Capitalogix

Here Are Some Links For Your Weekly Reading - May 26th, 2019

Theresa May has just announced her resignation as UK Prime Minister. She's faced massive criticism for an inability to come to a resolution on Brexit, and missing two deadlines. A new PM will be appointed in July.

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

 

Lighter Links:

 

• Our Coming DNA Nightmare, as Outlined by a Dystopian Graphic Novel. (FastCompany)
• Google May Know You Better Than You Know Yourself. (Wall Street Journal)
• Leonardo Da Vinci Designed an Ideal City, Centuries Ahead of Its Time. (TheConversation)
• U.S. Among the Ten Most Stressed Nations Worldwide [Infographic]. (Forbes)
• Princeton Valedictorian Gets Engaged to Her 71-Year-old Former Professor. (FoxNews)

 

Trading Links:

• Economics in the Age of Big Data. (Science)
• These are the 20 Highest-Paid World Leaders. (CNW)
• America's Strong Economic Growth this Year Surprises Economists. (Economist)
• Millionaires Flee Their Homelands as Tensions Rise and Taxes Bite. (Bloomberg)
• This Map Showing the Fastest and Slowest Internet Speeds in the US Could Predict the Path of a Silicon Valley Startup Exodus. (BusinessInsider)

How Warren Buffet Got His Start

Warren Buffett is a legend for many reasons. Foremost among them might be that he's one of the few investors who clearly has an edge ... and has for a long time. From 1976 to 2017 his Sharpe ratio (excess return relative to risk) was approximately double the overall market. Berkshire Hathaway now has over $700 billion in assets – and is still performing well. 

While many people consider Buffett to be an investor,  I also consider him to be an entrepreneur.

At the age of six, he started selling gum door to door. Obviously, selling gum wasn't the key to his path to riches.  So, how did he make his first million?  Here's a video that explains it.

 

via Coolnimation

For context, he made his first million at age 30, which was in 1960. For context, a million dollars in 1960 would be worth about $8.5 million today.

Buffet has always been honest about his bread-and-butter "trick" ...  he buys quality companies at a discount and holds on to them.

It is fascinating to recognize how much the world has changed – and yet how much it stayed the same.

For extra viewing: Warren Buffett, Charlie Munger, and Bill Gates recently did a full 2-hour interview with CNBC. You can watch it here.

Here Are Some Links For Your Weekly Reading - April 12th, 2019

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

Lighter Links:

• Here's How Google Knows in Less Than 5 Minutes If Someone Is a Great Leader. (Inc)
• What Amazon Knows About You. (Axios)
• Julio Iglesias Has an Absolutely Massive Net Worth and Owns an Airport.(CNW)
• Scientist: Alien Life Now Seems Inevitable and Possibly Imminent. (Futurism)
• This Trick Helped 96% of WWII US Military Pilots Learn to Fall Asleep within 2 Minutes, Even After Drinking Coffee. (BusinessInsider)

 

Trading Links:

• One Out of Every 11,600 People in San Francisco is a Billionaire. (Vox)
• Here's Who Stands to Get Rich from Uber's IPO. (ComplianceX)
• Vegan-Friendly, Celeb-Backed Beyond Meat Has 2019'S Best U.S. IPO. (Time)
• If You Invested $1,000 in Apple in 2009, Here's How Much You'd Have Now. (CNBC)
• Man Credited With Calling the 2008 Crisis Says the Next 20 Years in the Stock Market Will Break a Lot of Hearts'. (MarketWatch)

Here Are Some Links For Your Weekly Reading - May 5th, 2019

 

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

Lighter Links:

• These are Amazon's 38 Rules for Success. (FastCompany)
• Amazon Used an AI to Automatically Fire Low-Productivity Workers. (Futurism)
• Cornell Scientists Create Living' Machines that Eat, Grow, and Evolve. (TheNextWeb)
• Drinking Tequila Could Help You Lose Weight. (Elle)
• Is It True that It's More Painful to Come Second Rather Than Third? New Insights from the 2016 Olympics. (Digest)

 

Trading Links:

• Making Sense of the Market in the Age of Algorithmic Trading. (Barrons)
• The next Gig Economy Will Be On-demand Knowledge.(WEForum)
• Central Banks Extraordinary Policies: What Could Go Wrong.(SeeItMarket)
• Super Rich Ditching Jet Ownership for a Portfolio of Aviation Options. (Bloomberg)
• If You Invested $1,000 in Microsoft in 2009, Here's How Much You'd Have Now. (CNBC)

 

 

Gartner's 2018 Hype Cycle for Emerging Technologies

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

What's a "Hype Cycle"?

