Capitalogix

Here Are Some Links For Your Weekly Reading - January 27th, 2019

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

 

Lighter Links

• Giving Algorithms a Sense of Uncertainty Could Make Them More Ethical.(TechReview)
• How Musicians Communicate Non-Verbally While Performing.(PsychCentral)
• Welcome to the World's Largest Gathering of Humans. (NPR)
• The Evolutionary Advantages of an Addictive Personality. (Scientific American)
• George Orwell Predicted Cameras Would Watch Us in Our Homes; He Never Imagined We'd Gladly Buy and Install Them Ourselves.(OpenCulture)

 

 

Trading Links

• The Weaponization of Artificial Intelligence. (Forbes)
• Apple Named 'World's Most Admired Company' for 12Th Year in a Row.(MacRumors)
• The Government Shutdown May Ripple through the IPO Market for Months. (Quartz)
• Billionaire Ray Dalio Shares a 3-Step Formula for Anyone to Start Investing.(CNBC)
• Ex-Goldman Banker Describes Finance as "Dark Art," Advocates Running McDonalds Franchise Instead. (News)

 

A Look Back at "The Crazy Ones"

I remember being mesmerized the first time I saw Apple Computers iconic "Crazy Ones" video as part of their Think Different campaign.

Steve Jobs originally recorded a version of "The Crazy Ones" himself, but chose to release the Richard Dreyfuss narrated version. 

 

via YouTube

Here is the text version of the script.

 

Here's to the crazy ones.
The misfits.
The rebels.
The troublemakers.
The round pegs in the square holes.

The ones who see things differently.

They're not fond of rules.
And they have no respect for the status quo.

You can quote them, disagree with them,
glorify or vilify them.
About the only thing you can't do is ignore them.

Because they change things.

They push the human race forward.

While some may see them as the crazy ones,
we see genius.

Because the people who are crazy enough to think
they can change the world, are the ones who do.

    –     © 1997 Apple Computer, Inc.

Click here for extra material about the video and campaign. 

I think it has held up pretty well, and I had this piece of art commissioned for my office. 

There's a lot to be said for carving your own path, for pushing past perceived limits and accomplishing something hard to ignore.  

 

Here Are Some Links For Your Weekly Reading - January 20th, 2019

Most citizens don't have big savings account to buffer them against an unexpected expense or loss of income.

The Government Shutdown is one of the curveballs most workers haven't planned for adequately.

 

Actions have consequences.

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

 

Lighter Links

• Full Translation: China's 'New Generation Artificial Intelligence Development Plan' (2017). (Newamerica)
• Apple Buys 50 Business Class Seats from San Francisco to Shanghai Every Day. (MacRumors)
• Ford Built a Sweaty Robot Butt to Simulate Your Sweaty Human Butt. (BGR)
• Intimate Portraits of People over 100 Years Old Reveal the Beauty of Aging Bodies. (MyModernMet)
• Costco is Selling a 27-Pound Tub of Mac and Cheese that Lasts 20 Years. (BusinessInsider)

 

Trading Links

• Fear of Algorithm Trading is Really Just the Fear of the Unknown. (Quartz)
• Hedge Funds Suffer Worst Year since 2011. (FT)
• Nearly Half of Workers Earn Less Than $30,000. (Ritholtz)
• Michael Dell Gets $12 Billion Richer with Break from Public Eye. (Fortune)
• The New Impossible Burger 2.0 Won Everyone's Mouth at CES 2019, but That's Just the Beginning. (Forbes)

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)

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)

 

 

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)

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)

 

The Six Biggest Mistakes Ordinary Investors Make

It's your livelihood, it's your retirement, it's your future. 

Tony Robbins released an infographic on the six biggest mistakes ordinary investors make. 

1. Seeking confirmation to your own beliefs
2. Conflating recent events with ongoing trends
3. Overconfidence
4. Swinging for the fences
5. Staying Home (tendency to invest in things that are familiar)
6. Negativity Bias (tendency to overemphasize negative experiences)

In other words, the biggest threat to your trading profits is your own brain.  Humans are wired to avoid pain and seek pleasure ... and those tendencies just aren't conducive to smart trading. 

It's getting harder to find an edge, let alone maintain one. 

If you don't know what your edge is, you don't have one.

The reality is, over 90% of trades are electronic, and over 70% are algorithmic.

Do you think those numbers are going to increase or decrease?

Firms are using faster computers and smarter algorithms.  On top of that, high-frequency traders are skimming alpha on the executi0n. 

Here's one thing you can predict ... It is getting harder for humans to trade against the machines.

Momentum is building ... but, it already happened.  The new world of trading is quantitative. 

 

 The best way to avoid fear, greed, and discretionary mistakes is to avoid them.