Monday, June 19, 2017

Predictions on the Stock Market

A simple prediction about the US stock market - I am anticipating a crash in US equities especially those in the tech sector.  There are several underlying causes of a large concentration of investments in what are referred to as the FANG stocks (Facebook, Amazon, Netflix, Google).. in fact, the sector is responsible for a whopping 40% of the S&P's gains year to date.

As a consequence of this concentration, tech stocks, and this includes the semi-conductor sector, are highly overvalued, in some cases 20 or 30 times, on par with the crash of the nineties with the dot com bubble.  Meanwhile, other sectors have fallen, including energy, into far oversold territories (based on factors such as the Relative Strength Index, Earnings Per Share, and capital return on investment caluclations).

So why is this happening?

Among many factors, the one which I believe will cause a crash is the transition from institutional investing from humans to machines. 

Increasingly, machine learning is used on the stock market, to trade at extreme high frequency, and oftentimes on private, secret exchanges known as Dark Pools.

So how do these artificially intelligent traders work?  AI traders are concerned primarily with price movement, which is a lot of ways, is in the language of the machine - calculus.

Firstly, let's define the price of a stock.  A stock's price is the sum of all investor sentiment in the value of a business. 

All that complexity, the factors the influence that sentiment and factors influencing those factors, creates a feedback hierarchy of immense complexity, where interrelated variables can have nonlinear influence on each other, making for a seemingly unpredictable movement in price, or what is commonly called the "random walk" hypothesis of price movement.

The opposite is true.  There are factors that influence the price, like the profitability of the company, or the number of media headlines it receives.  Machines can interpret this data of immense quantity with extraordinary speed, and using statistical regression methods, can identify - and appropriately incorporate correlations into its price predictions.

The price of a stock, at any given moment, can be thought of as analogous to a particle or object that has a bidirectional movement in one dimension (price), and a constant forward motion along the arrow of time, and this is important to why prices have long term dependencies, and why they possess underlying cyclical fractal shapes (self-similar repeating patterns). Betting on an up or down movement is not like flipping a coin at any moment - momentum is conserved to an extent, which causes stocks to run up or down.  Catalysts from the world can be viewed as nonlinear disturbances which can reflect that price... but on a deeper level, there is an important threshold between price and value that when not maintained, can prime the system for a correction toward greater equilibrium. Just as if you successively place pebbles onto a suspended piece of paper, eventually, the weight of the stones is too great for the paper to sustain its shape, or "morphology."  Interestingly, the most advanced of these quant funds is Renaissance Technologies, whose founder did pioneering work on the mathematics of algebraic topology.  This is important, because the machines read the price as a geometric object (a vector of price magnitude and direction) in an abstract topological space. The "paper" must achieve some morphism in under to accommodate the stress of so much "price energy" on the system.

These AI systems are not just one kind of architecture either - they are a network of varying types and fucntions of AI that cooperate to justify an action to buy or sell. These modular neural networks are very sensitive to sudden shifts in the importance of variables, because they are trained on enormous quantities of data (several terrabytes per day of training data at Renaissance).  That makes the machines extremely good at reading price by evaluating price as a time-series, and making predictions. However, chaotic events and historic shifts in technology, culture, and geopolitics are not factored by these machines, and catalysts can have more extreme effects as retail investors' react and prices move.  

Moreover, the introduction of increasingly concentrated wealth in automated trading architectures has caused what's called "overfitting" (in AI engineering terms) to a bias. Meaning that all the machines are interested at looking at the same types of variables, and combined with increasing wealth pouring into what are called Quant funds (quantitative), this overfitting has become more dramatic, pushing the momentum of stocks into a positive feedback loop - and the machines can push a price way beyond its value (or below it). 

At some point, a correction will occur, the S&P has acquired a tremendous amount of capital energy, with the Fed pouring out zero percent for the last decade and derivatives and ETFs soaring far higher than in the crash of 2008.

I predict a precipitous decline in the entire market, followed by (another) recession. During this time, the machines will be unaccustomed to a weaker, more balanced market - and will need to be re-trained. That means human-run hedgefunds may outperform the algorithms during the downturn.

