Capitalogix

Here Are Some Links For Your Weekly Reading - October 6th, 2024

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

Lighter Links:

• How to Use ChatGPT to Brainstorm Anything. (Geeky-Gadgets)
• Why We Love Moo Deng — The Science Behind Our Obsession With Baby Animals. (Forbes)
• Try Perplexity for Search🔥. (WonderTools)
• These US Cities Hit 110 Degrees in October – Get Used to It. (Vox)
• Israel's Paradox of Defeat – How the Country's Military Success Is Producing Political Failure. (ForeignAffairs)

 

Trading Links:

• Why OpenAI Burns Through Billions. (Axios)
• AI Training Data Dilemma: Legal Experts Argue for 'Fair Use'. (Forbes)
• Amazon's New AI Chatbot Could Change How Employees Work Forever. (GreyJournal)
• America's One-Two Punch of Good Economic News. (Axios)
• Mark Cuban Warns the U.S. Must Win the AI Race ‘Or We Lose Everything’. (Fortune)

 

Imaginary Centenarians: An Ig Nobel Pursuit

The 34th Annual Ig Nobel Prize ceremony took place last Thursday at MIT. Every year since 1991, around the time the recipients of the genuine Novel Prizes are announced,  the Ig Nobel Prize awards the ten achievements that "first make people laugh, and then make them think. They're meant to celebrate the imaginative and encourage more interest in the sciences. 

The first award for Biology was awarded to Robert Klark Graham, for pioneering development of the Repository for Germinal Choice, a sperm bank that accepted donations only from Nobellians and Olympians. While I jokingly tell my kids they have "superior genetic potential," this type of research and belief can have serious consequences. 

In 1996, Physicist Robert Matthews earned a prize for his paper "Tumbling Toast, Murphy's Law and the Fundamental Constants," which sought to explain why toast tends to fall buttered-side down.

  

 

In 2002, another physicist, Arnd Leike, earned the honor after using the law of exponential decay to explain the behavior of beer foam. 

And in 2017, Marc-Antoine Fardin earned the honor for using fluid dynamics to finally answer the eternal question: "Can a cat be both a solid and a liquid?" In case you are squeamish, no blender was involved in that experiment.

While these are funny examples, they're rooted in real science. As is the focus of this article, this year's Ig Nobel Prize for Demography. 

In my circles, it is becoming more common to discuss how to live past 100 — and not just how to live beyond that number ... but to do so with a high quality of life.

A popular concept around that subject is Blue Zones - areas where people seem to live longer and healthier. There's even a Netflix documentary on the subject. Notable places include Sardinia, Italy; Okinawa, Japan; and Ikaria, Greece. 

Saul Justin Newman challenged that belief with his research, which found that extreme age records tend to come from areas with no birth certificates, rampant clerical errors, pension fraud ... and even short life spans. 

While longevity in the zones has primarily been attributed to diet, community, and genetics, Newman found that many of these claims were based on errors - or outright fraud. Instead, these regions are actually characterized by the opposite of what you would expect ... low incomes, low literacy, high crime, and short lifespans. 

To a certain extent, it makes sense. In areas where you're struggling to make ends meet ... why wouldn't you commit pension fraud? In fact, in 2010, the Japanese government realized that over 80% of the people aged over 100 were actually dead. Part of what made this possible was that America bombed the halls of records in that area during the war. 

Here's an interview with Saul Justin Newman on the subject. He's tracked over 80% of the people aged over 110 worldwide. Almost none of them have a birth certificate. Only about 10% have a death certificate. 

What does this mean for human longevity?

While the stories of these 110-year-olds may mostly be fake - as mentioned in my recent article - longevity is on the rise, and there are many modalities to increase your lifespan. 

 

 

The goal isn't just to stay alive longer; it's to live life to its fullest for as long as possible.

There are people living to 100, and there are plenty of people living healthily into their 70s, 80s, and 90s. 

We're taking steps in the right direction. Technology and medicine are both evolving quickly. 

But, like with longevity data, improvements in any space need to be met with a grain of salt. 

If it sounds too good to be true ... it generally is. Not always. But, generally. 

