I'm grateful for the many groups I'm in, and smart people I know, because they're shortcuts to insights that can be hard to find.
One can also find inspiration through events, books, and more.
But, while it's easy to discredit mainstream news sources … there's plenty of insight to be gained just from keeping track of various news sources. You have to take them with a grain of salt, and find the articles that provide a different perspective too, but it's still a valuable exercise.
It's part of the reason I share my weekly links and this newsletter. They give me a reason to continue to do research and stay on my toes.
With that, here are some interesting articles I found recently on advancements in technology.
In VR, You Can Become Your Own Psychologist – There's a new VR psychology treatment where you play both patient and psychologist. It has promising results in leading to detachment from habitual ways of thinking about personal problems. This is on top of already interesting VR technology around meditation and psychedelics.
Synthetic tissue can repair hearts, muscles, and vocal cords – 3D-printed tissues have been growing in popularity recently. Also making progress is synthetic tissue made of a new biomaterial in the form of an injectable hydrogel. It's durable and porous, both important qualities in creating wound repair that can handle the movement and stress put on hearts and vocal cords.
AI Is Discovering Patterns In Pure Mathematics That Have Never Been Seen Before– Mathematicians using computers to discover patterns is not new, but now deep learning models are not only assisting in analysis but formulating conjectures and approaches for formerly unproven ideas. This is a promising indicator for many spaces including chemistry, metallurgy, and material sciences (on top of trading of course).
DARPA Funded Researchers Accidentally Create The World's First Warp Bubble – Warp drives have been part of science fiction for a long time – and science for a decent amount of time as well. Warp drives have been theoretically possible since 1994 but were deemed "impossible" due to their use of theoretical materials and massive amounts of energy. Now, there's tangible progress as a real (but very tiny) warp bubble was successfully modeled. This is very fledgling, but it's always exciting to see science fiction become reality.
Renewables 2021 by IEA – I remember when renewable energies were not only ineffective but very costly. Now, 95% of the new electricity capacity from 2021-2026 is expected to be from renewables. Now, IEA bases their estimates on historical data, so they over underestimate the adoption curves. I would take that number as conservative. Just remember that capacity is different than coverage. Several countries are making a lot of progress on renewables, and several are making none.
Have you found any other articles you found interesting?
There are numerous ways to look at or measure the global economy (including trade blocs, big industry movers, or debt). Another way to get a global overview is to compare GDP.
When trading was slower and more deeply tied to an investor mindset, economics played a more significant role in fundamental analysis. As the holding period (or "time in trade") shrinks, there is less focus on predicting markets over the long term … and more on determining which techniques are making money now.
Even though markets are not the same as the economy, on a macro scale, many believe that it is possible to create value by understanding and the global economy better.
Global GDP was $87 trillion in 2019 and $84 trillion in 2020. So, while COVID did negatively impact GDP initially, it has rebounded and risen again as if 2020 hadn't interrupted the trend.
Since 2018, China has been slowly gaining ground on the U.S.'s lead
Global GDP isn't zero-sum, so countries doing better doesn't necessarily mean other countries are doing worse
The top four countries – U.S., China, Japan, and Germany – make up over half of the world's GDP.
Based on GDP growth, Libya, Guyana, Macao, the Maldives, and Ireland have the world's fastest-growing economies.
To put these numbers in perspective, the world economy was approximately $3 trillion in 1970, and GDP is estimated to double again by 2050.
But, sometimes, it's fun to see what others have to say as well.
Every year Visual Capitalist puts together a list of their predictions for the coming year. As we reach the final two weeks of 2021, I figure it's worth taking a look!
Honestly, that was a pretty good set of predictions. While some of this list didn't pan out, much of it did. We're seeing a growing exodus from major cities (where people lived to pursue opportunities previously available only in such places), movies are recovering, and hybrid work models are all the rage.
Could they have predicted how much of an issue COVID would pose throughout the year? Probably not.
As we near the end of 2021, there's a lot of uncertainty in the air.
Global markets have the jitters – and we don't see the increased volatility changing anytime soon.
What's going to happen as a result of the continuing pandemic, inflation, interest rates, the ongoing supply chain issues, and the growing anxiety and unrest brewing underneath the surface of the new normal? In January, we'll get to see VC's predictions. Before that, what do you expect to happen in 2022?
Looking at the list, we see new editions like Clubhouse and Strava. Partially due to the quarantine, you're still seeing an increase in digital cash transfers with tools like Venmo, an increase in e-commerce shops like Shopify, and an increase in (you guessed it) collaboration tools like Zoom or Microsoft Teams.