I'm expecting a major catalyst, like a hack (Yahoo), or even a geopolitical event.  Even the most innocuous perturbation could cause a steep selloff by the algos, which will quickly snowball as Markets reel.  This is not an exaggeration. Algos control 70% of all institutional investing. Major institutions like Goldman Sachs, JP Morgan, Renaissance Technologies, and Blackrock are all moving to computerized trading, while simulatenously warning over the problems of overfitting.

Enter cryptocurrency - which itself is recovering from a massive shakeup to the record high Bitcoin, which had risen to near $3000 CAD, and the newer Ethereum, which also fell 25% last week.  his may indicate that algorithmic and trading volatility has become displaced beyond the confines of the market.  Crypto may not be the safe haven that it seems.

That being said - the S&P 500 always rallies after the inevitable bailout and quantitative easing. You could go long on the market and as long as you live long enough, make a decent profit of about 10% annually, averaged out. But it might be time to hold some cash, wait for the crash, then buy in those sectors where human investors are likely to go - where profits are. The crash will be done, when Amazon's RSI falls to the 30-40 range - that will mean a near 50% drop in Amazon's price to around $600.

I precict the time frame for this to occur will be sometime between now and the end of 2018.

For investors, defensive stocks are utilities, bonds, cash, and gold.

I am trading in the oil and energy sector, expecting a redistribution of capital after the crash, and an increase in oil prices to $60/bl by the end of 2018.

Of course, I don't hope this happens - I just think that it will.

Friday, June 16, 2017

Poem on the Fly

I am the watcher on the wall,
where everything moves but me,
time spinning
somewhere out of reach.

Oh my sweet omatadia
painting gray fields
of blurring abundant
sugarcubes and shitpots -
soaring and swooping
stupid into walls and windows,
and it's only by chance
that you opened the door,
let me in.

I'm drawn to you,
as a lover is pulled
by the eyes,
I fly to them
as though I could drink you.

I become
your specular black halo in a whir.
I touch your hair, and taste lavender.

You tell me to fuck off,
but I never understood a damn thing -
and it always sounds like screaming,
and everything moves but me,
as I watch all the pieces of light
gathering along your edges -
thinking surely, this is God,
and let the swatter fall,
your holy holey monolith
where all smudgy sacrifices
have gathered to pay your homage,
and a thousand eyes shut hopefully at once.

Thursday, June 15, 2017

Coming Out Evomonkey

There's been a lot of development in recent years regarding civil liberties among LGBTQ members, who gained victories in the US when gay marriage was passed under Obama, while at the same time, battling some of the more regressive states.

Progress in Canada has also been rapid, where same sex marriage is legal, and where hate speech in the context of gender is specifically forbidden by law (c-16). Canada is widely considered one of the most progressive countries on earth in terms of gender - and this is something I applaud and feel great pride over as a Canadian citizen.

In exploring my own thoughts and feelings on the recent bill C-16, I came to a few conclusions about gender as it is understood in modern terms, and where I stand on gender and sexuality.  

This exploration has led me to the conclusion that I am genderless as a gender - note, this is not to mean that I am sexless - my sexual organ is male in nature, but many who also possess genetalia of one sexuality identify with various gender identities.

Firstly, let's talk about gender identity itself.

I looked for various definitions of gender identity, trying to get a uniform perspective. The best definition I found was "one's own experience of one's own gender." 

Gender is a social construct to a large extent. So how am I experiencing my own social construct?

I see society as a giant dominance hierarchy inherited from primates, and their progenitors from the sea, and this hierarchy propagates on our basest of urges. Awareness of this fact is a key deterrent for ape like behavior such as fisticuffs or hegemony.

Increasingly, as one examines gender roles in society, the bullshit meter becomes more sensitive. Tradiational narratives are boring social constructs designed to favor procreation and meekness before the overlords, like good like Protestant baby factories. Women, treated like cattle and exchanged with dowries, only given the vote, in relatively recent history.

