Market Commentary

  • Gartner’s 2018 Hype Cycle for Emerging Technologies

    With all the "fake news" and manufactured social buzz, it's hard to identify what technologies are reaching maturity and which ones are fads. Gartner's Hype Cycle attempts to solve that problem. 

    What's a "Hype Cycle"?

    As technology advances, it is human nature to get excited about the possibilities and to get disappointed when those expectations aren't met. 

    At its core, the Hype Cycle tells us where in the product's timeline we are, and how long it will take the technology to hit maturity. It tells us which will survive the hype have the potential to become a part of our daily life. 

    Gartner's Hype Cycle Report is a considered analysis of market excitement, maturity, and the benefit of various technologies.  It aggregates data and distills more than 2,000 technologies into a succinct, contextually understandable, snapshot of where various emerging technologies sit on the hype cycle.

    Here are the five regions of Gartner's Hype Cycle framework:

    1. Innovation Trigger (potential technology breakthrough kicks off),
    2. Peak of Inflated Expectations (Success stories through early publicity),
    3. Trough of Disillusionment (waning interest),
    4. Slope of Enlightenment (2nd & 3rd generation products appear), and
    5. Plateau of Productivity (Mainstream adoption starts). 

     

    Understanding this hype cycle framework enables you to ask important questions like "How will these technologies impact my business?" and  "Which technologies can I trust to stay relevant in 5 years?"

    What's exciting this year? 

    Currently, people are probably "too" excited about IoT platforms, Deep Learning, and Virtual Assistants. The idea isn't they won't stand the test of the time, but there's an artificial influx of people inflating the adoption numbers. Once the chaff is separated from the wheat – you can expect these to succeed. Autonomous driving, connected homes, and mixed reality have matured past the hype phase. 

    For comparison, here's my article from last year, and here's my article from 2015. Click the chart below to see a larger version of this year's Hype Cycle.

    PR_490866_5_Trends_in_the_Emerging_Tech_Hype_Cycle_2018_Hype_Cycle via Gartner

    This year, Gartner organized the 17 highlighted technologies into 5 encompassing trends:

     

    • Democratized AI (autonomous driving, conversational AI, deep neural nets, etc.) is one of the most disruptive classes of technology. It's becoming more readily available due to open source and cloud computing. There's a burgeoning field of "makers" inspired to push the boundaries of what's possible.  
    • Digitalized Ecosystems ( blockchain, IoT) support emerging technologies by being the foundations for dynamic systems. There's a shift from discrete infrastructure systems to comprehensive ecosystems. Think of blockchains potential impact on tracking and communication.  
    • Do-It-Yourself Biohacking (biotech, biochips, exoskeletons, AR) is something I've talked about before. Dave Asprey is a public face of this movement and we shot a video together last year. The future is bringing implants to extend humans past their perceived limits and increase our understanding of our bodies; biochips with the potential to detect diseases, synthetic muscles, and neural implants. 
    • Transparently Immersive Experiences (connected home, smart dust, volumetric displays) represent the blending of where human stops, work starts, and things exist. Imagine a theoretical smart workspace where electronic whiteboards capture all your notes and disseminate them, sensors let you know where people are and what they're working on, and everything in your office interacts directly with your IT platform. This creates much more contextual and personalized experiences.  
    • Ubiquitous Infrastructure (5G, carbon nanotubes, quantum computing) means that infrastructure is becoming a less competitive advantage. As infrastructure becomes cheaper, more ubiquitous, and faster, it becomes background noise.  

     

    Looking at the overarching trends of this year, it's also fun to look at what technologies are just starting their hype cycle. 

    • Artificial Tissue (Biotech) could be used to repair or replace portions of, or whole, tissues (cartilage, skin, muscle, etc.)
    • Flying Autonomous Vehicles can be used as taxis, but also as transports for other things such as medical supplies, food delivery, etc. Amazon and Uber are likely excited about this development – and expect it in the next couple of years. 
    • Smart Dust opens up the possibility of monitoring essentially everything by creating a vast network of minuscule sensors that can detect various inputs. 
    • Artificial General Intelligence
    • 4D Printing would theoretically allow us to print objects that reshape or self-assemble over time. 