Here Are Some Links For Your Weekly Reading - September 22nd, 2024

 

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

Lighter Links:

• Ex-Pentagon Official Discusses Government's Hunt for UFOs: 'I Have to Be Careful What I Say'. (People)
• The Russian Bot Army that Conquered Online Poker. (LongReads)
• The Mr. Beast Memo is a Guide to the Gen Z Workforce. (Kyla)
• The 7 ‘House Rules’ of Marriage—By a Psychologist. (Forbes)
• Scientists May Soon Be Able to Translate the Languages Plants Use to Communicate. (BGR)

 

Trading Links:

• How Intel Fell From Global Chip Champion to Takeover Target. (Wall Street Journal)
• The Top 100 Gen AI Consumer Apps. (A16Z)
• Breaking Down OnlyFans’ Stunning Economics. (MatthewBall)
• How the Super-Rich Signal Their Wealth to Each Other. (WSJ)
• Peter Thiel Predicts the 2024 Election Won't Be Close: 'One Side is Simply Going to Collapse'. (Insider)

 

The Secret To Competing Against Tech Giants

The last time I drove in New York City traffic, I complained that "I didn’t understand why people came here" because it was too crowded.

That reminds me of one of Yogi Berra’s famous quotes. “Nobody goes there anymore because it’s too crowded.”

He said that about a famous restaurant where he used to work.

The same is true in business. Opportunity draws a crowd ... but the best opportunities are often in areas of less competition.

For entrepreneurs, oversaturation can turn products into commodities, reducing profit potential. Conversely, many shy away when a challenge seems insurmountable, creating unexpected opportunities for those willing to take the risk.

As an entrepreneur, I’m drawn to projects others might dismiss as science fiction. These are the challenges that often lead to the most groundbreaking and rewarding outcomes.

Moonshot Projects

Moonshot projects offer a unique advantage. While they may seem daunting, their audacious nature often means less competition and greater potential for transformative impact and extraordinary profits.

A moonshot project is a highly ambitious, transformative endeavor that seeks to solve a significant problem or create a revolutionary innovation. These projects are characterized by:

• Audacious Goals: They aim for breakthroughs that seem nearly impossible to achieve.
• Disruptive Impact: They strive to create solutions that are vastly superior to existing offerings, often by introducing entirely new paradigms.
• High-Risk, High-Reward: These projects embrace the potential for failure in pursuit of groundbreaking results.
• Long-Term Focus: They prioritize long-term impact over short-term gains.
• Technological Advancements: They leverage cutting-edge or even nascent technologies.
• Paradigm Shifts: They challenge conventional wisdom and industry norms.

Moonshot projects are inherently challenging. They demand significant resources, interdisciplinary collaboration, and a willingness to venture into the unknown. This perceived difficulty often deters potential competitors, creating a unique opportunity for those willing to take the risk.

When successful, they push the boundaries of what is possible and redefine the landscape of their respective fields.

In part, that is why a 10X mindset is particularly well-suited for Moonshot projects. By aiming for a tenfold improvement over existing solutions, you’re essentially operating in a space with little to no competition or opposition. This allows you to redefine the rules of the game and establish a sustainable competitive advantage.

Our strategy of creating a unique, sustainable competitive advantage aligns perfectly with the Moonshot approach. By choosing to play a different game (with an asymmetric edge), we’re not just competing; we’re fundamentally changing the playing field.

I’m not interested in going head-to-head with tech giants on their turf. Instead, the goal is to carve out our own niche, focused on using our unique abilities to push boundaries and extend our edge. Being slightly ahead of the competition can be a powerful attractor. It often leads potential competitors to seek collaboration rather than confrontation. They might approach you with ideas, money, or opportunities, aspiring to share in your advanced position and capabilities. This dynamic can create unexpected partnerships and accelerate progress in ways that benefit everyone involved.

When interviewing potential team members, I often share a crucial insight: if you’re seeking a job where you work 9-to-5 solving problems so you can go home feeling satisfied, this might not be the right fit.

We tackle challenges of a different magnitude. Our projects rarely have quick solutions. Instead, we focus on making steady progress towards ambitious goals.

I sometimes joke that our motto should be: “We suck less.” Nevertheless, the underlying truth is more profound. It’s about understanding your ultimate objective and recognizing that each step moves you in the right direction, no matter how small.

This approach aligns with our belief in playing a different game. We don’t just compete; we redefine the rules of engagement, creating our own metrics for success and pushing boundaries in ways that traditional thinking often overlooks. Kind of like this quote:

“I have not failed. I've just found 10,000 ways that won't work.” - Thomas Edison

It doesn’t make sense to challenge a bigger and better-funded competitor in an area where they have an asymmetric advantage. In other words, don’t compete with giants at their own game.