Gender is the inheritance of a legacy of stupidity and regress - so why should I participate in such an absurd, failed act to categorize the nuanced nature of human sexuality and perception?

I dare say, I have no legal obligation to.

My own beliefs determine my gender, and they are as such:

1) Gender is a social construct designed as a meta-informational-technology to expand the dominance hierarchy.
2) Gender is not a spectrum of what are classified as "feminine" or "masculine" traits. I acknowledge only human traits.
3) Differences in gender identities are a function of differences in genetics and experience - no two genders can ever be the exact same.
4) Gender has increasingly become a political and ideological standpoint - one which I choose to abstain from. You cannot generalize a gender of one - good luck trying.
5) Gender evolves in real time and is immeasurable, an indeterminant value.

As such, I am henceforth declaring my new gender, Evomonkey.

Note:  the pronoun or categorical descriptor of my non-descibable non-categorical gender is subject to change in real time. 

My gender doesn't require you to use any special pronouns as I prefer the English language without even more gibberish inundating it every day. But if you call me evomonkey I won't mind either. I also accept Evo and Monkey. My girlfriend, a cis-norm, calls me monkey-bear - which is technically a hate crime but I'm not pressing charges.

If you aren't aware of my gender, and you assume I am male because of my physical appearance or your interpretation of maleness in my actions, I won't fault you and do not expect you to refer to me by my pronoun under the burden of ignorance. In fact, any recognition of my characteristics, whether you interpret them as male or female, is a compliment.

And when you refer to me as male, my gender (my experience of my own gender) interprets that as Evomonkey.

You say:  "Hey man, what's up tonght?"

I hear: "Hey Evomonkey, what's up tonight?"

Or

"Nice slam poem gurll!"

is heard as

"Nice slam poem Evomonkey!"


Evomonkey as a gender, acts as a sort of filter, transmogrifying all femininity and masculinity into a neutralized state, only considered in relation to each individual.

As such, if I say "he," or "she," or "him," what I actually mean is evomonkey. I choose to say these pronouns out loud, despite my gender identity, out of respect for those who identify within normative categories. 

So what's it like being Evomonkey?

Well, today, my particular gender has a sexual attraction to women, but an aesthetic attraction to men. For example, Ryan Gosling is handsome, however, I do not crave to suck his dick.

Since asexuality is a sexual identity, I am sexually attracted to women and asexually attracted to men.

I'm also asexually attracted to puppies, sunsets, Monet's paintings, and abstract geometrical forms, especially fractals.

My position on the advancement of gender rights, and the law, is to simply abolish or ignore gender altogether, it's such a waste of energy. If you want to be a woman, do it, be a man, do it, be yourself. Who cares? We're all special.

I'll be submitting for a revision to my birth certificate to declare me as either genderless or Evomonkey in the near future. 

Monday, May 15, 2017

Independence, entrepreneurship, trading equities, and the value of time.

I recently began my adventure as an entrepreneur, when I founded my own company called Prometheon Neuroenhancement (soon to be re-branded as True Focus) in the summer of 2016; specializing in cognitive enhancement techniques that are applicable to a number of areas.  The spectrum of utility ranges from decreasing depression and anxiety, to improving working memory and enhancing productivity.

Before I started my business, I was working retail at Pier 1 imports - lugging furniture, arranging candles, and sporting a big smile in my large blue apron. Now don't get me wrong, this was a great place to work, but as I was working there, struggling to pay my bills, I realized an important fact:  that time is the most precious resource we are in possession of.

I founded my business in part because I wanted to pursue more independence as a matter of self-actualization, but also practicality - the endeavors that interest me the most happen to be the most profitable in terms of a time : revenue ratio.  I will explain this in more detail a little later, but the need to properly invest my time became greater and greater as my financial situation got worse.

