will reach 8 billion people at some point this year.  That is a new (and potentially scary) milestone. 

    Part of the concern stems from how fast population is growing.  Consider that the world’s population has doubled during the last 50 years … and the geographic distribution of the population has changed as well. Here is an infographic that highlights some interesting trends.

    image from www.visualcapitalist.com via visualcapitalist

    If you want to look at where the economy is going over time, you don't have to guess to wildly.  Population growth is a primary clue.  Consequently, focus on where the most children are being born – or where relatively more children are being born recently.  For example, economists don’t have to work too hard to figure out how many 18-year-olds will exist somewhere in the next 15 years – they start by counting the 3-year-olds.

    While China, India, and the U.S. top the world's population lists (with the U.S. dramatically behind China and India), many countries are creeping up the list. In fact, Lagos, Nigeria's largest city, is expected to the world's biggest megacity by the end of the century. Many of the world's highest growth rates are found in Africa. 

    As another "surprise," India is set to pass China as the world's most populous country. Meanwhile, much of Europe's populations are contracting. 

    The U.S. is still growing – but is not matching the rates of emerging countries in Asia and Africa. 

    The world is expected to reach a population of around 10 Billion before 2100.  With that said, many expect the number to decrease from there. 

    Interesting?

    How do you think this will affect the next 20 years? 

  • Bruce Willis Deepfake: The Smart Decision?

    Bruce Willis is a legend of cinema, and he made many of my favorite movies of the 80s and 90s. He stayed relevant and exciting up until very recently. 

    Then, last year, he started releasing a slew of disappointing "straight-to-DVD" style movies that had him receiving his own award show category in the Razzies (an award show for the worst performances of the year). In 2021, they created the category "worst performance by Bruce Willis in a 2021 movie." 

    Vulture did an interesting interview with the founders of the Razzies where Bruce Willis comes up. 

    Then, it came out that Bruce Willis was diagnosed with Aphasia and was losing his ability to speak. 

    Suddenly, these pieces take on new meaning. They're Bruce getting as much work in as he can before he loses his voice permanently. He's trying to do what he knows how to do to make sure his wife and children are taken care of after he can no longer act. 

    It doesn't make the movies suddenly "great" but it was enough to get the Razzies to rescind their award. 

    I don't believe these last films of his dampen his well-earned legacy. 

    Last year, his digital twin showed up in a Russian telecom ad. 

     

     
    Recently, he's been in the news again for having sold his likeness to a deepfake company. It was reported on the company's website and by The Telegraph, but there are now claims to the contrary as well. 

    While the jury is still out on if his rights have been sold, I think it's likely you'll see more Bruce Willis deepfake content. 

    The question becomes, is it the right decision?

    If his estate still has final approval – and there is quality control – then what's the harm?

    Does the potential ubiquity, or the idea that we can always have another Bruce Willis movie, reduce the value of his movies?

    Does allowing deepfakes in cinema (on TV or in film) take away roles from actors who might become stars?

    We've already seen actors use deepfakes to reprise a role they did when they were younger – like Luke Skywalker or Leia from Star Wars. It's a different idea to build a new series around an actor who isn't actually acting in it. 

    These questions pair well with the discussion around AI-generated art and whether it should be considered art. 

    What do you think? 

  • The Most Common Cyber Attacks Against Businesses

    I recently shared a post on data breaches – and steps you can take to prevent them. It focused on the most famous cyberattacks in history. 

    Visualcapitalist and Global X ETFs just put out a visualization that shows the most common attacks your business may face. 

     

    Global-X-BUG-ETF_Cyberattacks_Main

    Global X via visualcapitalist

    Cyberattacks are at an all-time high – and the more people you have in your business, the more likely you are to have exploitable weaknesses. For example, the World Economic Forum's Global Risk Report for 2022 stated that ransomware attacks have increased by 435% since 2020. 

    It's also worth noting that these numbers are likely understated, as companies are likely to downplay and hide security incidents.  

    Likewise, there is exponential growth in computer use, data production, apps and services (connected through your handphone, devices, or computers), and connected nodes in the internet-of-things (including garage doors, security systems, and a host of connected devices).

    As some things become easier, other things get harder.  Said another way, sometimes peril comes with progress.

    Stay safe. 

  • The Average NFL Player (By Position)

    Football season is officially underway!  In honor of that, here's a look at each position's composite "player" (as of 2019).

    As you might expect, different sports have different ratios of ethnicities.  For example, you might expect more Pacific Islanders in Rugby or Asians in Badminton.

    The same is true for various positions on a football team.  Offensive linemen are more likely to be white – while running backs are more likely to be black. 

    Here is a visualization that shows what happens when you average the top players' faces in various positions.

    6a00e5502e47b288330240a4cda5bf200b-250wi

    osmutiar via Reddit

    Composites are interesting.

    While you may be thinking "this player must be unstoppable" … statistically, he's average.

    The "composite" NFL player would be the 848th best player in the league.  He's not a starter, and he plays on an average team.  You probably don't know his name if you don't root for his team. 