Just to pick out some of the key figures in the chart this year.
Amazon users spend $283,000
6M people shop online
TikTok users watch 167M videos
and, Zoom hosts 856 minutes of webinars.
Before 2020, I already thought that big tech had a massive influence on our lives. Yet, somehow this past year has pushed their impact even higher.
One other thing this chart also helps put into perspective is the rapid rate of adoption. As you look at different year's charts, you can see how quickly apps have become part of the cultural zeitgeist.
How do you think these numbers will grow or change in 2022?
Rapid growth means little time to create adequate rules. Everyone’s jumping to own more data than the next and to protect their data from prying eyes.
The trading industry has undoubtedly experienced the rapid growth of data, but it’s pervasive in every industry – and in our personal lives as well.
Having basic data and basic analytics used to be enough, but the game is changing. Traders used to focus on price data, but now you’re seeing an influx of firms using alternative data sets to find an edge. If you’re using the same data sources as your competitors and competing on the same set of beliefs, it’s hard to find a sustainable advantage. Understanding the game they’re playing (and the strategies and rules they follow are important), but now that’s just the table stakes.
Figuring out where you can find extra insight, or make the invisible visible, creates a moat between you and your competition – and lets you play your own game.
I shot a video in 2019 about Data as fuel for your business. Check it out.
It is interesting to think about what’s driving the new world (of trading, technology, AI, etc.), and that often involves identifying what drove the old world. History has a way of repeating itself.
Before e-mails, fax machines were essential. Before cars, people were pleased with a horse and buggy.
These comparisons contextualize the importance of data in today’s new world of economics and commerce.
While not the best comparison, people often default to comparing data to oil.
Since the Industrial Revolution, petroleum has played a pivotal role in human advancement. It fueled (and still fuels) our creativity, technology advancements, and a variety of derivative products. There are direct competitors to fossil fuels that are gaining steam, but it’s more interesting to compare petroleum to data due to their parallels in effect on innovation.
The process of pumping crude oil out of the ground and transforming it into a finished product is far from simple, but anyone can understand the process at a high level. You have to locate a reservoir, drill, capture the resource, and then refine it for the desired product (e.g., heating oil, gasoline, asphalt, plastics, etc.). Then, you have to move it to where it’s needed.
The same is true for data.
You've got to figure out what data you might have, how it might be useful, you have to figure out how to refine it, clean it, fix it, curate it, transform it into something useful, and then how to deliver it to the people that need it in their business. And even if you've done this, you then have to make people aware that it's there, that it's changing, or how they might use it. For people who do it well, it's an incredible edge. – Howard Getson
Data can be seen as the fuel to the information economy and oil to the industrial economy. The amount of power someone has often correlates to their control of and access to resources … and diminishing or diluting those resources can lead to extreme consequences.
Why Data Is Better Than Oil
The analogy works, but it’s just that, an analogy. The more you analyze it, the more it falls apart. Unlike a finite resource (like oil), Data is all around us and increasing at an exponential rate. So the game is a little different:
Data is – ultimately – a renewable resource. It’s durable, it’s reusable, and it’s being produced faster than we can process it.
Because it’s not a scarce resource, there’s no urge to hoard it – you can use it, share it, transform it, infinitely knowing that it won’t diminish. Data is more valuable the more you use it.
As the world’s oil reserves dwindle (and renewable resources grow in popularity and effectiveness), the relative value of oil drops. It’s unlikely that will happen to Data.
Also, while data transport is essential, it’s not expensive in the same way that transporting oil is. In fact, it can be transported and replicated at light speed.
While petroleum can be transformed into many different products – the variety of data-related products and sources is basically infinite in comparison.
On Alternative Data
In the past, investors relied on information and experience from their real lives, from counterparties, and from fastidious attention to CNBC and stock tickers.
While the games, the rules, and the players have all changed, the goal hasn’t… more alpha … more money … more reliably.
Alternative data, to most, means tracking Twitter and Facebook sentiment, but confining your definition to that limits potential alpha.
New sources of data are being mined everywhere, and are letting investors understand trends “before they happen.”
For example, mobile devices, low-cost sensors, and a host of new technologies have led to an explosion of new potential data sources to use directly for predictive insight or indirectly to help improve models.
In addition, private company performance, logistics data, and satellite imagery are becoming popular data sets in a data scientist’s alpha creation toolbox.
There are often concerns about the cost and completeness of these datasets, but as we get better at creating and using them, both will improve.
It also doesn’t always have to be confidential or challenging to find information. Traders now have access to vast amounts of structured and unstructured data. An important source that many overlook is the data produced through their own process or the metadata from their own trades or transactions.
