Superstition ain’t the way… Or is it?

Technology, social networks, and big data undoubtedly help portfolio managers to create new asset allocation strategies and techniques. You have probably already heard of using social media sentiment analysis to support asset allocation choices. The best known example has been the Derwent Capital Markets’ Absolute Return fund aka the “Twitter fund”, a hedge fund using Twitter for investment direction (by the way, the fund has been liquidated: read about it here).

But reading of a Superstitious Fund Project really blew me away:

The Superstitious Fund Project is a live one year experiment where an uncanny algorithm or SUPERSTITIOUS AUTOMATED ROBOT will trade live on the stock market. The financial instruments it will be using will be spreadbetting on the FTSE 100. The superstitious trading algorithm will trade purely on the belief of NUMEROLOGY and in accordance to the MOON. It will for example have the fear of the number 13, as well as generating its own beliefs and new logic for trading.

The Fund is a one year experiment. The algorithm behind the fully automated robot creates patterns based purely on superstitious beliefs throughout the year, ranking and deranking superstitions. They are then used as a new logic in trading.

As a one year experiment, £4828.88 was invested from participants over 50 cities around the world. After one year, the balance will be returned at either a profit or a loss.

In my opinion, the experiment is useful to highlight two contrasts: the growing (and potentially dangerous: remember the Flash Crash?) intrusiveness of algorithms and trading systems in asset management, and the increasingly irrational behavior of managers and investors in spite of the enormous amount of data and research available today.

For more info on the experiment, check the official website and Twitter account.

Advertisements

Google Plus… Plus What?

Google has announced its earnings for Q3 2011. Impressive numbers, as always: two-digit percentage growth almost everywhere, and a pile of more than 45$B in cash. Everything comes off of search revenue.
The same good ol’ story.

Everyone was expecting a few more insights on the Android business and on the Googlerola affair. Nope. Not a single word.

However, they did confirm that Google+ has over 40 million users. And a lot of surprises still to show. Larry Page has outlined the significant effect he foresees Google+ will have on the company’s business.

Our ultimate ambition is to transform the overall Google experience — making it beautifully simple, almost automagical, because we understand what you want and can deliver it instantly.

This means baking identity and sharing into all of our products so that we build a real relationship with our users. Sharing on the web will be like sharing in real life across all your stuff. You’ll have better, more relevant search results and ads. [ed.: see a previous post on the possible implications of Google’s +1]

Of course, now comes the hard part: developing Google+ in a manner that leads it to attain a critical mass of users and makes it a real contender to Facebook.

On this side, IMHO, success is far from certain:

  1. Google+ Has 40 Million Users, But How Many Use It?
  2. Google+ will never beat Zuckerberg on his own turf. There are plenty of reasons, all well summarized in this article on Gizmodo
  3. Data analytics company Chitika recently published results of a study that revealed that Google+ traffic has deflated, following a spike after the social networking service came out of a limited beta on Sept. 20, and fallen back to the usage level it had before becoming publicly available
  4. It also looks like there are some Googlers not sharing the optimism of their CEO. A couple of days ago, a Google engineer named Steve Yegge mistakenly published publicly a post in which he leveled some sharp criticism at Google+, calling it “a knee-jerk reaction, a study in short-term thinking” in large part because it lacks a strong developer platform.
  5. Until now, the approach of Google to social networks has been, to say the least, controversial. Orkut is used in Brazil only (but Facebook is growing at a light-speed pace), and they have just decided to shut down Buzz.

So, how is Google going to conquer the world with Google+? Is the Big G really going to put Google+ at the center of its existence and rebuild its other products around it? It’s sounds radical, but that’s precisely what Google seems to be willing to do. Page said

We shipped the ‘Plus’, and now we’re going to ship the Google part.

Recommendations are key tools in marketing, and +1 and Google Plus could really become the automated version of word of mouth that is supposed to sit atop search engines. Nonetheless, it’s a gamble to build your core business on a social network that’s a few months old and only has 40 million users. But it will be fascinating to see Google strive to make Google+ the formidable pivot of the ecosystem that Page envisions.

Meanwhile, sit down and relax: we still have to see what the outcomes of Facebook’s “curated search” patent will be…

Oddjob

Odd Job(s)

A young boy collecting funds for karate lessons

Have you read my previous post on the US Postal Service problem aka How to cope with human work replaced by technology? Unless an external source of funding comes in, the USPS will have to scale back its operations drastically, or simply shut down altogether. That’s 600,000 people who would be out of work, and another 480,000 pensioners facing an adjustment in terms. Huge numbers. And these issues are going to multiply as many human jobs/tasks will become obsolete due to technology shifts.

Douglas Rushkoff, a media theorist, in a special to CNN says that it’s not about jobs, it’s about productivity models. In other words, it is not a matter of demand and supply of jobs: actually, employment is abundant but we need

a way of fairly distributing the bounty we have generated through our technologies, and a way of creating meaning in a world that has already produced far too much stuff.