The realization that I was bleeding time was an important one. Because I was converting time into money for pennies on the dollar, with little prospect for advancement, a raise, or any significant return on that investment. What was the worst, was that I had to spend much less time investing in myself

I decided to take the knowledge I had accumulated on neurohacking, and start my consultancy business.  I had acquired this knowledge over a number of years, as a matter of survival, after being ravaged by Lyme Disease, which had left me with significant cognitive impairments and no prospect of recovery.  Because this was also an area of deep interest and passion for me, it wasn't hard to see the value of expanding my knowledge.  I spent over 10 years collecting, organizing, and applying the things I was learning to my own health and well-being. The program was a complete success, and I had not only recovered from the disease, but had outstripped my mental abilities from before the damage by a considerable margin (15 IQ points and several hundred percentage points in productivity).

I had also administered modules of the program to people online, who were also suffering with Lyme and post-Lyme symptoms.  I derived a great amount of satisfaction from knowing that I was helping people who had suffered so deeply, and in such isolation, as I had for many years.  I soon realized the applicability of these techniques to a surprising range of functions; after all, we live in a society where the use of our minds is often paramount to our success - whether you're a student trying to ace an exam, or an executive managing large accounts.   

I was doing so well, after about two months of the business operating, I was able to quit my retail job and focus fully on neuroenhancement. But this presented a few problems too.  I was a novice entrepreneur and made a few key mistakes.  Firstly, I was idealistic - I wanted to charge the absolute smallest amount of money for my services, so they could be made available to people who couldn't otherwise afford the extremely expensive (and not covered by OHIP) costs of therapy.  As someone who also suffered from both PTSD and ADD, I knew the extreme costs, sometimes as expensive as 200 dollars per hour.  Considering that standard psychotherapy can take years for trauma, you could be looking at tens of thousands of dollars annually.  Incidentally, people with mental illness aren't usually raking it in, creating a sort of paradox where making money depends on good mental healthcare, and good mental healthcare depends on making money.

But my assumption was also wrong:  charging $20 an hour for neuroenhancement, after costs, was significantly less than making minimum wage.  Considering this is a 1000% discount on the market price, it should come as no surprise that it was not sustainable.  I soon found myself in the same position as before, where I was working a lot of hours for little pay. At the time, this was satisfactory because I enjoyed  helping people, and because I was also gaining new knowledge and experience with high value and collecting valuable data for creating future intellectual property. So those costs, in my mind, were well spent.

So despite my best intentions, I had come to face a hard truth: that money is integral to propagating the service I was providing, and so I started to learn a lot more about social entrepreneurship, and how doing the right thing doesn't have to mean languishing in poverty.  Indeed, it is my conviction that social entrepreneurs will dominate capitalism in this century (a topic for future posts).

Once I had established a stream of income from Neuroenhancement, I began the critical application of neuroenhancement to itself. This is an interesting aspect of the program, which is both a cognitive enhancement platform, but also an optimization algorithm. Meaning I was taking the most effective, fast, and important elements of the program, and prioritizing them. It also meant minimizing the time that a participant needed to commit to a program to achieve gains.  This is trimming the fat, cutting the crusts, tightening the belt - pick your analogy - but doing more with less became critical to moving the business forward.

It wasn't long before I began to apply the optimization strategy to my everyday activities. I started planning out my days with greater detail, while also quantitatively measuring gains and productivity.

That involved asking questions like:

1) What is the most important priority today?
2) What are the long-term investments and strategies I can contribute to today?
3) Will I get a good return on the investment of my time?
4) What are the minimum and maximum theoretical returns?
5) What have the returns been on previous investments?

The questions you ask yourself will vary, but the core concept comes down to measuring what amount of time you have invested, and what you expect to get out of that time-investment.  Let's go through a couple examples.

Let's say you spend the day working on your novel (I spend 1 day a week fiction writing); that's a long-term investment.  But if you complete it, it's conceivable (if its of a good quality), that you could have a whole passive income stream coming in. This is a long-term investment with a high spread of theoretical gains: meaning you might get nothing out of it in terms of monetary profit (be sure also to measure how it benefits your advancement of skills), and you could also get a lot out of it. This will be later compared to the Beta value of equities (how risky or volatile is the investment?)