     

    Which technologies do you think will survive the hype?

  • Social Media Is Changing Everything: A Reprisal

    I came across a post from 2009 about social media. 10 years later, with the knowledge of how much data we use today, it's quite a read.

    Here it is in its full glory. 

    Social Media Is Changing Everything: October 18th, 2009

    My son won't use e-mail the way I did. So how will people communicate and collaborate in the next wave of communications?

    Here is a peek into the difference that is taking hold.  I was looking at recent phone use.  The numbers you are about to see are from the first 20 days of our current billing cycle.

      • My wife, Jennifer, has used 21 text messages and 38 MB of data.
      • I have used 120 text messages and 29 MB of data.
      • My son, at college, used 420 text messages, and is on a WiFi campus so doesn't use 3G data.
      • My son, in high school, used 5,798 text messages and 472 MB of data.

    How can that be?  That level of emotional sluttiness makes porn seem downright wholesome. 

    But, of course, that isn't how he sees it.  He is holding many conversations at once.  Some are social; some are about the logistics of who, what, when, where and why … some are even about homework.  Yet, most don't use full sentences, let alone paragraphs.  There is near instant gratification.  And, the next generation of business people will consider this normal.

    Is social media a fad? Or is it the biggest shift since the Industrial Revolution?

    Welcome to the World of Socialnomics.  This video has a bunch of interesting statistics … and is fun to watch. 

     

     

    Other Resources:

    Social Media Is Changing Everything: April 20th, 2019 

    Looking at the stats from 2009 is pretty funny

    • My son was using 472 MB of data a month
    • Hulu had grown from to 373 million total streams in April 2009
    • Only 25% of Americans in the past month said they watched a short video on their phone

    For some context, I looked up the comparative numbers for 2018. 

    • I picked a random month in 2018 … in August my son used 10.85 GB of data. He doesn't text as often – but has sent/received 282,000 snapchats since downloading it 5 years ago.
    • Hulu has over 20 million subscribers who streamed more than 26 million hours a day in 2018 
    • People spend over five hours a day on their smartphones on average. 70% of web traffic happens on a mobile device, and more than 50% of videos are watched on mobile (93% of twitter videos). 

    Here's what happens every minute of every day on the internet

    D0-86c4XcAMTmla

    via Lori Lewis and Chadd Callahan

     

    A little different than 2009 …

  • Reinventing Hedge Funds

    Two months ago, I spoke at IBM's Think 2019 Conference with iOLAP's Chris Jordan. Our talk was Gaining a Financial Edge through Fast Data and Analytics.

     

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    The crux of our presentation was that high-performance computing and advanced technology stacks are fundamental to today's trading strategies.

    Earlier this week, IBM released a commercial we shot together about how IBM's Integrated Analytics System (IAS) is helping us re-invent hedge funds.  Check it out.

     

     

    via IBM Analytics

    Think of it this way: 

    Evolution of TradingEach generation of traders finds new ways to play the game and to generate Alpha (the excess return generated by manager skill, rather than luck or excess risk). As soon as enough people adopt a strategy (or figure out a way to combat it), the edge begins to decay.

    When computerized data became available, simply understanding how to download and use it generated Alpha. The same could be said for each later evolution: the adoption of complex algorithms, access to massive amounts of clean data, and the adoption of AI strategies.

    Each time a new shift happens, traders pivot or fail – it's not that active trading stopped working – it's that the tools and styles necessary to play that game evolved.

    We use a similar concept we call "Active Switching".  Instead of simply trying to pick stocks or markets, we use advanced technology and techniques to choose markets, techniques, risk levels, and allocation strategies. Further, we use Active Switching to make many decisions, great and small, that together allow us to build portfolios that adjust themselves to changing market conditions.

     

    Playing a New Game

     

    Confusion is the catalyst to most trades.  What that means is the ability to parse information … to create a contextual map of meaning and figure out where there's signal and noise … is the new table stakes for playing that game.   ~ Howard Getson

     

    Historically, most active traders don't beat the S&P in any given year … and even less beat it with any semblance of consistency.  But those that do – the ones that have been doing it for long enough that it's not chance … exercise a willingness (and a skill) to adapt quickly. 

