Last week, I talked about the potential for room-temperature superconductors.
In that discussion, I noted that we are now in the 4th Industrial Revolution, in part because of better and more connected chips (semiconductors).
I want to dive back into Industrial Revolutions because we're at an inflection point in AI and chips.
A Look at Industrial Revolutions
The Industrial Revolution has two phases: one material, the other social; one concerning the making of things, the other concerning the making of men. - Charles A. Beard
There are several turning points in our history where the world changed forever. Former paradigms and realities became relics of a bygone era.
Tomorrow's workforce will require different skills and face different challenges than we do today. You can consider this the Fourth Industrial Revolution. Compare today's changes to our previous industrial revolutions.
- First industrial revolution - Discovery of the steam engine and creation of factories
- Second industrial revolution - Introduction of the assembly line and mass production
- Third industrial revolution - The world wide web and computers connect the world, enabling the digital age.
Each revolution shared multiple similarities. They were disruptive. They were centered on technological innovation. They created concatenating socio-cultural impacts.
Since most of us remember the third revolution, let's spend some time on that.
Here's a map of the entire "internet" in 1973.
Reddit via @WorkerGnome.
Most of us didn't use the internet at this point, but you probably remember Web1 (static HTML pages, a 5-minute download to view a 3Mb picture, and of course ... waiting for a website to load over the dialup connection before you could read it). It was still amazing!
Then, Web 2.0 came, and so did everything we now associate with the internet; Facebook, YouTube, ubiquitous porn sites, and Google. But, with Web 2.0 also came user tracking and advertising, which meant that we became the "product." Remember, you're not the customers of those platforms - advertisers are. And if you're not the customer, you're the product. And when you're not the customer, there's no reason for the platforms not to censor what you see, hear, or experience to control the narrative.
Now we're seeing a focus on the Blockchain, and its reliant technologies, with Web3.
Where we are and where we are going
I believe that, if managed well, the Fourth Industrial Revolution can bring a new cultural renaissance, which will make us feel part of something much larger than ourselves: a true global civilization. I believe the changes that will sweep through society can provide a more inclusive, sustainable and harmonious society. But it will not come easily. – Klaus Schwab
With Web3, A.I., better chips, and more, we're at the apex of another inflection point. As a result, the game is changing, as are the rules, the players, and what it means to win.
At significant transition points, it is easy to see fear, resistance, and a push to keep things the same. Yet, time marches on. Much of the pain felt during these transitions occurs because people hesitate to adapt. As a result, the wave crashes on them instead of them riding it to safety.
Robots can do many things, but they've yet to match humanity's creativity and emotional insight. As automation spreads to more jobs, the need for management, creativity, and decision-making won't go anywhere … data and analytics might augment them, but they won't disappear.
Our uniqueness and flexibility rightly protect our usefulness. AI and automation free us up to be our best selves and to explore new possibilities.
All of these changes bring about a decentralization of power - and a new set of freedoms for people – including the ability to discover and adopt capabilities in less time and with less effort. But, to bring it back to my skepticism again, there are a lot of roadblocks, interferences, and time between now and the consumer being in control again.
We can shorten that distance, though. This reminds me of a quote by Elon Musk:
Stop being patient and start asking yourself, how do I accomplish my 10 year plan in 6 months? You will probably fail but you will be a lot further ahead than the person who simply accepted it was going to take 10 years."
One of an entrepreneur's most powerful capabilities is the ability to shorten time - and get more done than others thought possible.
Onwards!
"Is The Stock Market Going To Crash?!"
I usually don't concern myself with looking at stock charts anymore, but I still like paying attention to what people say about them ...
Recently, I saw this image posted.
via r/StockMarket
So, will the market attract buyers … or sellers?
Personally, I expect volatility.
Why?
Because markets exist to trade, and it tends to generate those trades by 'shaking' the weak holders.
A big move up here will trigger a lot of buying (and short-covering by weak bears).
While a big move down will trigger a lot of selling (as Bulls fear the long-anticipated next leg down).
I also recognize that we're entering an election year. So there's still time for a correction before a sustained rally.
Here's the problem. Even though I still enjoy the mental exercise of going through these scenarios, I recognize how little value they add.
You can look at any point in history and find articles and charts that tell you the world is ending, or that the fear is overblown and we're going to get to the other side, and there's a pot of gold waiting for you.
It's easy to use charts to explain what happened. It is a lot harder to use charts to predict what is about to happen.
I still keep my ear to the ground because I like having a feeling for the sentiment around both experienced investors and your average Joe. Conventional trading wisdom says that crowds are usually wrong at turning points. That doesn't mean they are always wrong (still, it makes sense to notice when Smart Money clearly disagrees).
Knowing these things doesn't make any difference in the decisions I make about trading ... because I let the computer make those decisions. Nonetheless, it makes me feel better.
So, is the stock market going to crash? Who knows? Anyone that pretends they know is full of it. There are too many factors at play to decide whether the market is going to crash.
From my perspective, it doesn't make sense to try to predict something random.
On the other hand, if you don't know what your edge is ... you don't have one.
Algorithmic trading is about creating more ways to win.
To be effective, algorithmic trading is about switching from lower expectancy positions to higher expectancy positions.
In general, here is how that works.
Understand that you can make trading decisions based on market patterns, trends, sentiment, statistics, behavioral economics, game theory, reversion to the mean, or countless other methods. Further, realize that no technique works all the time ... but there is always a technique that works (even if that means getting out of the market).
There is an advantage in tracking each of these to gain a perspective of perspectives (in order to identify an advantage or opportunity in real-time as it happens). For example, you could measure and calculate a blend of your confidence in an algorithm or technique and how it is performing. This creates the opportunity to switch into and out of various techniques and markets as things change.
Having an edge in trading often comes down to information asymmetry. This means knowing more, faster, better, or different things than what others are using to make decisions.
Hope that helps.
Posted at 03:37 PM in Business, Current Affairs, Ideas, Market Commentary, Science, Trading, Trading Tools | Permalink | Comments (0)
Reblog (0)