Chat with Quynh on trading

News sources utilized

  • Zacks
  • Motley Fools

Buy rumors and sell on news

  • rumors are not official news but signals that a news might be coming soon
  • continuous upwards movement of share price for few days means news might be announced soon
  • once news is out share price will adjust based on actual numbers

Buy on over reaction to bad news and sell on recovery

  • There is usually overreaction

The dichotomy between privacy and health

1984: Big Brother is Watching
Across multiple literature, its been stated privacy versus health will be one of the primary dichotomy societies around the world will need to juggle with as technological advances are made in the fields of artificial intelligence, communications (surveillance) and medical science (genetic research).
 
What is surprising was the rate at which the Corona pandemic catalyzed this change. In light of this, it is fascinating to observe how different societies position along the spectrum. Some societies has opted for surveillance to the maximum extend possible with current technology while others opted for its polar opposite going to the extend of staging mass protests against it use. 
 

Related readings:

  • The AI Economy, Roger Bootler
  • To Be a Machine, Mark O’Connell
  • Irrational Exuberance, Shiller, Robert J.
  • Life 3.0: Being Human in the Age of Artificial Intelligence, Max Tegmark
  • Mind Children The Future of Robot, Hans Moravec
  • The Singularity Is Near, Ray Kurzweil
  • 1984, George Orwell

Observations on our news reporting system as well as investment bank forecasting.

On the quality news reporting

Good news reporting should seeks to inform rather than sensationalize with attention grabbing headlines. Its easy to appear data driven but still be misleading if you do not use the proper frame for understanding the numbers

An example of bad news reporting
An example of bad news reporting
An example of quality news reporting

On investment bank predictions

When on the receiving end of predictions made by external parties it is important to understand the underlying agenda they are trying to achieve. When examined thoroughly, predictions made by investment banks are so bad and contradictory, they should just stop making public declarations.

However if taking into account their objective is not to inform but to incite a trading decision by their clients so as to make a commission or offload losing positions on their trading books, it makes perfect sense.

Related references

The AI economy, Roger Bootle

Paradoxes

  • Polanyi Paradox
  • Moravec’s paradox

Key skill sets for the AI era

  • complex communication
  • Creativity
  • Strategic thinking / critical thinking
  • Empathy / humanity

Key themes

  • AI as labor cost versus AI as capital expenditure
  • Taxes on AI development versus edge in global competition
  • Labor versus leisure
  • Global positioning
  • Population size as advantage for big data

Federal reserve rate cuts

3rd March 2020

  • reduce interest rates from 1.5-1.75% to 1-1.25%
  • purchase of government bonds
  • purchase of agency back mortgage securities

15th March 2020

  • reduce interest rates from 1-1.25% to 0-0.25%
  • effects are in very early stage within the US
  • First signs affected industries
    • Tourism
    • Hotel
    • Travel industry
    • otherwise not showing up in data but sentiment forecasts

Key take aways

  • mandate
    • maximum employment
    • price stability
  • Context
    • Economy propped up by US consumers
    • US unemployment is low
  • Dealing with corona issue
    • Actual impact of US economy is uncertain
    • Ultimate solution will come from health professionals
    • Broader spread of the virus is what changed hence potential risk to the economy
    • Uncertain how long the economy will take to recover
    • Health care, Fiscal and Monetary policies

Thoughts on Fake News

A stroll through the peaceful streets of Rome. In contrast, it felt like the end of the world is here if you read news about Italy recently.

The human brain is a remarkable pattern recognition engine. When given incomplete information it will conjure up the “missing” pieces to generate a coherent whole that could be comprehended. More often than not what gets generated is the worst case imaginable scenario. In a normal time and age this is a wonderful function to have running automatically in the background to keep this primate alive.

However, this automatic function becomes problematic as three trends converge.

Trend 1 – big tech like Google and Facebook consolidated advertising revenue putting news entity under increasingly pressure to sustain themselves as their advertising revenue dwindled

Trend 2 – the proliferation of publication medium means anyone can now claim to be a news entity.

Trend 3 – Proliferation of Growth hacking techniques perfected by tech companies like Facebook that hijacks the human brain’s automatic fight or flight to generate user action that gets converted to revenue.

News entity generate revenue with hyper inflated news that drives readership and vitality by tapping into fear and anger. This drives wide spread panic. Corona  is perfect catalyst.

Corona Virus versus SARS virus

2002 SARS outbreak

  • Fatality rate of SARS virus is 9.6%
    • Total infected: 8,098
    • Total deaths: 774
  • SPY from start to lowest is a drop of 11.28%
  • SPY ended SARS period 8.5% higher than starting period

2020 Corona Virus outbreak

  • Fatality rate of Corona virus: 3%
    • Total infected: 2900
    • Total deaths: 81
  • SPY from peak to latest dip: 2.02%

Ebola outbreak

  • Fatality rate of Ebola virus: 50%
    • Total infected: 28,646
    • Total deaths: 11,323

Related references

Microsoft university penetration strategy

Tools of the trade

  • content marketing like documentation and tutorials on how to use tools
  • Speaking at events as first point of contact for lecturers and TAs
  • Sponsorship through hackathons
  • direct outreach to educational TAs
  • support for student mentorship programs

Acquisition

  • Reach to TAs to try out tools for free
  • Setup booths at hackathons and conducting workshops
  • Train student on the use of MS tools so that they can become successful mentors – GitHub strategy
  • Provide budget for student groups who want to organize learning sessions involving how to use the tools

Feedback mechanism /

  • track the conversion rate of documentations visit to corresponding sign up levels
  • track time on documentation
  • listen for feedbacks when interacting with students during hackathons to figure out portions of the documentation that are confusing

Metrics

  • track YoY student traffic usage during lull periods to determine if baseline is improving.

Bloomberg is a laggard for trend reporting

It’s been observed there is an average time lag of around one to three months before obvious trends observed to insider becomes apparent to mainstream media.

Examples

New Blow to Hedge Funds as Software Darlings Start to Crumble
https://www.bloomberg.com/news/articles/2019-10-19/fresh-blow-to-hedge-funds-as-software-darlings-start-to-crumble

 

https://www.bloomberg.com/amp/news/articles/2019-08-07/home-prices-decline-in-some-of-the-costliest-markets-in-the-u-s

 

https://www.bloomberg.com/news/articles/2018-01-24/san-francisco-s-sky-high-office-rents-to-slip-as-building-peaks