Capitalogix

Here Are Some Links For Your Weekly Reading - December 30th, 2018

Christmas Eve saw Dow's historic low ... but it was immediately followed with a 1086 point rally (its largest single-day gain). The S&P and Dow both rallied approximately 5%.

 

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

Lighter Links

• A Nobel Prize-winning Psychologist Says Most People Don't Really Want to Be Happy. (Quartz)
• There is No Such Thing as Conscious Thought. (Scientific American)
• Automated Cyber Attacks are the next Big Threat. Ever Hear of 'Review Bombing'? (Entrepreneur)
• NASA's Scientists Formed a Club to Dream up Uses for AI like Self-replicating Robots and Harpooning Comets. (Quartz)
• A Chinese Company Said It Created a Photo with Such a High Resolution that You Can Zoom from Thousands of Meters Away to See People's Facial Expressions. (BusinessInsider)

 

 

Trading Links

• Alan Greenspan: Investors Should Prepare for the Worst. (CNN)
• 5 Charts that Explain the Global Economy in 2018. (WEForum)
• The 7 Most Anticipated IPOs in 2019. (Fool)
• Wall Street Quietly Shelves Its Bitcoin Dreams. (Bloomberg)
• After a $2 Billion Company Bonus, Every Employee at Juul is Now a Millionaire. (RobbReport)

How Does America Use Its Land?

America is big and pretty heavily populated.  Surprisingly, 28% of the land is owned by the government (check out this YouTube video). 

As you might guess, the eastern US holds almost no federal land while the Western US has states that are primarily federal land (Nevada is 84.9% federal land). 

Bloomberg had an interesting series of infographics that covered America's land use and relative profitability.

To start, can you guess what takes up the most space ... 

 

Cows. 

 

Over 41% of the land in the contiguous US revolves around livestock and livestock feed. The farmland used to feed us is an afterthought in comparison - it makes sense when people talk about cows' environmental effect. 

Dave Merrill and Lauren Leatherby via Bloomberg

Urban areas make up only 3.6% of land use - but four out of five Americans live there (and this area accounts for about 40% of GDP). 

The map below gives us a rough idea of the split of U.S. land.  

Dave Merrill and Lauren Leatherby via Bloomberg

Urban growth is outpacing other categories, but we're also doing a good job of repairing forestland.  According to The Land Report magazine, the land owned by the top landowning families has grown to be larger than Florida - and is continuing to grow. 

There are a couple extrapolations that you can make from this information - but I'm curious  ... what do you take from this?

The Psychology Behind Gambling (and Everyday Traders)

Vegas and Wall Street share a lot in common. 

Over Time ... The House Wins

Casinos only offer to play games that they expect to win.  In contrast, gambling customers play even though they know the odds are against them.

Why does this happen?  The rush of a win, the chance of a big win, and random reinforcement are common factors that incent people to play lotto, go to a casino, or try to trade.

Chemicals like adrenaline and dopamine play a part as well.  Even in a sea of losses, your body can't help but crave the chemical reward of even a small win, 

The "House" knows this and engineers an experience that takes advantage of it.  

In the case of casinos, every detail is meticulously crafted to extract you from your money - from carpet patterns to the labyrinthian layouts, the music, the lights and even the games themselves. 

Here is an infographic that lays it out for you. 

Bojoko via DailyInfographic

Most people aren't gamblers ... the fear of losing big inhibits them.  However, when people were instructed to "think like a trader," they showed considerably less risk-aversion when gambling. 

 

The illusion of control convinces us we can overcome the statistics. 

 

When you almost get it right - when you miss the jackpot by one slot on a slot machine, when you just mistime a trade to get a big win - you're more likely to play longer, and place bigger bets ... because you're "so close". 

It's human nature to want to feel in control. 

This is why you find a lot of superstitious traders & gamblers. If you wear this lucky item of clothing ... if you throw the dice in this particular way ... if you check your holdings at this time every day ... you have control. 

