Capitalogix

Replicas: Deep Fakes and Voice Replication

Fake news was scary enough ... but now it is going to a new level.  Technology is going to make it harder to find the “signal” in the “noise”.

Here is a preview of tech solutions (which already exist) that are likely to create a new set of problems and challenges for us in the future.

Replica is a company whose goal is to replicate celebrity voices. They see this as enabling creative applications of their voices without the commitment of the celebrity - of course the owner of the voice that's being replicated would control when/where it could be used.

Here's a video introducing Replica. 

 

 

Combine that ability to simulate voices with deepfake technology (which can alter video in many ways, including to look like the mouth in the video is is saying the words that were simulated) and the potential for confusion or deception skyrockets. 

Here is an example.

 

 

My guess is that you will hear a lot more about this soon because of upcoming elections.  It will also become increasingly relevant in everyday life, business, trading, and legal situations.

A picture used to be worth a thousand words, but this may change that equation forever.

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

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

 

Lighter Links:

• These are the Top 10 Emerging Technologies of 2019.(WEForum)
• Inside an Amazon Warehouse, Robots' Ways Rub off on Humans. (New York Times)
• Beetles and Flies are Becoming Part of the Agricultural Food Chain. (Economist)
• China and the World: inside the Dynamics of a Changing Relationship. (McKinsey)
• How Many of the "Top 100 Books of All Time" Have You Actually Read? (BuzzFeed)

 

 

Trading Links:

• So How's the Economy Really Doing?: Theme of the Week. (Bloomberg)
• Jony Ive's Shock Departure from Apple: What Does It Really Mean? (Forbes)
• The End of FinTech. (TheFinanser)
• Is a Netflix Subscription Model the Future of Financial Services? (TheFinancialBrand)
• A Looming Disconnect between the Economy and Financial Markets. (SeekingAlpha)

 

 

 

If The Internet Goes Down Does The World Crumble?

On Tuesday, for less than an hour, early in the workday, it felt like the internet was down for many.  The cause? Cloudflare went down. Cloudflare offers web services to over 16 million websites. That includes sites like HubSpot, Medium, UpWork, 9gag, Discord, Sirius XM, Shopify, Coinbase, Canva, Soundcloud, Buzzfeed, and Capitalogix.

Even down detector was down. 

 

That means when Cloudflare went down, so did a non-trivial portion of the internet. W3techs reports approximately 10% of the internet was affected by Cloudflare being down. 

What happened?

via DigitalAttackMap

There was a massive spike in CPU utilization. At the time, it looked like a DDOS attack. People were speculating that it was a Chinese attack trying to mess with the Hong Kong protests. 

Turns out, it was bad code - specifically, a single misconfigured rule within their firewall services. They did a global rollout of the code, and so it affected everyone. 

This shows the importance of staged rollouts - testing your releases live with test groups before being released globally. 

Here's a great write-up from Andy Ellis on preventative measures in the future.  

The reality is, using a CDN is still helpful, Cloudflare's downtime doesn't mean you shouldn't use them.

It does mean we should be thinking about what failsafes are needed to keep the internet infrastructure working in the event of attacks or failures. 

Attacks are becoming more common, and as we now expect constant improvements/releases to software, we can expect more company errors as well. Facebook had similar issues on Wednesday.

Think of how much relies on the internet as a backbone. It's crazy to think about the impact sustained downtime would have; billions of dollars in business not happening, banking systems down, etc.  Realistically, if the entire internet goes down we likely have bigger issues to worry about, but this event shows that large swaths of the internet could be affected at once. 

Would a decentralized network help? Are smart contracts necessary for that? Is there a CDN for CDNs?

It feels like we often end up with more questions than answers.

It is why many companies opt for a hybrid cloud with plenty of on-premise compute.

What do you think?

Here Are Some Links For Your Weekly Reading - June 30th, 2019

Most people don't spend money on freemium games. These games rely on a small subset of "whales" to survive - players that spend absurd amounts of money on their games. Gacha games let players pay to "roll the dice" to unlock rare characters and collectibles similar to a "Loot Box" mechanic. 

Now, the US is trying to make this mechanic illegal for taking advantage of children with their "pay-to-win" mechanics. 

