Capitalogix

Swarm Intelligence: The Power of Ants in Hurricane Harvey

Houston, Texas is currently recovering from Hurricane Harvey (which dropped an average of 30 inches of rain, and up to 51.88 inches in Cedar Bayou). 

To put it in perspective, if they weren't evacuating, residents were told to write their name and social security numbers in sharpie on their arms. 

Nature is the great equalizer, and in a disaster like this you the fight is for survival and escape ... and not just by humans. 

Check out this "raft" of ants banding together to survive the storm.

 

NBCNews via Youtube

An ant is pretty cool. It can lift more than 50 times its weight and handle pressures up to 5000 times its weight. 

But, what makes ants interesting is what they do when there's a colony (or swarm) of them. 

An ant can only be "so" smart - their heads are tiny - but a colony of ants is a superorganism whose collective intelligence is much greater than the sum of its parts. 

Ants release pheromones from glands all over their bodies that can tell their colony an array of things. It can tell them how many ants they need to accomplish a task, it can tell them where there's food or danger, and it can even be used to relocate their whole colony to a new geography.

Clearly, it can also be used to communicate that the best way to survive danger is to create a mass of each other and allow the most possible to survive ... there's no fear or greed, only what's best for the colony. 

In a very real sense, this is where technology and trading are starting to move.  I say starting, but swarm intelligence has been an area of research in technology since the late 80's.

There are many simple applications of swarm intelligence in creating CGI crowds, telecommunication networks and more, but technological advances are drastically increasing the power and uses of swarms. 

Using the communication of various systems in order to gain real-time data from their actions and interactions will create hidden opportunities that we couldn't capitalize on previously.

We're in a golden age of innovation ... How cool is that?

 

 

Arousal States: Biofeedback and the Story You Tell Yourself [Part 3]

In the first part of this exercise series, I talked about mindset and action.

In Part 2, I talked about normalizing your habits and picking consistent, normalized metrics. This doesn't just work at the gym; it applies to life and business as well. 

Today, I want to explain how and why this helps. To do so, we will talk about controlling your arousal states. 

Watch the video, it is only 90 seconds.

 

 

Chemically, most arousal states are the same.  Meaning, the same hormones and neurotransmitters that make you feel fear also can make you feel excited.  They affect your heart rate, respiration, etc.  ... Though, the outside stimuli you experience likely determines how you interpret what is happening.  

In most situations, a heart rate of 170 beats per minute is an indicator of extreme danger (or an impending toe-tag).  If I felt my heart racing like that in a meeting, it might trigger a fight or flight instinct.  I prefer conscious and controlled responses.  So, I train myself to recognize what I can control and to respond accordingly.

One way I do that is by being mindful of heart rate zones during exercise.  

My goal is to get as close to 170 bpm as I can, then stay in that peak zone for as long as possible.

Here is a chart showing a Fitbit readout of a recent exercise session.

 

As you can see, every time I reach my limit ... I get my heart rate back down.  It becomes a conscious and controlled learned behavior.

It's a form of biofeedback; it's not only gotten me better at controlling what happens after my heartrate reaches 170 but at identifying when I'm close even without a monitor. 

Now, when my heart rate is at 170 bpm(regardless of the situation), I don't feel anxious ... I think about what I want to do. 

This is a very useful tool.

It's the same with trading ... Does a loss or error harsh your mellow – or is it a trigger to do what you are supposed to do.  

Getting used to normalized risk creates opportunity.  

When you are comfortable operating at a pace, or in an environment, that others find difficult – you have a profound advantage and edge.

Here Are Some Links For Your Weekly Reading - August 20th, 2017

Change is the only constant.