Choose to play a game you expect to win.

Playing a different game is a theme at Capitalogix. We believe that you control the game you’re playing, the rules, how you keep score, and even how you evaluate success. These things inform where to spend time, where to invest money, and even what looks like an opportunity to you. 

Wouldn’t you rather compete in areas where you can create a unique, sustainable competitive advantage? Personally, I want to invest in the things that extend the edges that let us win.

Why? Because ... Mediocrity Is Expensive!

What you lack in size or computer power, you can make up for in creativity, agility, and innovation. 

We sought to create a niche in the investment industry, not through computing power, but through unique approaches to age-old problems. We use AI and data science to enhance decision-making. 

We have an incredibly narrow and consistent focus. Within that area, we are willing to take on problems others avoid and pursue goals that others say are impossible. 

Our niche limits risk and lets us fail faster ... and learn faster. This allows us to take confident action while others are tentative. 

Most big companies - and most of our competitors - are afraid to be wrong. They have to protect their infrastructure, cash cows, and short-term performance metrics. It makes sense (from their perspective) that playing it safe means they’re secure. - but that’s not how it works. 

You can’t challenge the status quo when you are the status quo. 

10x Improvement Is Often Easier To Achieve Than 10%

 

Astro Teller via TED

"In 1962 at Rice University, JFK told the country about a dream he had, a dream to put a person on the moon by the end of the decade.The eponymous moonshot. No one knew if it was possible to do, but he made sure a plan was put in place to do it if it was possible.That's how great dreams are. Great dreams aren't just visions, they're visions coupled to strategies for making them real." - Astro Teller

Incremental change is hard - it’s finding new ways to do the same thing, and you often end up competing in very red oceans - saturated markets where you’re competing on price.

Moonshots sound harder, but you create your own niche, and the constraints of a new idea force creativity and energy. If you’re going after a goal that no one has accomplished before, it’s impossible to be in a red ocean, and it’s easier to mobilize a team around something exciting and new than decreasing some arbitrary metric by 2%. 

 

There are a couple of important lessons to keep in mind when pursuing the unknown.

• Forget what you know - self-reported “experts” are limited by their worldview. If you’re trying to get a different result, you won’t do it by playing by the same rules your predecessors followed. Heuristics are great for making life easier - but they’re very limiting when trying to create something new. 
• Attack the hardest problems first - your biggest problems are your biggest opportunities. If you don’t deal with the big problems now, you’ll never get around to it, and you’ll waste time, energy, and potentially realize you have to pivot much too late.  
• Be comfortable being uncomfortable - Most people find failure taboo, and they’re deathly afraid of it. Tony Robbins talks about our tendency to avoid pain more actively than we pursue pleasure, and it’s true in business. But failure is a part of business. The people I consider most successful got there through incredible pain tolerance and increasingly intense problems that they continued to conquer. 
• Have a short memory for pain - Focus on the gain, not the pain. People often focus on not having enough money, not enough time, or simply not having enough. That scarcity mindset is dangerous and can lead to getting lost in pain and fear. Acknowledging the pain/fear and moving forward from a place of abundance and opportunity helps create opportunities. 

As well, a clear identity is important. You have to understand what you’re pursuing and how you want to attack the problem. At Capitalogix, we’ve gotten very in tune with our goals. 

We invent techniques that identify and adapt to what happens in markets. We apply the lessons learned from past experiences, data science breakthroughs, and hard work to eliminate the fear, greed, and discretionary mistakes that are the downfall of most traders and decision-makers.

Small businesses don’t have a monopoly on these mindsets and these opportunities, but companies like Y Combinator, X(and no, I don't mean the company formerly known as Twitter), or HeroX are few and far between ... Elon Musk is famous for moonshots like Tesla, SpaceX, Starlink, Neuralink, Xai, etc. Google and Microsoft pursue moonshots as well. 

Good news ... the future is big enough for them and you. 

Choose something that lights you up and leverages what you already know and who you already are.

So what’s your moonshot?

The Average NFL Player ...

When I woke up this morning, I saw that Dak Prescott, the star quarterback for the Dallas Cowboys, signed a new contract, making him the highest-paid player in NFL history. His new four-year, $240 million deal makes him the league’s first $60 million per year player. 

