O(f(n)) notation EXPLAINED... doh

UC Berkley Lecture by Computer Scientist and Physicist Dr. Jonathan Shewchuk, where he really explains a number of misunderstandings with this commonly used notation! It is also a good introduction for the inexperienced ones!

Here it is, enjoy:

Banking Bonuses

It is a sure way to climb the millionaires ladder :-) A path to riches is through the financial sector, and this has been so for many years. Recent criticism of Bonuses paid out to employees of Investment Banks / Funds have just achieved more advertising for these institutions for talented people.

At JPMorgan 1'626 staff received $1 million or more and 27 individuals walked away with a hefty 8 million bonus, at Goldman Sachs this was 21 employees. [source: Andrew Cuomo's recent report on Bank Bonus Culture]

Working at one of these organisations shifts the odds of becoming a millionaire in a lifetime considerably in your favour.

C# vs. C

So how efficient is C# really?? In relation to a language like C. Well the answer is, that there is no conclusive answer, yet a set of features of C# where performance matters is investigated in this nice MSDN article.

The article was written back in 2004, and much has improved in the C# world, and not just in terms of VM performance but the language capabilities aswell.

Large Search-Querry datasets

On a blog I recently visited, it was pointed out in context of a web search analysis study that: "This study also highlights the current situation in web-scale research: that only companies like Microsoft, Google or Yahoo! have access to the sheer volume of data needed to do such an analaysis." (sorry I do not remember the source of this, if it is ur blog please let me know, so I can reference you) This has been brought up numerous times in the past and I couldnt agree more. What is really very important is for society (/ internet users) to realise that they are the creators of the content and they should demand access to the agregatted datasets [Tapscott&Williams in Wikinomics - How Mass Collaboration Changes Everything]. Or in other words (since most people wouldnt know what to do with the datasets) some kind of compensation. This applies less to search engines, since they provide a free service, and applies more to other collaborative web 2.0 apps. However, search engines make money on advertising, so thats the reason why they are free to use, not because users are being compensated for the datasets that these search companies decide to store and aggregate.

My criticism is that search engines shouldn't keep the raw data hidden behind proprietary domains but open up to the world research community.

Submit your video into space

A pretty cool and interesting PR project launched by NASA, where you can submit a video clip on the topic of why you think space research is important!

check it out under:
http://www.nasa.gov/externalflash/myexploration/index2.html

Defending your digital freedom

We are overwhelmed by technology these days. Our lives evolve around going through our days being exposed to one or the other technical gadget or application. Without even realising it these collect all kinds of sensitive usage patterns about us.

There is an advancement in technology that has not yet been mirrored by appropriate and highly necessary legislation. Groups such as the ElectronicFrontierFoundation (see http://www.eff.org/about), which is an organisation dedicated to protect freedom of speech. Also backed by the World Intellectual Property Organisation.

Savers Prefer to Invest themselves!

An article that appeared today in the FT, according to an FT poll, savers feel safer and prefer to invest themselves rather than putting their money into investment banks.

http://www.ft.com/cms/s/0/0e13ea70-aba7-11de-9be4-00144feabdc0.html
(you might need to register in order to see the article)

Crisis Sentiments - pretty cool!!

BBC has made a google map that maps to opinions and comments relating to the crisis kicked off by the Lehman Brother collapse (various dates are associated with the crisis start thought). It is an interesting interactive World Wide Map, location point & click & read interface, pretty neat web 2.0 idea, so make sure to check it out!!!

check out my customised adds and comments

Intuition and Trading

There are numerous problems system designers face when tasked with developing IT Expert Based Systems. Such systems have to rely on a rule base from which inferences are made about a problem area(s), this is in a way the core idea behing an Expert System (ES). However the main problem is the acquirement of expertise or knowledge, if you like, into the rule base.

Numerous academic projects point out the fact that when traders were tasked with explaining some of their trading decision making processes, they were useless. The traders often explain that much of their decision making is based on intuition and that pin pointing explicitly, lhow they arrive to trading decisions is very difficult.