In the very near future, I expect these systems to be able to go out and search for different sources of information. It's almost like the algorithm becomes an omnivore. Instead of simply looking at market data or transactional data, or even metadata, it starts to look for connections or feedback loops that are profitable in sources of data that the human would never have thought of. – Howard Getson
In a word of caution, there are two common mistakes people make when making data-driven decisions. First, people often become slaves to the data, losing focus on the bigger picture. Second, even the most insightful data can’t predict black swans. It’s important to exercise caution.
The thing about “sustainable alpha” is that while one might be able to achieve it, you can’t expect to have it doing the same thing everyone else does (or by doing what you’ve always done).
Markets change, and what worked yesterday won’t necessarily work today or tomorrow. Trading is a zero-sum game, and as we move toward the future, this only gets more apparent.
The future of Data is bright, but it’s also littered with potential challenges. Privacy concerns and misuse of data have been hot button topics, as have fake news and the ability of systems to generate misleading data. In addition, as we gain access to more data, our ability to separate signal from noise becomes more important.
The question becomes, how do you capitalize on data, without becoming a victim to it?
I know I'm not the only one who feels like their phone is listening in to their conversations.
The ad suggestions are sometimes too on point – and even prophetic.
It can be a good thing – insofar as it gives you more personalized and relevant ads – but it can also be overly invasive.
With that, I have two charts for you today. One shows you how many cross-site trackers big companies are using to track you, and one shows you what sites allow the most cross-site trackers.
Unsurprisingly, Google and Facebook are doing most of the tracking. And the most popular tool they use is called DoubleClick. DoubleClick allows them to show you ads across multiple sites, and as often and for as long as they want.
For a different perspective about who's tracking you, here's a chart from PCMag and Surfshark showing which sites allow the most trackers.
For the past 80~ years, John D. Rockefeller was the undisputed richest person in history, but now Elon Musk is giving him a run for his money with a $340 billion net worth.
Many historians estimate Rockefellers' inflation-adjusted net worth to be around $340B, which would tie them.
While this is fun to look at, realistically, it's hard to get accurate numbers for many of these people. Think how much land Genghis Khan held or that Augustus Caeser essentially owned an entire empire. The calculations of their wealth are very subjective, and records from ancient eras are very scarce.
It is, however, surprising to see someone amass such personal wealth in an era with much more competition.
Do you think someone will surpass that wealth soon?
It is possible. How and why? Because we live in interesting times!
Freeing humans to do more has always been a boon to society. Electricity put a lot of people out of work … but, look what it made possible.
We'd be naive to think AI isn't going to influence the job market, but that doesn't mean you can't navigate that shift.
A Look At Industrial Revolutions
The Industrial Revolution has two phases: one material, the other social; one concerning the making of things, the other concerning the making of men. - Charles A. Beard
There are several turning points in our history where the world changed forever. Former paradigms and realities became relics of a bygone era.
Today, we're at another turning point.
Tomorrow's workforce will require different skills and face different challenges than we do today. You can consider this a Fourth Industrial Revolution. Compare today's changes to our previous industrial revolutions.
Third industrial revolution – The world wide web and computers connect the world together, heralding the digital age.
Each revolution shared multiple similarities. They were disruptive. They were centered on technological innovation. They created concatenating socio-cultural impact.
The fourth shares all the same hallmarks.
We're harnessing new technologies like AI, the IoT, renewable energy, and the blockchain. Automation will reach new levels in this revolution. But there also will be an explosion of new fields, new markets, and new necessary skillsets – it's going to impact the world as holistically as electricity did.
How will humans create value in an increasingly automated world?
I believe that, if managed well, the Fourth Industrial Revolution can bring a new cultural renaissance, which will make us feel part of something much larger than ourselves: a true global civilization. I believe the changes that will sweep through society can provide a more inclusive, sustainable and harmonious society. But it will not come easily. - Klaus Schwab
One of the distinctions I've recently made about the industrial revolutions is that for a long time, technology helped humans act like robots. Think about a plow and a farmer, or a seamstress and a sewing machine. After that, it helped robots try to act like humans, which you've seen more recently.
I believe we're at another inflection point, where new capabilities will free up humans to be more human and to pursue more of what they really want.
Robots can do many things, but they've yet to match the creativity and emotional insight of humanity. As automation spreads to more jobs, the need for management, creativity, and decision-making won't go anywhere … they may be bolstered by data analytics, but they won't disappear.
Our uniqueness and flexibility rightly protect our usefulness. AI and automation free us up to be our best selves and to explore new possibilities.
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