If you are curious, here is a list of the highest-paid NFL players in 2024.

Each of the 32 teams has an active roster of 53 players. That is 1,696 active roster players. Add the practice squad and account for injuries, and in a typical season, you end up with about 2,100 players per season.

Now that the NFL Football season is officially underway, I thought it would be interesting to look at each position’s composite player.

As you might expect, different sports have a different ratio of ethnicities, builds, and features. The same is true for different positions on a football team.  For example, you might expect more Pacific Islanders in Rugby or Asians in Badminton. You expect NBA players to be taller, swimmers to have longer arms, and football players to have more muscle. 

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

  

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. 

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). The survivors were generalists, not specialists.

In reality, you need both.

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 various schemes. 

On a related but slightly different note, I recently read a post called “Why Generalists Own the Future.” It says that, in the age of AI, it’s better to know a little about a lot than a lot about a little. But part of that rationale is that it is easy to find or create digital specialists to do the things people used to do.

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.

How ‘Bout Them Cowboys!

Some Perspective: "I'm Way Closer To Lebron Than You Are To Me!"

With the NFL starting its regular season this week, I was thinking about the talent and effort it takes to compete as a professional athlete.

Take a second to reflect on the journey required to become a pro. In general, the top players from a youth league became standouts in high school and then were star players in college before eventually making it to a professional team. But here's the kicker ... in any other context, they're elite, but unless they're superstars in the NFL, they're considered average or worse. Think about it. By definition, half of the players are below average. 

Meanwhile, I recently came across an example from the NBA that illustrates this concept in a funny but profound way.

There's a relatively famous quote from NBA journeyman, Brian Scalabrine, who said: 

"I'm way closer to Lebron (James) than you are to me!" - Brian Scalabrine

For context, as a USC Trojans men's basketball player, Scalabrine was the top scorer and a leader in field goals and rebounds. He then played 11 years in the NBA ... but at no point in that time was he a star. He didn't put up great (or even good) stats, he wasn't a household name (though he did pick up the nickname "White Mamba"), and he is nowhere near the caliber of player that Lebron James is. In fact, throughout his career, he averaged just 3.1 points, 2.0 rebounds, and .8 assists a game. But, remember, he was good enough to play at a pro level for 11 years.

As a result, many unprofessional (weekend warrior) athletes thought he was an easy target. One day, Brian was playing a rec league game where he dropped 60 points. He tweeted about it, and a bunch of people started tweeting back to the now 40+ years old former NBA player that they could beat him. There are funny YouTube videos about this.

Brian responded by replying:

"Listen. I may suck for an NBA player. Those guys are pretty good. But I don't suck compared to you. You suck compared to me." - Brian Scalabrine

He then accepted their challenge by asking them to send in videos of their play and committed that he would go 1-on-1 against the best of them.

Scalabrine then went on to play 4 of the best players who responded, with one of them having NCAA D1 experience.

The end result?

He outscored them 44-6 - with two of the players scoring 0 points. 

 

via YouTube

It should be self-explanatory, but it seems to be a concept many people struggle with. Any given pro player has been the best of the best throughout their journey. They're the 1% of the 1%. 

But that is probably true for you too. If you're reading this article, you're likely killing it compared to the average Joe. 

Many of us are in rooms with phenomenal business owners and operators. When you meet people like Peter Diamandis, Ray Dalio, or Richard Branson, it's easy to focus on the distance between you and them.

Recognize that it is still a huge accomplishment to be a Brian Scalabrine rather than a Joe Schmo. 

They don't recognize what you and me do recognize. When you're in the NBA, there's all kinds of tells, right? Like if a guy puts his hand like that, you know what he's gonna do. If a guy does a hesitation, you know what he's gonna do. All that stuff is like in real time in the NBA, you got to be so on top of the reads. It's not speed. You can't look at me and say my brain is slow. My brain is fast. My body might be slow, but I have to read whether a guy's gonna shoot, drive, go to the middle, pass. If you're not reading those things, you're not playing in the NBA. - Brian Scalabrine

A helpful reminder.

Keep it up – and as always ... Onwards!

Examining Life Expectancy & Longevity

Life expectancy has been on a steady global rise for longer than I've been alive. 

via worldometers

Meanwhile ... the United States has fallen to 48th on the list of countries with the highest life expectancy.

Hong Kong tops the list with an average life expectancy of 85.63 overall - and 88.26 years for females. 

For comparison, the U.S.'s average life expectancy is only 79.46.

Many factors potentially impact the findings, for example, the average height and weight of a population (with shorter & lighter people tending to live longer), diet, healthcare system, and work/life balance. 

While some of this is out of your control (OK, a lot of it is) - there are definitely things you can do to increase your healthy lifespan. Meanwhile, some people like Bryan Johnson are doing everything they can to live forever. 

Popular Mechanics put together a video series called How to Live Forever, or Die Trying, where they interview scientists and anti-aging gurus to give you insight into pursuing a future without death. 

Unfortunately, recent science has shown that adults in their mid-40s to early 60s begin to experience significant changes in their alcohol, caffeine, and lipid metabolism, an increase in risk of cardiovascular disease, and a noticeable decrease in their skin and muscle health. When you hit your 60s, you also begin to see negative changes in carbohydrate metabolism, immune regulation, kidney function, and a further decline in the previously mentioned factors. 

Here's the good news. Not only is science and technology getting better, but you're always in control. You can make lifestyle changes to increase your longevity, and you can also find supplements, treatments, and protocols that can reverse those factors of aging. Even simple measures like increasing your physical activity or avoiding alcohol before bed can make a massive difference. 

They say a healthy person has thousands of dreams, but an unhealthy person only has one.

That is one of the reasons I spend so much time and energy thinking about staying healthy, fit, and vital.

Focusing on the positive is important ... But to extend your healthy lifespan, you have to start by telling the truth and finding out what you and your body struggle with the most.

A doctor friend gave me some advice. He said it doesn't matter if you are on top of 9 out of 10 things ... it's the 10th that kills you.

Despite our best efforts, Mother Nature remains undefeated.

With that said, here are some of my previous articles on longevity and health: 

• Live Long & Prosper
• How Much Time Do You Have Left?
• Changing Your Definition Of Resolution
• Workouts That Work
• Getting Used To A New Normal (Pt 1, Pt 2, Pt 3)

The goal isn't just to stay alive longer; it's to live life to its fullest for as long as possible.

I recently joined a fantastic mastermind group called DaVinci 50, run by Lisa and Richard Rossi. It brings together a remarkable collection of medical professionals and entrepreneurs focused on the latest research, treatments, and opportunities in health and longevity.

Another great tool I rely on is Advanced Body Scan. Early detection is crucial, but so is tracking the history of your scans to monitor changes over time. In my opinion, the most valuable scan is always the next one.

Additionally, I use a growing list of trackers and biometric devices to measure my heart rate, along with apps and tools for mindfulness, breathwork, and journaling. Together, these practices recognize that mind, body, and spirit combine to define how you live your life.

To end this post, I'll use a farewell phrase I heard often while growing up ... it translates roughly to "go in health, come in health, and be healthy." It's a beautiful way to wish someone well on their journey, emphasizing the importance of health and well-being.

I hope you found something interesting.  Let me know what things and practices work best for you.

Capturing Gold

The Olympics have officially concluded.  For many, it was the ultimate display of the thrill of victory and the agony of defeat.  For others, it's a way to boast about their country's medal count.  If you're curious, here are the final medal standings.

One of the most captivating moments occurred in the men's 100-meter sprint.  It made me reflect on how years of preparation can come down to a few thousandths of a second determining the difference between Gold, Silver, and Bronze — or virtual irrelevance.

Last week, Noah Lyles broke a 20-year U.S. drought in the men's 100m final, winning gold with a 9.784 time.

Lyles came into the race ranked No. 1 in the world, but he had to run his fastest time ever to win the Olympic gold medal, and he did so by the slimmest of margins — 0.005 seconds.

In that race, Lyles achieved an average speed of 25.7 mph, and his max speed hit 27.84 mph.

Surprisingly, Lyles didn't lead the race until the final and most important moment.  Many thought that Jamaica's Kishane Thompson had the gold ... but advanced technology showed that Lyles surged ahead in the final stretch, edging Thompson out by a split second to claim victory.  Here is the photo finish.

 

via ESPN

It took over half a minute (much longer than the race itself) for the judges to announce the winner - it was that close. 

As a tech nerd, what I found most interesting about the win was the camera used to certify the win. 