There is a big difference between causation and correlation. 

It is not hard to imagine that the majority of a trader's activities do little to create a real and lasting edge.  

 

Skill vs. Luck

There are games of skill, and there are games of chance.

In a casino, poker and blackjack are considered games of skill.  In contrast, slot machines are considered a game of chance.

In trading, predicting markets is much different than using math and statistics to measure the performance of a technique.

Much of what we do is to figure out how to eliminate the fear, greed, and discretionary mistakes humans bring to trading.

In trading, "Alpha" is the measure of excess return attributed to manager skill, rather than luck or taking on more risk.

We believe in Alpha-by-Avoidance ... Meaning much of what we do is figure out what to ignore or avoid so that the majority of the games we play are games of skill rather than games of chance.

Are you playing the right game?

 

A Look Back At The Future, Part 2

As the holiday season begins, I was thinking about my father.

I love him and miss him ... but, truth be told, I teased him mercilessly about being technologically challenged (especially around the holidays, when I'd buy him a new gadget –  only to roll on the floor laughing while watching him try to figure it out).

Karma is a bitch!  My Dad used to say "whatever you make fun of me for ... will happen to you." 

I didn't yet realize how fast the world was changing ... or how quickly I'd find it hard to keep up. 

In 2015 I wrote an article about this titled "A Look Back at The Future". 

It's only four years later ... and somehow my realizations seem out-dated.

It's not just me, it's everyone! 

Realize that human perception is linear, but technological growth isn't.

As technology progression evolves and quickens, it is going to get harder to keep up.

Check out this video from 1974 ... It shows Arthur C. Clarke making some impressive guesses about the future of technology.

 

 

Now that we're here, it may not seem like an impressive prediction ... but how cool was it that Arthur C. Clarke believed a computer would fit on a desk in 1974?   

Do you think that you can predict what a computer will look like in 2034? 

Artificial Intelligence, quantum computing, augmented reality, neuro-interfaces, etc. are all going to change the face and nature of computing and perhaps life itself. 

We live in exciting times!

Onwards.

Here Are Some Links For Your Weekly Reading - December 2nd, 2018

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

Lighter Links 

• The 10 Best Books of 2018, According to Amazon.(BusinessInsider)
• Great Apes and Ravens Plan without Thinking. (Phys)
• Elon Musk: Ticket to Mars Will Cost about $200,000.(BigThink)
• Game of Thrones' Creator George R.R. Martin Assures Fans: Writing is Coming. (Wall Street Journal)
• Would a Universal Genetic Database Be a Crime-Solving Wonder, or an Orwellian Nightmare? (SingularityHub)

 

Trading Links

• Microsoft Passes Apple to Become Most Valuable U.S. Company. (MacRumors)
• 50 Companies to Watch in 2019. (Bloomberg)
• What Bear Markets Look Like. (AVC)
• International Stocks Will Beat US Stocks over next Decade: Vanguard Group. (CNBC)
• The World's 37 Richest, Healthiest, Happiest, and Most Prosperous Nations. (BusinessInsider)

 

 

A Little Hanukkah Fun

Tonight marks the first night of Chanukah - the Jewish festival of lights. 

We light the Menorah (Chanukah candles), eat latkas (potato pancakes), we exchange gifts, we spin the Dreidel (a gambling toy), and we enjoy a sense of family togetherness for 8 days and nights.

One of my friends sent me this funny video of a Chanukah parody of Bohemian Rhapsody ... it's better than you would expect.

 

 Six13Sings via YouTube

It's not too different from Christmas (though my kids were jealous Santa didn't come down our chimney). 

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

In our office,  we have an "Elf on the shelf", the magical elf who reports who has been naughty and who has been nice to Santa, perching in a new spot each day. 

 

 

And, we also have "Mensch on a Bench", who watches your Menorah to make sure you don't run out of oil. 