 

  

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

 

Lighter Links:

• AI Beats the World's Best Gamers after Just Two Weeks of Learning. (NewAtlas)
• Russia-linked Hackers Targeted Hotel Guests across Europe: Security Firm. (Reuters)
• One Year after Rio: What's Left behind after the Flame Goes Out. (ESPN)
• Humans and Robots are on the Cusp of a Sexual Intimacy We May Never Reverse. (Quartz)
• Elon Musk Just Shared His 4-Step Plan for Mars - Colonists Should Be "Prepared to Die". (ScienceAlert)

 

Trading Links:

• Ray Dalio Urges Investors to Hedge Against Possible North Korea War. (FN)
• There Has Never, Ever, Been this Many Trades Betting on VIX. (ZH)
• Amazon Could Start Selling Event Tickets in the U.S. (TechCrunch)
• South Korea Introduces World's First Robot Tax. (ZeroHedge)
• The Number of Cash Payments Dipped 11 Per Cent Last Year - But It's Still the Most Used Payment Method. (CityAM)

Rubik's Cubes ... More than just a game.

One of my unique abilities is pattern matching.

Even if I'm not an expert in a field, based on context and patterns, I quickly see the big picture – and recognize the bottlenecks and leverage points that impact transformative results.

Perhaps that's why Rubik's Cubes fascinate me. 

A scrambled cube presents an insurmountable challenge to newbies.  It almost seems that there are infinite possibilities ... and most lead towards chaos and failure. In reality, a Rubik's cube is pretty easy to solve if you understand a few simple algorithms (and match the positions of a couple key blocks in relation to the decisions you need to make next). 

As more people learn to solve standard cubes, the game evolves.  There is new generation of "Cubers" that attempt to find new creative situations to add difficulty, solve it faster than the next person, or try crazy variations of the cube that barely resembles the original. 

 

If you're trying to learn how to solve a basic cube, here's a great resource. 

After you've learned the basic patterns, and solved a few puzzles,  you can up the ante.

Here are some examples of bigger cubes with more variables and different shapes.

 

via hananujiya

Ultimately, it is that base pattern recognition and simple solving skills (applied in the right order) that sets the stage.

It doesn't matter where you start.  As long as you continue to make progress, the result is inevitable.

Who Can You Trust? Ranking Your News Sources

Fake news this ... phony sources that ...

It is harder than ever to know what to trust.

"Noise Reduction" is important in this volatile geo-political climate.

The chart, below,  lists the least and most trusted news sources.

 

via RJI

As someone who reads a lot, this was interesting.

As a side note,  I was a little surprised to see the "Internet" on the list as source itself.  Darwin would be somewhat comforted to see that people don't trust everything they see on the internet. 

The following chart is a bit outdated (it's from 2014), but it's a good study with diverse leanings.  It presents the trust levels of various news sources by ideological group.   

 

via Journalism

Which of your news sources do you follow? Were they as trusted as you expected?

Another question worth asking yourself is "Am I getting an idea of what the other side is thinking?"  In trading, I always want to understand what the other side sees.

Finally, let me know if there are resources you think I should look at.  

You are either growing or dying.

Tick ... Tock ... The Doomsday Clock Is Ticking

With North Korea flexing their nuclear muscles and threatening to strike Guam, and Donald Trump threatening to unleash "Fire and Fury" in retaliation, alarm towards the possibility of military conflict becomes more prevalent.

Could there be a second Cold War? Or, is there really a chance someone pushes the button?

Regardless, it's just another green tick mark on the doomsday clock according to the "Bulletin of the Atomic Scientists" who post a yearly update to our doomsday clock (and have for 70 years). 

The Doomsday Clock is a globally-recognized model of our planet's health and safety - but who knew it was an actual thing based off of a range of factors?

Now - they want you to donate, and so there's a level of fearmongering, but they do provide some solid data on nuclear stockpiles, global temperature differences and more.

 

via The Bulletin of the Atomic Scientists

 

You can see their full article on this year's prediction here.

And if you're actually worried about North Korea - even if they now have the ability to hit the U.S., I think we need to be asking if they have a real desire to do so?

North Korea thrives off of the status quo - keeping people placated with propaganda and love for their glorious leader. 