In a recent scientific experiment, two men with amnesia were asked to remember pairs of 8 objects (Nature July 28iss). Each man was shown the 8 pairs 5 times a day for numerous days. The man eventhought they could not remember why, learned to distibguish the pairs.

An excerpt follows:

When one of the men was asked if he picked an object because he remembered seeing it before, he said, "No. It just seems that's the one. It's here [pointing to his head] somehow or another and the hand goes for it."

Without being aware of it, the men learned the task after approximately 1,000 trials. This is about the same number of trials needed by monkeys with similar lesions in the medial temporal lobe. Normal monkeys take about 500 trials to learn the task.

The implication is that humans have an unconscious ability -- comparable to that in animals -- to mold our behavior in response to a consistent stimulus. "Habit learning is going on all the time. All of us are acquiring habits, " Squire said. "What this is showing is that habit learning is well-developed in humans, and that it works independent of consciousness."

This seems to indicate a strong relationship to intuitive learning, such knowledge that is acquired by traders via repetitive trading behaviour and performance feedback. In fact this is feedback learning and in IT terms it is synonymous with Unsupervised Learning, for cluster detection of patterns and inference. At least this is my interpretation, I am quite interested into past research of this kind... anybody who has a valuable opinion please bring your comments to the table :-)

Correlation

I just noticed today how good the wikipedia article on correlation is. This is worth a read, if not only for nice concise expressions, of the form such as "correlation or co-relation refers to the departure of two random variables from independence" and many others. Anyway, as we are talking statistics, do check out the highly related articles on Pearson's Correlation, and Standard Score.

CreditCard Industry - is it Rotten?!?

An amazing documentary I just watched yesterday - when I couldn't fall asleep! It explains what credit card industry really is about. The documentary is high profile, senators, top lobbyists and law academics are interviewed. Extremely well structured storyline illustrates the history and current problems with the industry.

please watch it in your free time, really CHECK IT OUT, it is EYE OPENING and comment and discuss (check out my customised adds as well :-) )

I will probably post more on the industry. Credit Card industry is fascinatingly interesting because it really applies to everyone but is a shady, and I meaaan, veeery shady industry! stay tuned...

Inglourious Basterds (2009)

I went to see this new movie (Inglourious Basterds (2009)) yesterday and I have to say I was impressed with the storyline. Set in the 2nd world war it follows a group of american nazi fighters and a jewish girl Shosanna on the run from the nazis, it paints a semi-fictional picture and shows what could have been an outcome in the world war.

The movie made me interested into possible war related scenarious and especially the controversial Munich agreement just before the war in 1939 that really triggered germany's power and fascinatingly enough, historians debate that the war (Blitz Krieg) might have had never been so successfull for Hitler.

what follows are experts from wikipedia article:

Czechoslovakia might have prevented the war

On August 4, 1938, a secret Army meeting was held at which Beck read his report. They agreed something had to be done to prevent certain disaster. Beck hoped they would all resign together but no one resigned except Beck. However his replacement, General Franz Halder, sympathised with Beck and together they conspired with several top generals, Admiral Wilhelm Canaris (Chief of German Intelligence), and Graf von Helldorf (Berlin's Police Chief) to arrest Hitler the moment he gave the invasion order. However the plan would only work if both Britain and France made it known to the world that they would fight to preserve Czechoslovakia. This would help to convince the German people that certain defeat awaited Germany. Agents were therefore sent to England to tell Chamberlain that an attack Czechoslovakia was planned and their intentions to overthrow Hitler if this occurred. However the messengers were not taken seriously by the British. In September, Chamberlain and Daladier decided not to threaten a war over Czechoslovakia and so the planned removal of Hitler could not be justified.^[153] The Munich Agreement therefore preserved Hitler in power.