    One of Charles Darwin's best-known concepts is: It is not the strongest species that survive, nor the most intelligent, but the ones most responsive to change.

    While computers have made information accessible to everyone, they've also created a massive asymmetric information advantage for those who have both the access and the skill to best use the massive amounts of data now available.  This is more complicated than it seems.  You need the information, the technology, the process, and the people.  There is so much data available now that figuring out what to ignore is probably more important than what to use.  Likewise, the ability to ingest, clean, validate and curate the data is a huge hurdle that most can't clear.

     

    FInding A Needle In A Haystack_PPT Size

     

    Even with those skills, it's harder than ever to take advantage of inefficiencies (edges) than ever before.  The edges are smaller, more fleeting, and surrounded by more volatility and noise.  It's like finding a needle in a haystack.  That being said – finding a needle in a haystack is easy when you have a metal detector. 

    That's where A.I. has come in for us. We use A.I. to develop algorithms, to analyze markets, and to create meaning where humans can't find any. 

     

    Wisdom Comes From Making Finer Distinctions_PPT Size

     

    We live in exciting times.  Onwards!

  • Here Are Some Links For Your Weekly Reading – April 21st, 2019

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

    Lighter Links:

    Trading Links:

     

  • Don’t Miss The Forest For The Trees: Change Blindness

    There are few certainties in life … according to Benjamin Franklin:

    "Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes."

    According to the ancient Greek philosopher Heraclitus: 

    "Change is the only constant in life" 

    He's also quoted as saying "everything changes and nothing stands still."

    Maybe he didn't pay his taxes. 

    Change is a constant, yet, it's often hard to see the forest for the trees. 

    It seems like just yesterday that my son, Zach, was making sand castles on the beach – or wearing silly t-shirts. Now, he's 26, the soft spot on his head has filled in enough to consider him an adult – and he is generally unrecognizable from that kid on the beach at the Jersey Shore. 

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    On a day-by-day basis, I rarely noticed the change. However, looking at old pictures makes it obvious that there was massive growth and progress. 

    So, what did I notice?  Sometimes it was what a great kid, or how loving, he had been.  Other times, it was almost the opposite.  Or, perhaps, I noticed that he didn't eat vegetables, or that he drove with a heavy foot.  In any case, what I focused on is what my life seemed filled with, to me. And it was mostly about the moment.  The bigger picture was lost (or hidden) behind the small things that make up the fabric of our life (or at least our perception of our life).

    It is human nature.  Survival of the fittest rewarded a focus on avoiding predators or other dangers … as well as recognizing the opportunity to eat. 

    Thousands of years later, fear and greed still drive more than we like to admit.  It is also a big part of the engine that drives our markets. 

    It is all about perspective, isn't it? 

    We are where we are. It doesn't really matter how or why we got there. We are here. And little-by-little we won't be here anymore.

    If you are looking at the country or the economy, realize that it took years to get here. Simply changing a regime won't flip a switch.  Some changes happen in slow-motion. 

    Or, perhaps from our perspective, some changes appear to happen in slow-motion … but what others see as change, you see as symptoms of the root cause. 

    From different vantage points, the rate of change can seem different.

     

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    The same can be said for changes in a person or changes in a business. It's easy to see the gap between where you are and where you'd like to be. Regardless, you will probably get there faster by building momentum and confidence by focusing on the improvements and progress you're making. If you change your perspective – you may realize you've made more progress than you thought. 

    Tough times are great opportunities to discover character.  I'm often amazed at the innovation and insight that occurs at times like these!

    Don't pay so much attention to what you think you have to do that you forget the reason you're doing it in the first place. 

  • Robocalls and Taxes: These Are A Few Of My Favorite Things

    What're everyone's two favorite things? Paying taxes and receiving robocalls, obviously. 

    Phone scammers used to just target the elderly or those with poor English skills, but today, they go after everyone. In fact, Americans received over 30 billion robocalls last year … and it's only getting worse. Around half of those are "legal," but more and more are scams.