Can we organize the society around something other than employment? That is, can we find a third way NOT in the middle between communism and libertarianism in order to shift

the spirit of enterprise we currently associate with “career” to something entirely more collaborative, purposeful, and even meaningful?

Think about social networks. No, I don’t mean logging to Facebook to brag your last caribbean trip. I mean, networks of people who shares ideas, culture, know-how, time. In a single word, work. Not ego-boosting.

We have this idea that we put all this stuff out there and what we get back are intangible or abstract benefits of reputation. But why could not this be monetized?

Why can’t there be a universal marketplace where people could buy and sell bytes from each other, where information would be paid for? It would be much greater than the sum of parts: a future where people could make a living and earn money from what they did with their hearts and heads in an information system, the Internet.

Is the Information Age really replacing Industrial Age?

It seems so, but, IMHO, none of the so-called Internet giants is genuinely addressing this paradigm shift. Consequently, the question is not only “when”, but “how”.

Any hints? 💡

New Google +1

Is Google’s +1 the new PageRank?

PageRank LogoPageRank is a patent owned by Stanford University and will expire in 2017 (more info here). Google hold a one time paid license of this patent and in 2003, the exclusivity license was extended till 2011. After that period, Google’s exclusivity on PageRank will expire and license will become non-exclusive. What does that mean?

Sure, regarding the exclusivity period, as they did in 2003, they can renew that license again in 2011 and own the exclusive rights for this technology. But think about this: what about a page ranking based not (only) on an algorithm, but on explicit indications made by users? And what if this users were people that you know and trust becuse already added to your “circle of friends” on Google+ or other social networks?

Google +1 ButtonYesterday, Google launched his +1 Button extension for Chrome browser. Using it, you no longer have to rely on a site to implement the +1 Button: you can invoke the functionality through your browser.

Imagine if Facebook made their own browser and offered an extension to “Like” any page on the web through it — same idea (BTW, they will do it, sooner or later…).

As also TechCrunch notices:

Right now, the +1 Button just shares content you like on the web. But eventually, the plan is to look at this data as a way to affect Google Search itself potentially. That’s huge. The button also is starting to play a role in how Google serves up advertising to you.

Last but not least, here is what Google states in the +1 app description:

In addition to the practices described in the Google +1 Button Privacy Policy, by installing this extension, all of the pages and URLs you visit will be sent to Google in order to retrieve +1 information.

They are an advertising company. Draw your more appropriate conclusions… 😎

I Watch You Back

Human TVSoon­­­, the websites you visit while watching TV could adapt in real time to the shows being watched — automatically presenting information relevant to the show, or even tuning their ads in response to what’s on screen.

Flingo, which developed the technology, known as Sync Apps, says the new set is already being mass-produced by one of the top five television brands in the U.S. and will retail for less than $500.

A new type of Internet-connected television, due out before the end of the year, has built-in software and hardware that send data about what is on-screen to an Internet server that can identify the content. Web pages being viewed using the same Internet connection as the TV set can then tap into that information. The system can identify any content onscreen, whatever the source, whether live TV, DVDs or movie files playing from a computer.

Ashwin Navin, Flingo’s CEO, says he expects people to opt in because the service offers an automatic way to do what people are already doing manually.

Source and original article: Technology Review

Bye Bye Post Office

Remember one of the most retweeted chart of 2010? It was ripped off the Morgan Stanley’s Internet Trends presentation, and showed how social networking messaging systems have already surpassed email usage:

Chart from MS Internet Trends 2010 presentation

Whether it’s Twitter, Facebook, or some other social networking service, I believe the lighter weight communication paradigm (say less, reach more) is superior to email for many things. Nonetheless, email’s usage is still growing and IMHO is more suitable for long-form serious private conversations.

You may think that this trend is affecting only the way we send and receive messages on the web. What about the old, tangible, bunch of papers we find in our real mailbox? The Economist has a nice article depicting the volume of mail handled by the US Postal Office:

USPS - Letters no more

As ever more Americans go online instead of sending paper, the volume of mail has been plummeting […] Delivery costs are simultaneously going up. As a result, the post has lost $20 billion in the last four years and expects to lose another $8 billion this fiscal year […] As Christmas cards have gone online (and “green”), so have bills. In 2000, 5% of Americans paid utilities online. Last year 55% did.

USPS is planning to close post offices; up to 3,653, out of about 32,000. This month it announced plans to lay off another 120,000 workers by 2015, having already bidden adieu to some 110,000 over the past four years (for a total of about 560,000 now). It also wants to fiddle with its workers’ pensions and health care.

The post will have to stop delivering mail on Saturdays. Then perhaps on other days too.

USPS was born “to bind the Nation together”. Now it looks like there is a substitute: Internet.