    We found the same thing with our trading bots.  The ones that made it through most filters weren't star performers.  They were the average bots that did enough not to fail (but failed to make the list as top performers in any of the categories).  Meaning, the survivors were generalists – not specialists.

    In an ideal world, with no roster limits, you'd want the perfect lineup for each granular situation.  You'd want to evaluate players on how they perform under pressure, on different downs, against other players, and with different schemes. 

    That's what technology lets you do with algorithms.  You can have a library of systems that communicate with each other … and you don't even have to pay their salary (but you will need data scientists, researchers, machines, data, alternative data, electricity, disaster recovery, and a testing platform).

    You won't find exceptional specialists if your focus is on generalized safety.  Generalists are great, but you also have to be able to respond to specific conditions.

    Onwards.

  • The New Era of Energy

    A couple of weeks ago, I talked about oil production.  This week, I want to look at the current energy landscape. 

     

    Screen Shot 2022-08-18 at 12.41.13 PMView the full infographic at visualcapitalist

    Over the past several decades, there has been a massive shift in how we produce and consume energy.  This has been driven by the tech boom – as well as by climate awareness.

    The practical realities of widespread tech adoption directly impact energy consumption.  For example, there are now over 7 billion people with smartphones.  As the population (and the number of gadgets and tech we use) grows, logically, so does our energy consumption.

    Luckily, we're also getting better at powering them. 

    On a different front, oil is still a meaningful and vital part of the energy ecosystem … but, now, it's being supplemented by multiple renewables. 

    Screen Shot 2022-08-18 at 12.41.59 PMView the full infographic at visualcapitalist 

    Over the last decade, investment in green technologies has helped the cost of renewable energies drop precipitously. 

    That spurred a different set of products and use cases.  For example, we've seen the number of electric cars grow exponentially.  In 2011, there were approximately 70,000 EV units in the world.  Now there are around 16.5 million

    This isn't a commentary on the environmental benefit of renewables; it is an observation about the direction energy is heading. 

    And, just like with AI, despite being a space that's existed for a long time, it is still in the "early adoption" phase. 

    Based on estimations, the IEA projects an 8x growth in EV by 2050.  This also means that we will use an increasing amount of batteries and rare metals.  Currently, China controls the supply chains and critical resource constraints

    If our goal is to be energy independent, we have a long way to go … Nonetheless, recognize that this creates massive business and investment opportunities. 

    Onwards!

  • Some Cool “Futuristic” Tech You Might Not Have Seen

    I joke that I have a "tense" problem. I spend a lot of my time thinking about what will be possible in the future. And once I know something is possible, in my head, it has already happened.

    It isn’t a reality distortion engine … it is a reality creation engine.

    For me, this is centered around the way technology is transforming the world and how it affects my business. 

    Sometimes it's nice to take a step back and look at all the "quality of life" improvements. The gadgets that make you say "Wow!" … even though they may not benefit you directly. 

    So, here are a few that caught my eye over the last few weeks. 

    Augmented Reality Running 

    In 2020, Ghost Pacer put together a pair of AR glasses that would give you a virtual running partner. The app would analyze the running route and the wearer's desired goals and set them up against a virtual runner who would push them to their limits. 

    Last year, SNAP and Nike teamed up to create a new AR running experience as well. 

     

    Spectacles via YouTube

    This is a great way to get moving for those (like my wife) who benefit from a structure around their exercise. 

    Magnetic Slime Robot for Healthcare

     

    New Scientist via YouTube

    Watching the video of this slime is somewhat uncanny. Its movements feel almost lifelike. That being said, the potential for this custard-like slime worm is massive. It can navigate narrow passageways, grasp objects, and more. There are already plans to use this to remove foreign objects from people.  

    Functioning Hoverboards 

     

    RIDE via YouTube

    Multiple generations of kids have dreamed of hoverboards after watching Back To The Future. While it's not in homes yet, it is now a reality as seen in this video with Tony Hawk riding one. Unfortunately, since breaking into the scene in 2015 with a successful Kickstarter, I have not seen much from Hendo Hoverboard

    Thankfully, they're not the only company in the space anymore. If you're willing to drop almost 15K, you can own a working hoverboard from Arcaboard

    I remember when we used to go outside to play or exercise.

    We live in interesting times!  

  • Where Are Children Being Born?

    Everyone knows that children are our future. They're the next generation of innovators, entrepreneurs, and workers. Countries that are having a natural decrease in population due to families not having children will likely find themselves becoming less important on the geopolitical stage.

    While the future is often hard to predict, here is easy “prediction” (that is much less of a prediction than it is simple math). In order to predict how many 18-year-olds there will be in a particular country in fifteen years, simply count the 3-year-olds there now.  Yes, there will be some death or migration … but it is an easy way to get a sense of some important mega-trends.

    With that said, the U.S. saw many states with more deaths than births in 2020 and 2021. 

    So, where are children being born?

