Capitalogix

Visualizing Global GDP in 2021

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.  

With that, take a look at the $94 trillion world economy, divided by region. 

 

via visualcapitalist 

Some thoughts: 

• 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. 

Crazy stuff.

How'd These 2021 Predictions Fair?

I write about the future of technology often. 

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!

Here was their "bingo card" for 2021.

via visualcapitalist

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?

Here Are Some Links For Your Weekly Reading - December 19th, 2021

 

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

Lighter Links:

• The Tech Revolution Has Reached Warp Speed: What Lies In Store For 2022. (VanityFair)
• NFL Postpones Three Games Due To COVID-19 Outbreak. (NBC Sports)
• The NFL Pivots To Less Covid Testing, Not More, To Thwart Disruptions. (WSJ)
• Seoul the First City to Enter the Metaverse. (ThisCityKnows)
• For the First Time In History, a Spacecraft Has 'Touched' the Sun. (ScienceAlert)

 

Trading Links:

• What Will Work Look Like In 2022? Glassdoor Makes Four Predictions. (Protocol)
• Is Bigger Better? Global Debt Reaches a Record $226 Trillion. (EurasiaReview)
• Core Inflation Shoots to Highest Level Since 1992.(Statista)
• The Regional Breakdown of Stock Market Sectors Over Time. (VisualCapitalist)
• Bruce Springsteen Sells Music Catalog to Sony for $500 Million. (The Wrap)

Greatest Strength or Greatest Weakness

I often talk about "unique abilities"... Those skills that define you and also bring you energy and joy. 

But, often, our greatest strengths also can be our greatest weaknesses (especially when you overuse them). I shot a brief video on the subject (under three minutes). Check it out. 

 

When we get good at something, it's easy to focus on that thing myopically. It makes sense. You develop a habit because you often get rewarded for doing it.  Consequently, it makes sense to focus on your strengths and leverage your unique abilities.

On the other hand, no technique works all the time.  Further, the "recipe" that got you here isn't necessarily the recipe for next.

With that said, you shouldn't neglect opportunities to find other ways to win or to seek improvement around you by intentionally growing the collection of unique abilities at your disposal.  One way to do that is to add 'Who's to your team whose unique abilities are the 'How's you need.   

Recognizing which new capabilities you need can be the job description for a person or the "spec and scope" of a technology solution.  In either case, it frees you to focus on setting your sights higher and doing more of what matters and adds the most value. 

It's That Time of Year ...

Gift-giving is certainly an art more than a science. 

As many of you start making your final purchases for the year, I thought you might enjoy these parodies from SNL. 

Considering buying her a car?

via SNL

What about some clothes for your children?

 

via SNL

And, while you're out doing all of your shopping, you might need a little pick-me-up. Why not some Dunkin?

 

via SNL

Hope you have a good week.

A-To-Z of The Internet Minute in 2021

As I get older, time seems to move faster ... but it's also true that as I get older, more is accomplished every minute. 

Technology is a powerful force function. In fact, the amount of data in the digital universe effectively doubles every two years. 

Every couple of years, I revisit a chart about how much data is generated every minute on the internet.  

In reverse chronological order, here's 2018, 2015, and 2011. 

Here's an excerpt from 2015 for some perspective: 

Compared to 2008 here is what's happened with social networks:

• The number of people online has more than doubled from 1.4 billion to over 3 billion (2021 #: 5.2 billion) 
• Facebook has gone from 80 million users to more than 1.4 billion (2021 #: 2.89 billion
• Twitter had 2 million accounts and now it is 300 million and counting. (2021 #: 206 million ACTIVE users after a big bot deletion)
• The number of smartphones was 250 million in 2008 and today there are more than 2 billion. That is an 800% increase! (2021 #: 6.37 billion)

Today this is what happens every minute on the web.

• 4 million search queries on Google
• Facebook users share 2.46 million pieces of content
• Email users send 204 million messages

Throughout its (pretty short) history, the internet has been arguably the most important battlefield for relevancy and innovation. 

So, what does the internet look like in 2021?

DOMO via visualcapitalist 

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? 

Here Are Some Links For Your Weekly Reading - December 5th, 2021

 

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

Lighter Links:

• Why Can't Baby Boomers and Millennials Just Get Along? (Freakonomics)
• Woman Reportedly Breastfed Cat On Delta Airlines Flight. (FoxBusiness)
• Hawaii Under Blizzard Warning as 12 Inches of Snow and Winds Up to 100 Mph Expected. (USAToday)
• Philip Morris Wants to Sell You Inhalers for Your Asthma. (Quartz)
• Which Fitness Tracker is Best For You? Comparing Apple Watch vs. Fitbit vs. Oura vs. Garmin vs. Whoop. (Wall Street Journal)

 

Trading Links:

• The Billionaire Boyz Club is Selling Record Numbers of Stocks Right Now. (InputMag)
• Microsoft Drops a Bombshell About Teams That Tanked Zoom. (SeekingAlpha)
• How Elon Musk Sold 10 Million Tesla Shares and Increased His Tesla Holdings. (CNN)
• Steve Cohen-Backed Start-Up Bets On 24-Hour Trading So Investors Can React Instantly to Tweets. (CNBC)
• US Treasury Secretary Yellen Says She's Undecided Whether the Fed Should Issue Digital Currency. (News)

Happy Hanukkah 2021

It's that Holiday time of year again. 

Wow, how time flies. We're past Thanksgiving, and Christmas and the New Year will be here quickly.

It turns out that tonight was and the last night of Chanukah - which is the Jewish festival of lights. This is the holiday that involves lighting the Menorah (Chanukah candles), eating latkes (potato pancakes), exchanging gifts, playing spin the Dreidel (a gambling game), and enjoying a sense of family togetherness for eight days and nights.

That's a long time, right?! Well, sometimes it seems even longer with my family. 

As a gift to all of you, here is "The Chanukah Song," performed by comedian Adam Sandler on Saturday Night Live.  It became an instant classic (and he since released a second, third, and fourth version.)

Here is the video. And, if you're feeling left out - here's Adam Sandler's Christmas Song.

 

via SNL

It's not too different from Christmas. 

The cynic in me believes the gift part of the holiday was invented by merchants.

Regardless, the Capitalogix team has been in a festive mood, and the office has been filled with holiday cheer. We recently celebrated a Thanksgiving Potluck as well. 

'

From my family to yours, Happy Holidays!

Fueling Alpha: Data In The New World

Data has long been a precious commodity - yet it’s only getting more valuable.

At the beginning of 2020, the number of bytes in the digital universe was already 40X greater than the number of stars in the observable universe. 

Data is today’s “wild west” and the battlefield of today’s tech titans; with AI, The IoT, the Blockchain, and analytics leading the forefront. 

Alphabet, Amazon, Apple, Facebook, and Microsoft all have an unprecedented amount of data (and power).

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.

 

via gapingvoid

Data as the New Oil

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. 

However, fundamental discretionary traders account for just 10% of today’s trading volume. Quantitative investing based on machine intelligence and algorithms is the new normal.

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? 

Food for thought!

Who's Tracking You? And How Often?

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. 

 

via pCloud

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.

 

via PCMag

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Be careful out there!