 

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

 

Lighter Links:

• Roger Goodell Net Worth and Salary History. (CNW)
• The Dark Forest Theory of the Internet. (OneZero)
• See the World's Oldest Trees by Starlight. (NationalGeographic)
• The Beauty and Madness of Sending a Man to the Moon. (Wired)
• Teams Autonomously Mapping the Depths Take Home Millions From The Ocean Discovery XPRIZE. (TechCrunch)

 

Trading Links:

• Business Conditions are at Their Worst Level Since the 2008 Financial Crisis. (MorganStanley)
• California Today: Would You Pay $195 to Take a Helicopter to Work? (NYT)
• What Yogi Berra Would Have Said about this Bull Market. (WSJ)
• Economies and Stockmarkets Do Not Always Match up Well.(Economist)
• How Politics Became the Main Driver of Financial Markets – And Why Investors Better Get Used To It. (MarketWatch)

Here Are Some Links For Your Weekly Reading - June 23rd, 2019

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

 

Lighter Links:

• DeepMind's AI Has Used Teamwork to Beat Humans at a First-person Shooter. (TechReview)
• Physicists Discover Surprisingly Complex States Emerging out of Simple Synchronized Networks. (Phys)
• Amazon Prime Air Delivery Drone to Start Dropping Packages 'Within Months,' Officials Say. (USAToday)
• 136 Maps Reveal Where Tourists & Locals Take Photos in Major Cities across the Globe. (OpenCulture)
• A Subway Map of Human Anatomy: All the Systems of Our Body Visualized in the Style of the London Underground. (OpenCulture)

 

Trading Links:

• Microsoft is Now Worth over $1 Trillion, a Stunning Run since Satya Nadella's Ascent. (Quartz)
• These are the 10 Best-performing Stocks of this Century. (BusinessInsider)
• What is Currency? (Visual)
• Michael Jordan's Net Worth is Now Officially $1.9 Billion. (CNW)
• NASA Opens Space Station to Tourists and Businesses to Promote Commercial Activities. (Wall Street Journal)

Camp Kotok: Economists In Nature

I was just in Maine at Camp Kotok, a private gathering of economists, fund managers, and other financial industry professionals. 

 

 

There was no cell phone service ... so people had to talk with each other.  Everyone went outside.  And, people continued to fish, even when it rained.  Craziness.

At last year's Camp Kotok, I did this interview with Bob Eisenbeis,  Cumberland Advisors' Vice Chairman & Chief Monetary Economist.  Check it out. 

 

Cumberland Advisors via YouTube

AI is removing the fear, greed, and discretionary mistakes from financial decision making. We’re at the beginning of a cycle of progress that is hard to imagine ... and easy to underestimate.

Ultimately, I think AI will transform the planet much like electricity did.  What about you?

Lots of cool discussions up there. Call me if you want to talk about it. 

Committing To A Bigger Future

I'm a big fan of picking a Big Hairy Audacious Goal (sometimes called a "BHAG") and taking actions that move you in that direction. 

I'm also a big fan of Strategic Coach's Bigger Future exercise.  It is a 20-year planning exercise where you plan out your commitments and goals to yourself, your family, your career, and your legacy. 

While doing this, I realized that my ideal next 20 years involves taking Capitalogix to the next level (and beyond). 

As a result, I recently held a two-hour town hall session with everybody in Capitalogix.  You'll find a 5-minute compilation of highlights at the end of this article. 

Before I share with you, I want to take time to bring you up to speed on Capitalogix's history. Some may know the story, but many of you are new.  It's important context for the video and for Capitalogix's future. 

A Brief History of Capitalogix

Times and conditions change so rapidly that we must keep our aim constantly focused on the future. - Walt Disney

In the 90's, I left a corporate securities law practice to start a company that was an early pioneer in automation, intelligent agents, and rule-based processing.(it is almost embarrassing to compare that to AI today).  Nonetheless, we ended up on the Inc. 500 list, won lots of awards and had a great time.  Little did I know how important that would be to what we are doing now.

Life intervened ... and 1999 was a rough year for me.  My dad died of cancer, I got divorced, and I sold my company. That year inspired my TED Talk on the Time Value of A Life Worth Living, and has inspired the past 20 years of my life. 

I threw myself into trading. At first, I was a fundamental trader.  But I quickly threw myself into Elliott Wave theory, technical analysis, quantitative analysis, and everything else I could get my hands on. I spent hours on end marking up charts and creating early algorithmic trading systems - predecessors to how we trade today. 

I also hired my first two employees - Gabriel and Sean. My dining room became their office. I started to view trading as a business, rather than a hobby. The thought forms that would become our framework for understanding markets were starting to gel. 

 

 

By 2015, we had 20+ employees working out of my house, and I realized we'd outgrown my home. Here is a picture from the dining room before the move.

 

 

After a brief time with employees in three different offices (including one of our partner's offices) we found our current office. 

Moving in to our new office represented a positive shift in culture and focus - and another step toward our goals. 

 

Where We Are Today

The power for creating a better future is contained in the present moment: You create a good future by creating a good present. - Eckhart Tolle

We are committed to revolutionizing decision science (making better decisions faster). We're creating the future we've envisioned.

Yet, for all we've accomplished, we're driven every day to be better than we were yesterday. That drive comes from that big hairy audacious goal and that 20-year vision.

It comes from knowing who we want to be tomorrow. 