Now let's say you spend the day mowing nieghbor's lawns.  You have made a short-term investment, with immediate, guaranteed gains. This is a low-risk, low-reward investment of time.  There will be times when this is necessary. Just as you diversify your portfolio of investments in various time-scales and levels of risk, so should you invest your time as such.

Another important point I found was evaluating the type of returns - money isn't the only thing you need to consider.  We're facing industries where jobs are regularly replaced or become outdated. This is where having transferable skills is useful, and just as Benjamin Franklin did daily neuroenhancment, so should anyone interested in job mobility. 

Now let's say you spend 25% of the day mowing lawns, 25% writing your novel, 25% learning a new skill, and 25% investing in your own happiness and well-being.

The last point is crucial to understand, because it is an often overlooked time investment, but one which yields significant returns.  Happy people aren't productive, and speaking from personal experience, suffering makes creativity nearly impossible.  Just ask Sylvia Plath's oven.

So how do you decide which endeavor is worth investing in?  That's where your high-low theoretical or real yield comes in. When considering this, make a list:

1) What did I lose by investing my time in this?
2) What did I gain by investing my time in this?
3) On what time-scale will I see returns?
4) What distribution of returns (in magnitude) can I expect?
5) Did the time spent cultivate direct or transferable skills?
6) Did the time spent contribute to a favourable mind-state for productivity?

The exact optimization algorithms for neuroenhancement will be included in my book, Metamorphose: a Neurohacker's Guide to Transcendence.

One advantage of entrepreneurship is that you can intelligently evaluate the return in investment for your time while keeping in mind the value of basic human happiness, which should be a central goal - to get satisfaction from being alive. You can define "satisfaction' as it suits you - not everyone's path is the same, and that's a conversation you need to have with yourself.

But no matter what you strive for, happy people are proven to be more productive, so there's little room for argument that the investment is worth making.

This is one part of neuroenhancement, asking "what mind-states are most fertile for which types of productivity?" Then learning to create those mind-states by manipulating internal and external stimuli.

I realized that I can't do one thing all the time - it just isn't me. Sometimes I feel the need to read balance sheets and dig into some prospects, other times, all I want to do is bang on the piano and write some tunes.  To an extent, I had to learn to accept myself in order to get to where I could be confident what I was doing had value. 

But one key point I should make is that none of my activities are justified retroactively, everything is planned to achieve a certain effect or goal. Nothing I do, even wasting time doing nothing, is without purpose.

Anyway, once I was settled into my new life on the farm, I also began trading the stock market, which of all my activities has been the most profitable per time spent and just a very rewarding experience. But I didn't go into trading blindly - I don't have any special aptitude I know of. There's a common adage about retail traders that says 90% of new traders lose 90% of their investment in the first 90 days.  I spent several years studying the supporting knowledge that underpins how markets behave to avoid that scenario; including economics, finance, artificial intelligence, fractal geometry, mass psychology, and many other elements that underpin a stock's price. I also constructed predictive models and began "paper trading," where you execute imaginary trades and look at the effectiveness of your strategy.

All in all, I probably invested a good 1000 hours into this education, at first, simply because I found that topic intellectually stimulating. I was fascinated with computational theories of the Universe like complex systems theory and Wolfram's automata, as well as artificial intelligence, especially as it concerned neural networks. I found it especially puzzling that all of the complexity underpinning a given security could be compressed to a binary plane, a squiggly line.

Side note: I am happy to announce that I was able to build my first neural network earlier this month, and used it to approximate values of square roots, using a program called Simbrain.I plan to use deep learning to analyze the most impactful variables on stock price through regression.

Back to the subject at hand.  I recently calculated the time:profit ratio, for trading as compared to Pier 1 imports as a retail clerk, and trading part-time had a whopping 700% difference in profit : time. But in order to gain that I had to also spend considerable time studying.  But the major advantage is that the things I learn have value elsewhere - especially in working with clients focused on productivity enhancement - which I believe will become a huge market for human resources.

Given my priorities, being happy, using my time well.. I designed my day to an equilibrium.

Here is an overview of what a typical day is like for me now:

8:00 AM - wake up, stretch, drink coffee, kiss girlfriend, feed the dog, pet the dog, look at the sunrise, eat breakfast.