    Those scams increase during tax season. 

    Several of my friends have received calls from the "IRS" demanding immediate payment. That is a scam. The IRS has stated repeatedly, they will not call you asking for your credit card numbers over the phone, they will not threaten lawsuits, and they will not call you unless they've already tried reaching you by mail. 

    According to the FTC, robocall complaints in March and April are 20% higher. They're the icing on the tax season cake. 

     

    Screen Shot 2019-04-05 at 9.24.44 AMvia allareacodes

     

    If increased robocalls weren't enough, you can expect your refund to be 8% lower than last year. Though the average refund is still several thousand dollars, and my home state of Texas can expect the highest returns. 

     

    Tax-refund-by-state-(1)-1eb6

    via HowMuch

    Texas tops the list (Everything IS bigger in Texas) with $3,206 as the average tax refund. Maine inhabitants bottom out the list with $2,336.

    It's worth mentioning that these refunds represent federal figures, and don't take into account any refunds from your state government – meaning there's likely more money flowing back to taxpayers than this map illustrates. 

    What many people don’t understand is that the size of your tax refund isn’t solely based on tax cuts or raises.

    Getting a refund feels like a win, but it represents an interest-free loan to the government for the last year. In an ideal world, you'd have a refund of $0 – meaning you paid exactly what you were supposed to.

    Don't forget to file your taxes (Monday, April 15th is the deadline to file without an extension) and if you want to protect yourself from robocallers, here are some tips: 

    • Don't answer calls from unknown phone numbers – let them go to voicemail and call back if necessary
    • If you do accidentally answer a spam call, don't press any buttons or speak, as that simply alerts them that they've reached a working phone number
    • Don't call a scammer back, and don't engage with them … it's like talking with cops, Anything you say can and will be used against you 
    • To decrease legal calls sign up for the federal and state do not call lists
    • Check out CTIA's tip sheet on How to Stop Robocalls to see a list of apps available to prevent robocalls on your mobile OS

  • Here Are Some Links For Your Weekly Reading – April 7th, 2019

    The IRS

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

    Lighter Links:

    Trading Links:

     
     

  • Here Are Some Links For Your Weekly Reading – March 31st, 2019

    13chappatte-articleLarge

     

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

    Lighter Links:

     

    Trading Links:

  • Billions (with a B)

    Kylie Jenner was recently named the world's youngest "self-made" billionaire by Forbes. 

    There was a lot of controversy over the title "self'-made" … Regardless, her accomplishments are impressive. Jenner is an example of a different form of intelligence and hard work (and the power of the Kardashian media empire).

    Clearly, Americans are fascinated with the idea of billionaires as an extension of the American dream.

    Here's the world's "official" richest people. 

     

    Screen Shot 2019-03-20 at 11.06.31 AMvia Forbes

    The actual data is interesting. The US has about doubled in Billionaires since 200.  Meanwhile, China has grown from 1 Forbes list billionaire to over 300. In that same time, the US GDP grew from approximately 10.5 trillion  USD to 21.5 trillion, and China's GDP went from about 1.3 trillion USD to over 13 trillion. 

    Global GDP has increased by 2.5x since 2001.  Consequently, most people in the world are richer than they were back then. 

    How many billionaires are there … and how many in America? Forbes has an interactive chart to answer those and many more questions.,  Click the chart below to see the data. 

     

    Screen Shot 2019-03-20 at 11.04.23 AM

    via Forbes

    The issue with this chart – and any chart on this subject -  is that the data is incomplete and suspect for a variety of reasons.  For example, think about the assumptions made on the amount of money tied up in a variety of assets like private companies, art, and real estate. 

    In addition, there are many billionaires who don't want to be tracked. For example, the list only shows  Saudi Arabia having 20 billionaires.  Likewise, it is estimated that India has over $500 billion in undocumented wealth (with some estimates putting it as high as  $1.5 trillion.)

    Not a bad list to be on!

  • Here Are Some Links For Your Weekly Reading – March 24th, 2019

    Cartoon-ai-march-madnessvia KDNuggets

     

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

    Lighter Links:

     

    Trading Links: