Even though markets and the economy are not the same thing, many voters believe they are. Consequently, in an election year, I suspect the government will push every button and pull every lever to boost the market leading into November.
Speaking of the markets, they have been pretty volatile the last few weeks. They have posted some of their worst days since COVID-19 but some of the best, too.
We find ourselves in a particularly partisan election year, with lots of uncertainty about who is running, what they stand for, and whether they can make a difference – or even do the job.
The situation feels worse because scary geopolitical events (that threaten World War 3) punctuate seemingly endless negative news cycles.
Now, on to the real point ... those things don’t matter and shouldn’t steal your focus. Why? Because that’s the playing field we all have to navigate.
There will be winners and losers. The key distinction lies in whether you choose to focus on opportunities or risk.
So, I thought this would be an excellent time to revisit how to cope with losses and manage your anxieties in “scary times.”
The Anxiety Antidote
During scary times, many people suffer from “I should have ...”, or “if I would have ...”, or “if I could have ...” thoughts.
The problem is that thoughts like those create more stress and distraction.
I’m reminded of a quote.
"When the trough gets smaller ... the pigs get meaner." - Dan Sullivan
Negative focus highlights loss, difficulties, past events, missing things, and what you don’t want.
Think of them as an unhealthy reflex that wastes energy, confidence, and time.
All We Have To Fear Is Fear Itself
I often talk about market psychology and human nature. The reason is that markets reflect the collective fear and greed of their participants... people tend to get paralyzed during scary times like these.
But it’s not the economy that makes people feel paralyzed. People feel paralyzed because of their reactions and their beliefs about the economy. Your perception becomes your reality.
A little examination reveals that most fear is based on a “general” trigger rather than a “specific” trigger. In other words, people are afraid of all the things that could happen and are paralyzed by the sheer scope of possibilities. These things don’t even have to be probabilities to scare them.
You gain a competitive advantage as soon as you recognize that it’s not logical. Why? Because as soon as you distinguish that fear as not necessarily true, you can refocus your insights and energy on moving forward. You can act instead of react. You make better decisions when you come from a place of calm instead of fear... so create that calm.
Even a tough environment like this presents you with opportunities if you watch for them ... or even better ... if you create them.
The Scary Times Success Manual
The goal is to move forward and feel better.
Strategic Coach offers ten strategies for transforming negativity and unpredictability into opportunities for growth, progress, and achievement. They call it the “Scary Times Success Manual,” and what follows are some excerpts:
Forget about your difficulties, focus on your progress.
Because of some changes, things may not be as easy as they once were. New difficulties can either defeat you or reveal new strengths. Your body’s muscles always get stronger from working against resistance. The same is true for the “muscles” in your mind, spirit, and character. Treat this period of challenge as a time when you can make your greatest progress as a human being.
Forget about events, focus on your responses.
When things are going well, many people think they are in control of events. That’s why they feel so defeated and depressed when things turn bad. They think they’ve lost some fundamental ability. The most consistently successful people in the world know they can’t control events - but continually work toward greater control over their creative responses to events. Any period when things are uncertain is an excellent time to focus all of your attention and energy on being creatively responsive to all the unpredictable events that lie ahead.
Forget about what’s missing, focus on what’s available.
When things change for the worse, many desirable resources are inevitably missing - including information, knowledge, tools, systems, personnel, and capabilities. These deficiencies can paralyze many people, who believe they can’t make decisions and take action. A strategic response is to take advantage of every resource that is immediately available to achieve as many small results and make as much daily progress as possible. Work with every resource and opportunity, and your confidence will continually grow.
Forget about your complaints, focus on your gratitude.
When times get tough, everyone must make a fundamental decision: complain or be grateful. In an environment where negative sentiment is rampant, the consequences of this decision are much greater. Complaining only attracts negative thoughts and people. Gratitude, on the other hand, creates the opportunity for the best thinking, actions, and results to emerge. Focus on everything you are grateful for, communicate this, and open yourself to the best possible consequences.
We can pontificate all day long on the short-term causes of the rises and falls of markets, but I don’t think it does much good. I let the algorithms worry about those. It’s the larger trends we have to be personally aware of.
I sound like a broken record, but volatility is the new normal.
Markets exist to trade, and if there’s no “excitement” on either side, trades don’t happen.
Trades are getting faster, which means more information has to confuse both the buyer and the seller.
You’re no longer competing solely against companies and traders like you. It’s like the cantina from Star Wars; you’ve got a bunch of different creatures (and bots) interacting and fighting with each other, trying to figure out how to make their way through the universe.
Pair that with all the fear and uncertainty, and you’ve got a recipe for increased volatility and noise. That means that the dynamic range of a move will be wider and happen in a shorter period of time than ever before. You’ll hear me echo this thought over the next few years as the ranges continue to expand and compress. Cycles that used to play out over weeks now take days or hours. The game is still the same; it just takes a slightly different set of skills to recognize where the risks and opportunities are.
Today’s paradigm - both in life and trading - is about noise reduction. It’s about figuring out what moves the needle and focusing only on that.
The crucial distinction is between adding data and adding information. Adding more data does not equal adding more information. In fact, blindly adding data increases your chances of misinformation and spurious correlations.
My final comment is that there’s a difference between investing and trading, and while humans can invest, if you’re “personally” still trying to trade - you’re likely playing a losing game. If you don’t know what your edge is, you don’t have one.
If you’re investing, I’ll advise you to act like a robot. If you removed human fear and greed from your decision-making - what would you do?
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.
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.
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.
Nine years in front of entertainment devices - another 10.5 years spent working. You get the idea.
If you have goals you want to accomplish, aspirational travel, and lifestyle plans - this really puts the idea of finding and living your passion in perspective.
Do you have the time to waste it?
VisualCapitalist put together a chart projecting longevity based on 2020 mortality rates.
I turned 60 this July, so I only have 20 years left, according to this calculator. I expect more!
There are some interesting statistical facts in this; for example, an average American baby boy can expect to live until 74 ... but if that boy turns 21, his life expectancy jumps to over 75.
While these numbers seem pretty high, there are two things to consider. First, COVID heavily reduced these numbers because mortality rates went up. That likely won't continue (though it will likely continue to affect your insurance premiums and pension benefits).
Also, remember that these numbers are based on 2020 averages, which likely differ from you (specifically considering your race, income, location, etc.). These numbers also don't take into account expected medical and technology advances, etc.
Finally, I think Purpose is one of the most important catalysts of longevity. People often die when they retire ... not because they're done working, but because they're done striving.
Some Professors put together IKEA-inspired instructional booklets for their algorithms and data-structures lectures. The idea was to make easy-to-understand explanations by removing words, and only using images. Ideally, this would allow them to be understood regardless of their native language or culture.
This is a pretty cool idea, or at least I thought so. My youngest son said, "I don't particularly understand IKEA directions or algorithms .... so this is basically the worst of both worlds for me." Finally, we agree about something!
Hopefully, you find it helpful. If not, there's always Wikipedia.
There's a new trend of AI-generated profile pictures - using tools like avatar.ai.
Below are some sample results my son, Zach, got after downloading an iPhone app called Lensa. The company that makes it also offers a product called Prisma that is worth looking at as well. He paid $4 within Lensa to generate these AI photos (for context, avatar.ai charges more than 5x as much). He uploaded 17 photos from different angles (and with different expressions), and the app promised 50 pieces from 4 styles.
What do you think of the results? I thought some of them were surprisingly good.
Some were not so good ... (or at least outside my zone of artistic preferences).
After seeing his, I'll admit I got curious and made my own.
To be honest, these apps are still volatile ... meaning, sometimes they are good enough to seriously impress – but they also can underwhelm from time to time. Check out DALL-E for more examples of the dynamic range of possibilities and results.
Regardless, I am impressed with AI art's progress and momentum. Recently, generative AI has gotten a lot of hate (along with the hype), nonetheless, people are talking about it (meanwhile AI art is still not as polarizing as Kanye).
The reality is, most of these tools still are an elegant use of brute force. Nonetheless, I am bullish. Hardware and software are getting better ... and when fed more data, generative art depictions get better as well.
The uses continue to get more elegant and complex as time passes ... but we're still coding the elegance.
Not only does this help us see far away systems that we've never seen before, but it also provides detail to the things we have seen.
First, bring order to chaos …. Then, wisdom comes from making finer distinctions. With that in mind, I'm excited to see how this drives the future of science.
Here's a brief video from Neil Degrasse Tyson on the new telescope.
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?
It's an interactive video that uses your webcam to walk you through the various assessments on BMI, emotion, beauty, etc. At the end, it'll give you your life expectancy, and then your "normal score".
It's not the most complex use of AI, but it provides interesting insights, and is becoming increasingly prevalent.
Governments, police stations, retail stores, etc. all use this technology to track individuals, and if you remember one of my previous articles - there are plenty of cameras to go around.
If you did the demo, were you surprised by the results?
An engineer and oceanographer, Derya Akkaynak, created an algorithm that removes the water from underwater images - meaning it takes away the haze & tint that come with most underwater photos. It doesn't require a color chart either (though it does need distance information it gathers through numerous photographs from different angles).
The Sea-thru method estimates backscatter using the dark pixels and their known range information. Then, it uses an estimate of the spatially varying illuminant to obtain the range-dependent attenuation coefficient. Using more than 1,100 images from two optically different water bodies, which we make available, we show that our method with the revised model outperforms those using the atmospheric model. Consistent removal of water will open up large underwater datasets to powerful computer vision and machine learning algorithms, creating exciting opportunities for the future of underwater exploration and conservation.
Essentially, the algorithm goes through every pixel and color balances the image based on collected data on distance/color degradation.
As with most algorithms of this type - the more data we feed it, the better it gets. Sea-thru already has great applications for furthering ocean-based research, but the follow-up question is can this algorithm be extrapolated outward to deal with other atmospheric conditions outside of water - smog, etc.
What other uses can you imagine? It is not hard to imagine how this could be applied to market data either ... Interesting stuff!
AI has plenty of weaknesses - I've talked about some before, and I'll continue to talk about them in the future, but two specific weaknesses were brought to my attention this week.
AI Portraits - Won't Steal Your Data, But Might Steal Your Soul Dorian Gray-Style
I assume most of you have seen the FaceApp trend - people age-ifying their photos and unwittingly giving the rights to their photos to a shadowy Russian tech company. You've also likely seen AI paintings selling for ridiculous money.
But have you seen their lovechild AI Portraits - a more wholesome experiment run by the MIT-IBM Watson AI Lab. AI Portraits uses approximately 45,000 different Renaissance-esque 15th-century portraits and General Adversarial Networks to translate your selfie into an artistic masterpiece. It's novel because instead of simply drawing over your face it's generating new features and creating an entirely new version of your face.
Mauro Martino via YouTube
It's impressive because it determines the best style for your portrait based on your features, your background, and more.
However, it's not without "flaw". The choice of 15th-century portraiture creates a couple of clear biases. At the time, portraits of smiling or laughing individuals were rare, so your smile will likely not transfer. As well, there's a clear bias towards anglo-saxonification.
My son got excited while playing with the app and sent several of his coworkers, friends, and family through the app. If you look at the bottom right, you'll see my lovely wife Jen's portrait.
Most of you have seen my wife and know that she is Indonesian, something that is very much removed from the translation.
All photos are immediately deleted from their servers after creating your image, so your privacy is safe (this time!)
All biases can be considered quirks of this current iteration of the program - which I do earnestly believe is interesting.
Later, you can imagine an AI choosing between various different styles of art based on a cornicopia of factors - or off human selection - but you have to walk before you can run, and this is a fun way to get people excited about AI.
Computer Answering Systems - No, The Answer Isn't 42
“Yes…Life, the Universe, and Everything. There is an answer. But I’ll have to think about it...the program will take me seven-and-a-half million years to run.” - Deep Thought, Hitchhiker's Guide To The Galaxy
Think of the global excitement when IBM's Watson first beat Ken Jennings in Jeopardy ... it's widely considered one of the holy grails of AI research to create a machine that truly understands the nuances of language and human thought. Yet, if you've talked to Alexa recently, you know there's a long way to go.
Today's question answering systems are basically glorified document retrieval systems. They scan text for related words and send you the most relevant options. Researchers at the University of Maryland recently figured out how to easily create questions that stump AI (without being paradoxical, impossible to answer, requiring empathy etc.) in order to enhance those systems.
A system that understands those questions will be a massive step toward a real understanding and processing of language.
So what's the secret to these "impossible" questions?
The questions revealed six different language phenomena that consistently stump computers. These six phenomena fall into two categories. In the first category are linguistic phenomena: paraphrasing (such as saying “leap from a precipice” instead of “jump from a cliff”), distracting language or unexpected contexts (such as a reference to a political figure appearing in a clue about something unrelated to politics). The second category includes reasoning skills: clues that require logic and calculation, mental triangulation of elements in a question, or putting together multiple steps to form a conclusion [...]
For example, if the author writes “What composer's Variations on a Theme by Haydn was inspired by Karl Ferdinand Pohl?” and the system correctly answers “Johannes Brahms,” the interface highlights the words “Ferdinand Pohl” to show that this phrase led it to the answer. Using that information, the author can edit the question to make it more difficult for the computer without altering the question’s meaning. In this example, the author replaced the name of the man who inspired Brahms, “Karl Ferdinand Pohl,” with a description of his job, “the archivist of the Vienna Musikverein,” and the computer was unable to answer correctly. However, expert human quiz game players could still easily answer the edited question correctly.
The main change is increasing the complexity of the questions by nestling another question. In the above example, the second question forces the AI not only to decide the composer inspired by Karl Ferdinand Pohl, but also to decipher who is inspiring (hint: It's Karl Ferdinand Pohl).
AI isn't great yet at mental triangulation; at putting together multiple steps to form a conclusion. While AI is great at brute force applications - we're still coding the elegance.
An Antidote For Anxiety & Scary Times
People seem rattled right now, don’t they?
Wallets have been tight, and fears of a recession have run rampant.
Even though markets and the economy are not the same thing, many voters believe they are. Consequently, in an election year, I suspect the government will push every button and pull every lever to boost the market leading into November.
Speaking of the markets, they have been pretty volatile the last few weeks. They have posted some of their worst days since COVID-19 but some of the best, too.
We find ourselves in a particularly partisan election year, with lots of uncertainty about who is running, what they stand for, and whether they can make a difference – or even do the job.
The situation feels worse because scary geopolitical events (that threaten World War 3) punctuate seemingly endless negative news cycles.
Now, on to the real point ... those things don’t matter and shouldn’t steal your focus. Why? Because that’s the playing field we all have to navigate.
There will be winners and losers. The key distinction lies in whether you choose to focus on opportunities or risk.
So, I thought this would be an excellent time to revisit how to cope with losses and manage your anxieties in “scary times.”
The Anxiety Antidote
During scary times, many people suffer from “I should have ...”, or “if I would have ...”, or “if I could have ...” thoughts.
The problem is that thoughts like those create more stress and distraction.
I’m reminded of a quote.
Negative focus highlights loss, difficulties, past events, missing things, and what you don’t want.
Think of them as an unhealthy reflex that wastes energy, confidence, and time.
All We Have To Fear Is Fear Itself
I often talk about market psychology and human nature. The reason is that markets reflect the collective fear and greed of their participants... people tend to get paralyzed during scary times like these.
But it’s not the economy that makes people feel paralyzed. People feel paralyzed because of their reactions and their beliefs about the economy. Your perception becomes your reality.
A little examination reveals that most fear is based on a “general” trigger rather than a “specific” trigger. In other words, people are afraid of all the things that could happen and are paralyzed by the sheer scope of possibilities. These things don’t even have to be probabilities to scare them.
You gain a competitive advantage as soon as you recognize that it’s not logical. Why? Because as soon as you distinguish that fear as not necessarily true, you can refocus your insights and energy on moving forward. You can act instead of react. You make better decisions when you come from a place of calm instead of fear... so create that calm.
Even a tough environment like this presents you with opportunities if you watch for them ... or even better ... if you create them.
The Scary Times Success Manual
The goal is to move forward and feel better.
Strategic Coach offers ten strategies for transforming negativity and unpredictability into opportunities for growth, progress, and achievement. They call it the “Scary Times Success Manual,” and what follows are some excerpts:
Forget about your difficulties, focus on your progress.
Because of some changes, things may not be as easy as they once were. New difficulties can either defeat you or reveal new strengths. Your body’s muscles always get stronger from working against resistance. The same is true for the “muscles” in your mind, spirit, and character. Treat this period of challenge as a time when you can make your greatest progress as a human being.
Forget about events, focus on your responses.
When things are going well, many people think they are in control of events. That’s why they feel so defeated and depressed when things turn bad. They think they’ve lost some fundamental ability. The most consistently successful people in the world know they can’t control events - but continually work toward greater control over their creative responses to events. Any period when things are uncertain is an excellent time to focus all of your attention and energy on being creatively responsive to all the unpredictable events that lie ahead.
Forget about what’s missing, focus on what’s available.
When things change for the worse, many desirable resources are inevitably missing - including information, knowledge, tools, systems, personnel, and capabilities. These deficiencies can paralyze many people, who believe they can’t make decisions and take action. A strategic response is to take advantage of every resource that is immediately available to achieve as many small results and make as much daily progress as possible. Work with every resource and opportunity, and your confidence will continually grow.
Forget about your complaints, focus on your gratitude.
When times get tough, everyone must make a fundamental decision: complain or be grateful. In an environment where negative sentiment is rampant, the consequences of this decision are much greater. Complaining only attracts negative thoughts and people. Gratitude, on the other hand, creates the opportunity for the best thinking, actions, and results to emerge. Focus on everything you are grateful for, communicate this, and open yourself to the best possible consequences.
Final Thoughts
We can pontificate all day long on the short-term causes of the rises and falls of markets, but I don’t think it does much good. I let the algorithms worry about those. It’s the larger trends we have to be personally aware of.
I sound like a broken record, but volatility is the new normal.
Pair that with all the fear and uncertainty, and you’ve got a recipe for increased volatility and noise. That means that the dynamic range of a move will be wider and happen in a shorter period of time than ever before. You’ll hear me echo this thought over the next few years as the ranges continue to expand and compress. Cycles that used to play out over weeks now take days or hours. The game is still the same; it just takes a slightly different set of skills to recognize where the risks and opportunities are.
Today’s paradigm - both in life and trading - is about noise reduction. It’s about figuring out what moves the needle and focusing only on that.
The crucial distinction is between adding data and adding information. Adding more data does not equal adding more information. In fact, blindly adding data increases your chances of misinformation and spurious correlations.
My final comment is that there’s a difference between investing and trading, and while humans can invest, if you’re “personally” still trying to trade - you’re likely playing a losing game. If you don’t know what your edge is, you don’t have one.
If you’re investing, I’ll advise you to act like a robot. If you removed human fear and greed from your decision-making - what would you do?
Keep calm and carry on.
Posted at 09:21 PM in Business, Current Affairs, Healthy Lifestyle, Ideas, Market Commentary, Personal Development, Pictures, Religion, Science, Television, Trading, Trading Tools | Permalink | Comments (0)
Reblog (0)