Omega, which has been the official Olympics timekeeper for decades, released a new camera that shoots 40,000 frames per second, aimed directly at the finish line.

It reminded me of the facial recognition technology NFL teams like the Dallas Cowboys use to track - theoretically - every person who steps into a stadium.  The cameras are so good that when a crime is committed, they can completely track the perpetrator as they travel throughout the stadium.  The Cowboys' security office boasts that their camera system surpasses even the ones used by Las Vegas casinos to catch cheaters at the gaming tables.  However, it seems like Omega has taken things to a whole new level at the Olympics with its advanced camera technology this year.

Many think the 200m race is Lyles' specialty.  His personal best of 19.31 seconds in the 200m is the American record, making him the third fastest in the event.

Unfortunately, Lyles couldn't grasp gold in the 200.  He got Bronze instead.  However, after the race, he revealed that he ran the race with COVID ... which might explain his drop in performance.  Still, it stands as a testament of will to me.

As a side note, while the International Olympic Committee does not pay athletes for winning at the Olympics, many countries do!

 

via Voronai

While the U.S. isn't near the top of the list - American athletes who get gold bring home $37,500.  A silver nets you $22,500, and a bronze nets you $15,000. 

Of course, these medals can also lead to other compensation and endorsements - but the payout table was still interesting.

The achievements of athletes like Noah Lyles create national pride and open doors to numerous opportunities and rewards.

Meanwhile, the integration of advanced technology in the Olympics highlights the importance of innovation in sports.  As we celebrate these victories, we also look forward to the future advancements that will continue to shape the world of athletics and the world itself.

2024 Update: What Happens In An Internet Minute

The Internet is both timeless and timely in an interesting way.  While what's popular changes seemingly instantly, and what we're capable of doing on it continues to grow exponentially.  Ultimately, the Internet is the digital town square of a global village, where all types and professions gather. 

In 2011, I first wrote about what happens in 60 seconds on the Internet. 

I've since updated the article a few times.

• 2014
• 2018

Each time I write the article, I'm in awe at the amount of data we create and how much it has grown.  For example, looking back to 2011, I was amazed that users created 600+ new videos and 60 new blog posts each minute.  Those numbers seem quaint today. 

 

via DOMO

Shortly after I started sharing the articles, Data Never Sleeps started standardizing the data, which is helpful. 

Today, the Internet reaches 5.4 billion people.  Most of them also use social media. 

To add some more perspective, 

• In 2008, 1.4 billion people were online; in 2015, we were at 3 billion.  Now, that number has almost doubled again. 
• In 2008, Facebook only had 80 million users, and Twitter (now X) had 2 million users.
• In 2008, there were 250 million smartphones, and now there are almost 7 billion of them!

It is mind-blowing to consider what happens each minute on the Internet today.  For example, the 104,000 hours spent on Zoom represents a significant societal shift ... and the over 500 hours of video uploaded to YouTube highlights the incredible amount of content that's being created to share. 

In 2023, the world created approximately 120 zettabytes of data ... which breaks down to approximately 337,000 petabytes of data a day.  Broken down even further, it calculates to more than 15 Terabytes of new data created per person. 

The calculations about what happens in an Internet minute will change rapidly again because of AI.  Consider the amount of computing power and data it takes to power all of these new GPTs. Now, imagine the amount of new data that AI is creating.  Then, try to imagine the challenge we'll have figuring out what's real, what's made up, and what is simply wrong or intentionally misleading.

In addition, as more devices and digital WHOs start creating and sharing data, it's hard to fathom the ramifications and sheer increase in data. 

I'm curious about what the next five years have in store for us as we approach the 40th anniversary of the World Wide Web. 

The Law (And Flaw) Of Averages

The law of averages is a principle that supposes most future events are likely to balance any past deviation from a presumed average.

Take, for example, flipping a coin.  If you happen to get 5 "Heads" in a row, you'd most likely assume the next one should be "Tails" ... even though each flip has a 50/50 chance of landing on either. 

Even from this example, you can tell it's a flawed law.  While there are some reasonable mathematical uses of the law of averages, in everyday life, this "law" mostly represents wishful thinking. 

It's also one of the most common fallacies succumbed to by gamblers and traders. 

The concept of "Average" is more confusing and potentially damaging than you might suspect.