 

 

Committing To The Future

 

It means that we're going to have to have new people and new ways of doing things because the recipe for getting here isn't the recipe for getting there. As much as I respect and love you for "here." I respect and love you enough to hold you accountable for "there." - Howard Getson

 

It hasn't always been easy - but building Capitalogix has been an intensely rewarding passion.

Over the next 20 years, there are a ton of people I want to impact and a lot of goals I want to accomplish. Capitalogix is the way I intend to do that.

I look forward to you all being a part of it as well. 

Onwards!

Visualizing The AI Revolution

I'm surprised how often I see people who are bearish on Artificial Intelligence. Many are stuck in science fiction's depictions - sentience, personification, etc.. Modern AI is very different from science fiction predictions, but is still exciting. (Here's an infographic debunking 8 common AI myths)

Modern AI does many things and has many applications, but ultimately it's relatively faceless. It works in the background, impacts everything it touches, and silently collects vast lakes of data. AI may not be Star Trek's "Data," but it is transforming our economy at warp speed. 

TechJury has put together an infographic on the history of AI until today. It highlights a number of key inflection points, AI's impact on today's economy, and which countries and companies are leading the pack. 

via TechJury (Click To See Full Infographic)

AI By The Numbers (Taken From TechJury)

• By 2025, the global AI market is expected to be almost $60 billion; in 2016 it was $1.4 billion
• The number of AI startups has grown 14x since 2000
• Investment in AI startups has grown 6x since 2000
• 77% of the devices we use feature one form of AI or another
• 84% of global businesses see AI as a competitive advantage
• Google analysts believe that next year robots will be smart enough to mimic complex human behavior like jokes and flirting

 

To me, it's clear that AI is the major driving force of tomorrow. AI continues to perform increasingly impressive tasks. Last week, I saw an AI that can make realistic video renderings from one picture, and Google's DeepMind beat humans in a multiplayer shooting game, operating on a single metric. 

If you're as excited about the potential for AI as I am, here are some articles I wrote that you may have missed:

• AI in Film: A Retrospective
• Which Industries Are Prime For Disruption?
• Will I Survive The AI Revolution?
• Creating An Artificial Intelligence Methodology
• How To Thrive After The AI Revolution

Here Are Some Links For Your Weekly Reading - June 9th, 2019

Tuesday was the 30th anniversary of the Tiananmen Square Protests. Here's a video of Chinese college students being asked about the event. It is a pretty interesting look at censorship and fear of government consequences for lack of free speech. 

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

 

Lighter Links:

• China's Big AI Advantage: Humans. (News)
• The Natural Genius of Ants is Helping Us Build Better Algorithms. (Wired)
• 5 Myths about Strategy. (HBR)
• Percentage of Americans Who Never Traveled beyond the State Where They Were Born? A Surprise? (Forbes)
• At Disneyland's New Star Wars' Attraction – Brace Yourself for $200 Lightsabers, $42 Cocktails and 4 A.M. Lines. (MarketWatch)

 

Trading Links:

• Billionaire Mike Bloomberg Tells Harvard Graduates that Money Isn't Important. (TheLadders)
• The Radical Plan to Change How Harvard Teaches Economics. (Vox)
• Apple Patents the Foldable iPhone Display; Here's What It Looks Like. (ValueWalk)
• Quantum Computing Will Change the Digital World beyond Recognition. (Metro)
• Atlanta Fed President Bostic Does Not See a Rate Cut this Year like the Market is Telegraphing. (CNBC)

 

The Rise of the Megacity

Population growth is an interesting measure. Historically, growth has been slow.  But something changed that.  And the implications are stunning.

Scientists estimate that humans have existed for over 130,000 years. It took until 1804 for us to reach 1 Billion. We doubled that population by 1927 (123 years later), and then doubled it again in only 47 years later (which was 1974). 

Early population growth was driven by the agricultural revolution. Since 1804, the industrial revolution, health and safety advances, and technology have radically improved quality of life - spurring comparatively rapid growth. 

via Axios (Click for an Interactive Graph)

World population growth rates peaked in the late 1960s and have declined sharply in the past four decades, but we're still on a positive trend. We're expected to reach 9 billion people by 2050, but a lot of that growth comes from developing countries - they also almost exclusively come from urban areas. 

Urbanization: Megacities

Since 2014, over 50% of the world's population has lived in urban areas - today it's approximately 55%. That number is growing.

Ironically, as we grow more digitally connected, our world is shrinking and our populations are concentrating. 

An interesting consequence of this rapid urbanization and population growth in developing countries has been the increased development of Megacities - defined as cities with populations greater than 10 million. Today, there are 33 megacities - more than triple the number in the 1990s. 

This creates a set of interesting opportunities and challenges. 

For example, how will these cities deal with infrastructure - sanitation, transportation, etc.

 

via Blackrock (Click to view full infographic)