Despite how it may seem sometimes - It's unlikely Kim Jong Un is trying to start a war with America. It just isn't smart.

But, we know that emotion is not often based on logic. 

Which brings us to the Markets.  For the first time ever, the S&P 500 Index has moved less than 0.3% for 13 consecutive days. 

Meaning, despite all the fervor in the media, and fear/elation surrounding the presidency, not much is happening.

Traders are essentially paralyzed with indecision ... a Cold War of sorts  -- or the calm before the storm?

Related articles

Trump just said the scariest thing of his presidency and this has gotten totally out of control

Report: North Korea is Seriously Considering Attacking Guam, Where 6,000 US Troops Are Stationed

Guam's residents 'unnerved' as island wakes up to North Korea's threats

Here Are Some Links For Your Weekly Reading - July 28th, 2017

Talent is great,  but you can have a lot of success without it ...

 

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

Lighter Links:

• What is an Impact Filter? (StrategicCoach)
• Morning Routines and Strategies. (Tim)
• Why Some Smart People Make Foolish Decisions. (Digest)
• How Wellness' Became an Epidemic. (TheCut)
• Trump Reportedly Asked Legal Team about His Power to Pardon Aides, Family, Even Himself. (Slate)

Trading Links:

• Apple is Once Again the Most Profitable Company'. (iPhoneHacks)
• The Trump Administration Can't Stop China from Becoming an AI Superpower. (Wired)
• AI Could Revolutionize War as Much as Nukes. (Wired)
• Era of Biological Annihilation' is Underway, Scientists Warn. (New York Times)
• Gold and Silver are down 8% and 21% over the Trailing Year. Blame Bitcoin? (Fool)

AI Isn't Just Crawling Forward ... Now It's Learning To Walk

The pace of AI progress is awe inspiring.

We are entering a golden age of innovation, disruption, and new possibilities.

Here is a small example.  It's not the first time computers have learned to walk, but Google's DeepMind taught itself to walk with no human interaction.

Here is a video.

 

 

With very little structure around their knowledge, it's interesting to see how they developed movement - and where it seems distinctly artificial. 

For a more instructional video, you can check out "Flexible Muscle-Based Locomotion for Bipedal Creatures" from 2013.  It shows the generational differences between their bots as well. 

AI is getting smarter, faster.  Soon it'll have knowledge that we don't understand. And that will still only be the beginning.

Cool stuff!

Here Are Some Links For Your Weekly Reading - July 16th, 2017

Science, Art, or "PooPoo De Toro"...

  

 

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

Lighter Links:

• Ray Kurzweil: There's a Blueprint for the Master Algorithm in Our Brains (Futurism)
• Brain-training Games Don't Really Train Brains, a New Study Suggests. (WashPost)
• Why Men Don't Live as Long as Women. (Nautilus)
• What a Hunter-Gatherer Diet Does to the Body in Just Three Days. (CNN)
• Is Philosophy Simply Harder Than Science? (TLS)

Trading Links:

• Return of the Day Traders. (Forbes)
• The Unexpected Economic Consequences of Video Games. (Vox)
• Why Elon Musk's Early Adopters Take Risks. (Forbes)
• Nvidia Heads 50 Companies that Will Change the World. (Alphr)
• This is the Future of Investing, and You Probably Can't Afford It. (BizInsider)

Paul McCulley: "The Coming War between Trump & The Fed"

I just got back from an economic summit in Wyoming where I spent some time with Paul McCulley.  He is an economist and former managing director at PIMCO.   

 

He is the guy that coined the terms "Minsky moment" and "shadow banking system". 

Recently, he put together this explanatory cartoon about the relationship between Trump & The Fed.

Truth, Humor, and a Unique Perspective ... Worth a watch.

 

 

Ultimately, he is fairly bullish ... but cautious.  He says: "After eight good years on Wall Street, it's bound to end soon.  Don't be greedy."