Perhaps you heard the story about how the U.S. Air Force discovered the 'flaw' of averages by creating cockpits based on complex mathematics surrounding the average height, width, arm length, etc., of over 4,000 pilots.  Despite engineering the cockpit to precise specifications, pilots crashed their planes on a too-regular basis. 

The reason?  With hindsight, they learned that very few of those 4,000 pilots were actually "average".  Ultimately, the Air Force re-engineered the cockpit and fixed the problem. 

It's a good reminder that 'facts' can lie, and assumptions and interpretations are dangerous.  It's why I prefer taking decisive action on something known, rather than taking tentative actions about something guessed. 

via ReasonTV

Our Brains and the Illusion of Balance

Our brains are wired to find patterns, even in random events.  This tendency, known as apophenia, can lead us to see connections where none exist.

The Misleading Law of Averages

It's this very tendency that fuels the misconception of the law of averages.  We expect randomness to "even out" because we see patterns in short sequences.  This can be tempting to believe, especially when dealing with chance events.

The law of averages is a common idea that suggests future events will even out past results to reach some average outcome.  For instance, going back to our earlier coin-flipping example,  after getting five heads in a row, it's natural to assume the next flip is "due" to be tails.  However, that's not how probability works.  Each coin flip is an independent event (with a 50% chance of landing on heads or tails), regardless of previous flips.  The coin doesn't "remember" what happened before.

Apophenia isn't limited to coin flips.  For instance, you might see your lucky number appearing repeatedly throughout the day, leading you to believe it has a special meaning – even though each instance is completely independent.

This natural desire for order and predictability can lead us astray when dealing with chance events.

Why is it Flawed?

The law of averages often leads to a misconception called the gambler's fallacy.  This fallacy is the belief that random events can somehow "correct" themselves to reach an average.  In reality, every coin flip, roll of the dice, or spin of the roulette wheel is a fresh start with its own discrete probabilities.  The odds remain the same no matter how long the losing streak persists.

Are there ever times when it applies?

It's important to distinguish the law of averages from the law of large numbers, a well-established statistical principle.  The law of large numbers states that as the number of random events increases, the average outcome gets closer to the expected probability.  This applies in situations where many trials happen, and while past results of individual events are independent, the law describes the behavior of averages over a large number of trials.  For instance, the average weight of a large sample of apples will likely be close to the expected average weight of an apple, even if some individual apples are heavier or lighter than expected.

However, in everyday situations (with a limited number of events), the law of averages is generally not a helpful way to think about chance or probabilities.

Understanding these misconceptions can help us make better decisions and avoid false expectations based on flawed reasoning.

Psychological Reasons Behind the Belief

Human decision-making suffers from a range of tendencies and biases.

Earlier, we discussed the tendency to find patterns, even where none exist.  Next, we will consider cognitive bias.  In our coin-flipping example, it is the representativeness heuristic that makes us assume that small samples should resemble the larger population they come from.

Emotional factors also play a role.  The desire for control in uncertain situations can make us latch onto the law of averages as a comforting notion.  Believing that things will "even out" gives us a sense of predictability and fairness in an otherwise random world.

Additionally, social influences can reinforce these beliefs.  Stories and anecdotes about streaks ending or luck changing often circulate among friends and family, further embedding the misconception into our collective consciousness.

Understanding these psychological reasons helps explain why the law of averages persists despite its flaws.  Recognizing these biases can empower us to think more critically about probability and chance events.

Improving Decision-Making in Gambling and Investing

Recognizing the fallacy of the law of averages can significantly enhance decision-making, particularly in gambling and investing.  Understanding that each event is independent can help participants make more rational choices.  Instead of chasing losses with the hope that a win is "due," savvy speculators understand their odds remain constant and may choose to walk away or set strict limits on their betting behavior.

In investing, this knowledge is equally crucial.  Many factors influence markets.  Nonetheless, believing that a stock "must" rebound after a series of declines too often leads to poor investment decisions.  Investors who grasp that past performance does not dictate future results are better equipped to evaluate investments based on fundamentals rather than emotions or flawed expectations.

By dispelling these misconceptions, you can approach gambling or investing with a clearer mindset, reducing the risk of substantial losses driven by erroneous beliefs about probability and chance.

You can also eliminate fear, greed, and discretionary mistakes by relying on algorithms to calculate realtime expectancy scores and take the road less stupid.  Take a different kind of chance.  Just ask our AI Overlords; they'll tell you what to expect!