Hitler has not enough Commodities for a war

Germany lacked sufficient supplies of oil and other crucial raw materials (the plants that would produce the synthetic oil for the German war effort were not in operation yet), and was highly dependent upon imports from abroad.^[175] The Kriegsmarine reported that should war come with Britain, it could not break a British blockade, and since Germany had hardly any oil stocks, Germany would be defeated for no other reason than a shortage of oil.^[176] The Economics Ministry told Hitler that Germany had only 2.6 million tons of oil at hand, and should war with Britain and France, would require 7.6 million tons of oil. Starting on 18 September 1938, the British refused to supply metals to Germany, and on 24 September the Admiralty forbade British ships to sail to Germany.

Czechoslovakia was Given away and Hitler got his Commodities and more armament

On 30 September 1938, a one-day conference was held in Munich attended by Hitler, Chamberlain, Daladier and Mussolini that led to the Munich Agreement, which gave to Hitler's ostensible demands by handing over the Sudetenland districts to Germany.^[179] Since London and Paris had already agreed to the idea of a transfer of the disputed territory in mid-September, the Munich Conference mostly comprised discussions in one day of talks on technical questions about how the transfer of the Sudetenland would take place, and featured the relatively minor concessions from Hitler that the transfer would take place over a ten day period in October, overseen by an international commission, and Germany would wait until Hungarian andPolish claims were settled.^[180] At the end of the conference, Chamberlain had Hitler sign a declaration of Anglo-German friendship, to which Chamberlain attached great importance and Hitler none at all.^[181] Though Chamberlain was well-satisfied with the Munich conference, leading to his infamous claim to have secured “peace in our time”, Hitler was privately furious about being “cheated” out of the war he was desperate to have in 1938.^[182][183] As a result of the summit, Hitler was TIME magazine's Man of the Year for 1938.

As can be seen, european powers wanted to avoid war at all cost, especially Britain. It is ironic of an opposite effect and commodities and armaments that were hence secured. The invasion of Czechoslovakia without fighting was a disgrace, what was more that Britain and France even found such an arrangement of europe acceptable without a twitch on their eyes.

YouTube and theyTube

Recently I had a number of academic publications accepted on my work with youtube in the financial markets. The results were highly encouraging and extremely interesting.

My paper prooves this wrong convincingly, however the question still often comes up, "...so can you take something like youtube really serriously?" Isn't it just a bunch of home PC camera amateurs trying to get attention on a silly website!!?

...the answer is no! I've come accross the Google History page today (i recommend a read of the timeline, certainly fascinating) and it might struck you that in December 2007 the Queen of England launched the Royal Channel on YouTube, to be the first monarch to establish a video presence this way. In January 2009 the Vatican launched a YouTube Channel to provide updates from the Pope and Catholic Church.

These are marked as milestones among top achievements of Google - certainly significance is carried here...

The Flu effect this Winter

Information is power, and power is information! We can extract patterns and insightfull features and make extrapolations about the future. We may not realise this but without breaking any terms of acceptable data use or data protection, Google inc. has access to aggregated dataset on search querries. Surprisingly this offers a lot more than one would imagine. Each querry can be associated with a geographical location, precise time, simillar querries made, previous pages the user was on before visiting google, the browser or even operating system used... and even much deeper demographicall knowledge based on user profiles (in case the user is logged into google-mail or for that matter any of the many google services).

Google inc. naturally realised this and started to make serrious use of aggregated search querries data. See this page for google's stand on this. They recently partnered up with U.S. Center for Disease Control and Prevention (CDC) to research influenza trend forecasting using their querry datasets. The website is available here, check it out.

On google.org an analysis for the future flu season is provided. What is interesting however is that the influenza season in Australia and New Zealand is not really that bad and when past flu seasons are incorporated into the overall picture one can gain the strong impression that this comming flu season will not be all that bad!!

and in the US:

See and judge for yourself

Web 2.0 Business Model

During my 'traditionally irregular' web surfing this morning, I came across a blog article that focussed on CRM (Customer Relationship Model) and how it will look under the use of web 2.0 concept.