8:30 AM - premarket assessment - who are the big movers and shakers on the market, have there been any significant developments underpinning a potential move in stock price (such as FDA clinical trials or SEC investigations, Elon Musk's twitter).

9:30  AM - Monitoring price positions and assessing short-term opportunities. Researching and re-evaluating long-term positions relative to broader market conditions, world events, mass psychology (stocktwits.com) and reviewing analyst assessments.  When I'm done trading, I codify gains and losses in data sheets.

10:30 AM - Study / Self-improvement: currently I am studying neuroanatomy, programming in python, and practicing piano.  I also meditate, do audiovisual entrainment, and dual n-back working memory training.

12:30 PM - lunch

1:00 Pm - Go for a run with the dog.

2:00 - Prometheon - client sessions, writing IP, working on case studies, gathering and reassessing research, selling, etc.

5:00 - Whatever I feel like doing.  Sometimes, this is video games, other times, I will continue writing, or researching for the next day's opening bell, write poetry, or nonfiction - lift weights, watch a movie, whatever.  It's OK to work here, so long as I am enjoying what I'm working on.

This schedule is a general idea of what it's like for a day in the life, but I also change this day to day and week to week.  Some days are more fertile in terms of writing fiction, other days, are big music days where I will produce several new songs.  Allowing for flexibility means "striking while the iron is hot."

As an overall picture, I went from slaving in a retail job where injury and depression were inevitable, in a $1200 a month apartment I couldn't afford and didn't want, to living on a horse farm in the country for $400 bucks a month, significantly happier and most successful than ever in my life.What's more I'm making enough to support my goals of helping empower others. My ultimate goal is to somehow make the best tools in neuroenhancement completely free.  I still have a lot of work to do and I am constantly developing new ideas, like a mobile app, virtual reality applications, automation, and integration with digital mental health services.  I am putting one foot in front of the other and doing the work, hoping I will get there some day. 

And you can do this too - there's a significant argument that we live in a time where you must be able to do this, as markets are created, destroyed, and transformed at an exponential pace, you may be required to learn a new task or skill quickly - you may need to diversify your income streams to hedge against unpredictable forces. Former employees of Blockbuster video, and current employees of Netflix can attest to this.

So when you wake up tomorrow, remember to ask yourself, is my time being spent in a way that benefits me most? How can I change? What are the steps I need to take to get the most out of my time? And perhaps the most crucial question; am I happy?

Thursday, July 28, 2016

Dew you

Slip dewdrops of silken crystal globules from treetops.

Dance deciduous hulks of old,
jade manes
gripped in
raindrops.

Somewhere thunder in the far off
rolling
grumbles
to me.

Vaporous dreams drift and sway,
cottonball
careless
days. 

Percussion-drip, sing to me
of what the
heavens
say.

"I leave for tomorrow"
flying over
flowered
fields. 

Thursday, January 14, 2016

Rave Review

Freestyle poetry is a game of chance.

You never know a masterpiece

from shitting your pants,

the critics will decide;

and say that


"it's improper,

this nonsense

that he proffers!"

Then, like a snake,

like a creeping vine,

a sickness they can't define,

and they cannot escape:


"How vile,

how vacant,

in depravity

his elation in making sin;

how sick these nimble shadows

leaping on a once-dead page;

how insidious their plan

as they enter your

skull and sing

of cockroaches

skittering.


Decidious dissolution!

This design of deception!

How evanescent, this line

gone flying into the night of

your perception, come alive by

electrons racing through transistors,

and what is man, what is man

but a conduit then, and

suddenly afraid I

must flee, fly

be far away

humming

until I

sleep."

One For Your Wallet

If this poem could

fit inside your pocket,

would you carry it?

Or is it for money alone

to live in your wallet;

to be sheltered from the rain,

to be held,

to grasp your gaze?


You ask,

what is the value

of a word

to a merchant?

It cannot buy food

or heat,

It cannot bargain

with time,

or give you jewlery,

stuff -

but looking enough,

some words

could gain

your heart.