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

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

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

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

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

 

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

What's exciting this year? 

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

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

via Gartner

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

 

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

 

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

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

 

Which technologies do you think will survive the hype?

Reinventing Hedge Funds

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

 

 

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

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

 

 

via IBM Analytics

Think of it this way: 

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

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

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

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

 

Playing a New Game

 

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

 

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

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

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

 

 

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

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

 

 

We live in exciting times.  Onwards!

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

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

Lighter Links:

• What are the Most Promising Uses for Blockchain We Haven't Seen Yet? (Forbes)
• Sperm and Sensibility: The Modern World of Designer Children. (TLS)
• Thousands of Amazon Workers are Listening in on Echo Audio, Report Says. (AppleInsider)
• Strength Training for the Lungs: Why Heavy Breathing Could Be a Shortcut to Improving Your Health. (Telegraph)
• Forecasting the Future: Can the Hive Mind Let Us Predict the Future? (Futurism)

 

Trading Links:

• NVIDIA AI Research Points to an Evolution of the Chip Business. (ZDNet)
• Philip Morris International is Sticking with E-Cigs, Not Marijuana. (Fool)
• This Simple Map Shows the Biggest Employers in Each State. (Good)
• Lyft's I.P.O. is Making the Same Circle of Men Rich, Again. (New York Times)
• The Future of Electric Cars is Happening Now in China. (Quartz)

 

 

Don't Miss The Forest For The Trees: Change Blindness

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

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

According to the ancient Greek philosopher Heraclitus: 

"Change is the only constant in life" 

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

Maybe he didn't pay his taxes. 

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

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

 

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

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

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

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

It is all about perspective, isn't it? 

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

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

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

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

 

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

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

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

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

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

Lighter Links:

• Scientists Plead to Stop Creation of Killer Robots: We're at 'The Brink of a New Arms Race'. (FoxNews)
• Moratorium on Human Genome Editing: Time to Get It Right. (HastingsCenter)
• 'Those Who Obeyed the Rules Were Favored by Evolution'.(Spiegel)
• Meet the World's Oldest Confirmed Person, 116-Year-Old Kane Tanaka. (TwistedSifter)
• Why Democrats Want to Abolish the Electoral College and Republicans Want to Keep It. (Fortune)

Trading Links:

• Why Companies that Wait to Adopt AI May Never Catch Up.(HBR)
• Iranian Hackers Have Hit Hundreds of Companies in past Two Years. (Wall Street Journal)
• What is an Inverted Yield Curve and What Does It Really Mean? (TheStreet)
• S&P 500 Posts Best First Quarter in 21 Years. (FoxBusiness)
• Bill Gates is Back in the $100 Billion Club, and Not All Thanks to Microsoft. (CNW)

 

 

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

 

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

Lighter Links:

 

• 7 Odd Traits Geniuses, Masters and Entrepreneurs All Have in Common.(Forbes)
• Nest Founder: I Wake up in Cold Sweats Thinking, What Did We Bring to the World?. (FastCompany)
• Bill Gates: AI is like Nuclear Weapons and Nuclear Energy in Danger and Promise. (Vox)
• Artificial Intelligence and Ethics. (HarvardMagazine)
• These are All the World's Major Religions in One Map. (WEForum)

 

Trading Links:

• Just Because You're Paranoid, Doesn't Mean the Algorithms Aren't out to Get You. (TimHarford)
• Here are the Top Risks on Goldman Sachs CEO David Solomon's Radar.(Finance)
• UBS CEO Says this is One of the Worst First-quarter Environments in History. (CNBC)
• Apple Sold 35 Million AirPods in 2018, Currently Most Popular 'Hearable' Brand. (AppleInsider)
• Facebook, Google and Other Big Tech Giants are about to Face a Reckoning, State Attorneys General Warn. (Washington Post)