The diagram above is self explanatory - hint, read from the top (customers form partnerships & and provide self-service) to the bottom right (community generated collective intelligence), and go back up on the left side of the diagram.

I like this diagram because it is simple illustration of not just customer intelligence but the general web 2.0 model (with a little imagination of-course). Youtube or flickr are basically based on this model. I am convinced that many more companies with these simple models will follow the example of illustratory stock start ups. Something to keep in mind in many ways when valuing businessess.

News Tweeting

I never really followed the Twitter.com phenomenon. I did join up thought and have had an account for some time now. I remember when twitter was still in its obscurity, not many people knew about it and I thought what a funny concept to share one line thoughts with random web surfers. 

Recently a study by Pear Analytics classified twitter talk and discovered, based on their statisticall classification that around 40% of all twitter posts is pointless blabber, they also found that the count of poststwhich could possibly be classed as news related was minimal (below 10%). 

Chris Matyszcyk submitted an interesting opinion. He suggests that the blabber itself is off value to many people and is actually quite usefull way of accumulating new knowledge. See for yourself, on his blog.

Interesting I thought... any opinions welcome, just drop me an email or comment!!

Recession RECOVERY is here!!!

French & German GDP figures for the second quarter show it clearly - black on white, finally the economic growth substantiated. Technically this means Germany and France are out of the recession, yuppiii, yep yey, you might think.

This is not quite the case thought. It seems most of the growth was spawned by govermental rescue packages and incentives that initiated good levels of consumer spending (i.e. old car exchange incentives). Export levels in germany have indeed increased, however imports have fallen which in fact inflates the GDP figure with a certain uncertainty.

Let us hope the largest shrinking of worldwide economies is over soon, but maybe getting too excited too quickly will be a mistake.

Web 2.0 and Mass Collaboration

Hey folks, its been a while since my last post! Today I would like to talk about web 2.0, it is a hype word most of you would have heared in the recent years, either used by your friends or somewhere in the media.

Web 2.0 is not a new version of the internet, it is rather a different paradigm, it basically stands for a web that is editable by everyone. In the past, a website administrator would be responsible for updating and editing a websites online content. However now it has become much more common for everyone to update online content, applications such as wikipedia, youtube, flickr or facebook are great examples of web 2.0 systems. 

The problem we are currently facing is to gain a better understanding of how this affects user behaviour on the internet, and for me especially, it is interesting to investigate ways in which content that resulted from a form of mass collaboration (that is; all users updating content with a certain goal in mind, this could be to inform, compete, or simply share) can be used to an advantage. In this regard, we just recently had a publication on the use of web 2.0 system youtube in financial news publication (http://www.ieee-sofa2009.org/). We found some interesting results and another two papers have recently been published on work stemming from this investigation.

To finish on an entertaining note, a recent study looked at facebook use and relationship jealousy. Seems like worth a read for all you out there with girlfriends/boyfriends and partners.

News never settles down...

When rivals battle it out, news never tends to settle into the stock prices that much. In my post from Wednesday, July 8, 2009, I mentioned that Google is planning to develop an operating system and this might be strongly perceived as a long term risk to Micrsoft (as this is Microsofts core business). Since then, Microsoft has announced that it will offer Office application online and for free from 2010, further it seems that a yahoo takeover by Microsoft is agressively in the making.

J. O'Neil, the well known author and investor states that in his investigations he has found that usually news, as it comes out, creates an effect on the prices over an arbitrary period, however within some time price always tends to return to the a-priori (before) news price. Googles plans are hence maybe not so real towards microsoft shares as some people might want to think.

With Microsoft I would currently expect a drop in share prices over next few weeks. Factors: yahoo take over, Google's plans, smaller revenues if Office is to be offered for free. However over the longer term (months and next few years) I can see Microsoft on a steady footing, as Google's threat is really just more psychological than real, and Microsoft has other profitable branches that show a lot of promise, unless hindered by monopoly regulation.

Tech Companies...