 

 

Happy Chanukah ... or at least an early start to your holiday season!

Tackled on Thanksgiving

Happy Thanksgiving!

My children came to town, and we continued our tradition of spending time together watching some football. The top photo is from 2008. 

 

After looking at this picture, I recognize the burden I impose on my sons.  Some would call it crushing. 

 

 

That's my oldest son, Ben. He's a good sport.

My youngest son, Zach, was happy to make sure that I got mine too. 

 

 

He still plays Rugby. 

I am thankful for my family, my company and that I continually face a better class of challenges ... forging a path to a bigger future.

What about you?

Here Are Some Links For Your Weekly Reading - November 25th, 2018

 I remember when they told me that eating meat was bad for my health ...

 

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

Lighter Links  

• Is It Possible to Replay the Tape' of Evolution? (Futurity)
• Should You Be Eating a High-Fat, Low-Carb Diet like Keto? Scientists Weigh In. (Gizmodo)
• An 1861 Japanese Book of American History. (Neatorama)
• Beijing to Judge Every Resident Based on Behavior by End of 2020.(Bloomberg)
• How Many Fake Accounts are There on Facebook? Here's a Clue: 1.5 Billion Fake Accounts Were Removed in Just the past 6 Months. (Neatorama)

 

Trading Links

• Mark Cuban Explains Why Dallas Wasn't Selected as Amazon's HQ2 Location. (SportsDay)
• Jerry Jones: Wouldn't Sell Cowboys for Less Than $10 Billion.(Profootballtalk)
• Beyond Meat Continues to Sizzle, Announces IPO. (Forbes)
• Masayoshi Son: the Man behind a $90B Empire. (TechInAsia)
• How Juul, Founded on a Life-Saving Mission, Earned a $16B Valuation Despite the Controversy. (FastCompany)

Storage Wars

Have you ever seen the posts showing what happens in a minute on the Internet?  The speed and scope of activity is amazing ...  so is how fast it is increasing.

The same is true for storage.  It is getting bigger and cheaper quickly.

This picture shows an IBM VP holding a 10 MB hard drive from the 1960s.   

via novartistic

When it was invented, I bet they wondered how someone could ever fill it.  Now imagine what it cost back then.

For context, here are some things you can do with 10 MB of space:

• Download approximately 3 songs
• or 5 medium-sized photos
• or store 50-100 HTML e-mails
• or a 3 minute low-quality video (or 48 frames of 4k footage).

Things are changing.

Here's a link to a 256 GB flash drive that you can buy for about $50 dollars ... and here's a link to a working prototype of a 1 TB flash drive.

Here are some things you can do with 1 TB of space:

• Store 17,000 hours of music
• or an 85,899,345 page word document. (source)
• or 250 full-length movies
• or 310,000 photos.

I wonder how someone could ever fill it?

Crazy!

Here Are Some Links For Your Weekly Reading - November 18th, 2018

This is how we warm-up for Thanksgiving in Texas ...

 

 

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

Lighter Links  

• Is this AI? We Drew You a Flowchart to Work It Out. (TechReview)
• In Defense of "Designer Babies". (Reason)
• China's Artificial Sun is Now Hot Enough for Nuclear Fusion. (Futurism)
• Science Confirms: Earth Has More Than One 'Moon'.(BigThink)
• Sign Your Address up for USPS Informed Delivery Before Scammers Do. (LifeHacker)

Trading Links

• Billionaire Ray Dalio Says Capitalism is Not Working for Most People. (Barrons)
• Bank of Japan's Balance Sheet Now Larger Than Country's GDP. (Reuters)
• Meat Has a Replacement but No One Knows What to Call It. (Bloomberg)
• Here are the Most Outrageous Incentives Cities Offered Amazon in Their HQ2 Bids. (Buzzfeednews)
• A Virtual Assistant Called Abbie is Picking the Best Bonds for Traders to Buy or Sell. (TechReview)