    Where-Will-The-Next-1000-Babies-Come-From

    India, China, and Africa all are seeing massive population growth. America is still net positive. It's also worth noting that India and China are topping the list because they already have such large populations. Their birth rates are actually slightly below average. 

    On a longer term scale, it's also worth noting that population growth has been declining since the 1960s. Partly due to education, wealth, and the move from rural to urban living. 

    Slowing population growth means a larger portion of the population is older. As median age increases, there are lots of potential economic consequences.

    It's an interesting compounding of consequences. 

    We'll see if the countries with the largest population growth have the economy and infrastructure to support that growth. 

  • Oil Production By Country in 2021

    You could argue that we're in the middle of the first energy crisis of the 21st century.

    While gas prices are finally on the way back down, the recent surge is driving inflation and has consumers thinking much more about where their oil comes from. 

    When I last wrote about oil production, the shocking "secret" was that the largest importer of oil into the U.S. was Canada – and that most of our oil was produced within the U.S. 

    Largest-oil-producers-in-2021-by-countryvia visualcapitalist

    While the U.S. is the largest producer of Oil, OPEC is the largest organization. OPEC accounts for 35% of total production, with Saudi Arabia accounting for a third of OPEC's output. 

    Almost half of the world's oil production comes from The U.S., Saudi Arabia, and Russia. 

    Also, despite being the world's largest oil producer, the U.S. is still a net importer of oil. 

    Supply constraints on oil – as a result of sanctions on Russia – are creating a price increase with skyrocketing demand from mid-pandemic levels. Combine that with OPEC refusing to increase production to meet demand, and you have an energy shortage. 

    The U.S. has already started releasing barrels from its strategic reserves, and we've seen gas prices go down as a result, but it remains to be seen if our efforts will be enough to curb the shortage. 

    What else do you think we should be doing?

  • US Spending in 2021

    In a prior post, we looked at the Global GDP in 2021. Now, let's look at US Revenue vs. Expenditures in 2021. 

    Ezgif.com-gif-maker (9)

     

    So, from the start, we can see a 2,770-billion-dollar deficit last year. The #1 expenditure was income security. For those who don't know, income security is an extremely broad spending category. It covers everything from tax credits and unemployment to housing assistance, foster care, and many other welfare programs. It's somewhat of a catch-all for services that help people get necessities. 

    Surprisingly, the US pays more per person for healthcare than countries with nationalized healthcare. 

    Looking at 2021 isn't the best indicator of America's spending history as a whole; there were a lot of one-time events – and a pandemic. Usually, the deficit isn't that staggering. 

    Screen Shot 2022-08-05 at 5.10.06 PMvia Congressional Budget Office

    While the deficit may grow out of control, debt is a powerful tool – not just a liability.  Nonetheless, given our current economic situation, inflation, and rising interest rates, the strategy that got us here might not be the best strategy to get us where we want to go.

    What are your thoughts? 

  • Billion … With A B

    Humans are notoriously bad at large numbers. It's hard to wrap our minds around something of that scale. We're wired to think locally and linearly, not exponentially (it's one of the reasons I love AI so much).

    Here are a couple of ways to help you understand a billion dollars. 

    6a00e5502e47b288330240a4e81813200d-600wi

    via AskOpinion

    Next, let's look at spending over time. If you were to spend a dollar every second for an entire day, you would spend $86,400 per day. You can do that for approximately twelve days if you have a million dollars. With a billion dollars, you can do that for over 31 years. Ignoring the difference between net worth and cash, Jeff Bezos could spend $9M per day for over 31 years.

    If you make $100K a year, you can earn $1 million in 10 years. At the same rate, it would take you 10,000 years to make $1 billion.

    Here is an example framed around spending money.  Imagine that someone making $50K a year decides to buy a laptop, a car, and a house. Now we're going to make a relative comparison of the cost of those items for people making a lot more than $50K per year.  To do this, we'll shrink the cost of the price of those items (to see the relative cost-to-income ratio). For a millionaire, a laptop might cost the equivalent of $100 dollars, a Porsche would cost $3,000 dollars, and a house would cost $25,000. Now, let's say you're Mike Bloomberg, and you're worth $60B. A laptop's relative cost would be pennies, a Porsche's relative cost would be less than 60 cents, and a mansion's relative cost would be around $500 dollars. You could have everything you ever wanted for a minute fraction of your wealth. 

    For a different perspective, here's an interesting visualization from informationisbeautiful. It shows various examples of things worth billions of dollars – including the personal wealth of several billionaires. 

    IIB-Billions-2022-IIB-1276x825x2@2x-1via informationisbeautiful

    Okay, last one before I show a video … 

    Let's try explaining the concept of a Billion through time. Fifty thousand seconds is just under 14 hours. A million seconds was 11 days ago. A billion seconds ago from today? 1990. Pretty crazy. 

    Here's a video from the 1970s that helps you understand scale through the power of tens – and an exploration of our universe.

     

    Hope you enjoyed this.  Let me know what you think.