According to news released yesterday, GOOGLE is planning to built an open source operating system under the name GOOGLE Chrome OS (following its successful free Chrome browser). The OS will be based on a UNIX kernel, it will however be build from the ground up. Some speculate this could have a drastic negative effect on Microsoft shares over future years.

GOOGLE certainly represents a very capable and potentially extremely dangerous competitor, especially if it taps into Microsofts' core products' business revenues.

Markets are on a big move!!

Most main markets are very highly correlated (correlation is a statistical measure, it indicates strength of relationship between data). Specifically, the big falls and rises tend to happen in tandem. DAX and CAC, or FTSE and DowJones on a daily basis on average might move by differing magnitude and direction. However, what correltion tells us is that there are some moves that tend to co-occur. A simple analysis of the indices data shows that it is the large moves that tend to co-occur most often.

Today the 6th July (Monday) is one of those days, a large and negative move throughout all main markets has pertruded world markets. Also on a larger granularity, over March, April, May FTSE market has steadily increased in value, and a negative trend is clearly emerging during June and July! Dow Jones, DAX, CAC, NYSE, etc... show all the same pattern, not surprising since mass psychology affects every market participant to a degree.

In my opinion, July will with certainty see some decrease of valuation over all major indices. Reasons??! A number of them: Macroeconomic figures, Company outlooks, political, environmental stability and most Technical Analysis points towards investors' uncertainty surrounding recent price advances.

Rescue Package(s)

It is somewhat ironic and maybe even perversely funny... the credit crunch is mostly consequence of over spending above our abilities. Basically countries and individuals were taking on too much debt and credit for a number of reasons, that certainly are significant and for sure logical, in a way just like it is happening again. Governments are increasing their spending and hence debt again (think - rescue / bailout packages)!

BBC prepared some nice overview graphics of the current crisis

44th US president and the Markets

Yesterday (20th January 2008) saw the Dow Jones drop by a massive 4%. The fall on the market came on the same day Barack Obama was sworn in as the 44th US president. Notice all these 4, by the way, only joking lets better not look for such patterns :-)!

As explanations and analyses for this drop began to appear in the financial media, I was just thinking to myself, this is just very, very, very bad. The media, brought forward a number of reasons for the drop;

1. the first reason - bad company reports, such as Bank of America, JP Morgan, City Group, Bank of New York Mellon (88% fall in profits) or others - just check out this bbc.finance article.
2. the second reason - apparently the speach that Obama gave at his inauguration, highlighted how bad the challenges for the US economy really are.

It is clear the bad company news are negative and the challenges highlighted by President Barack Obama might have hit a nerve with investors.

Imagine this however;

1. a young, determined president takes office and promises to adress and deal with the economical challenges directly and as swiftly as humanly possible
2. after an avalanche of negative quarterly reports, finally a positive one appears as IBM announces surprisingly good profit forecasts above analysts expectations.

So among all the bad news... especially yesterday had the chance to be a good day, but the markets decided otherwise. This shows that current market mood seems to fuel negative moves and if the mood isn't right, the whole market won't be.

A Happy New Year in the Crisis!

Hmmmm... well, well, what a start to the new year - highest unemployment numbers in the states since god knows how many years, bust businesses (Virgin's Zaavi, Woolworths,...), lowest interest rates and risks of deflationary nature, gas supply problems into significant parts of Central and Eastern Europe from Russia (via Ukraine) and like all this isn't enough we also have a flaming war in GAZA.... mhm, excuse me, I ment a Genocide and a most horrible humanitarian crisis!!

...the last year also wasn't the best one, in fact it was the worst one for the stockmarket, a truly most horrible financial debt crisis since 1929 (I highly recommend for readers to at least check out this link of Dow Jones' historical index).

Given all this, what is the prognosis for 2009, well it looks to be a very gloomy year Economically and Politically... the Middle East, UN, Economic crisis, and Financial regulation will most likely be in the forefront this year.

As every year, there are also a number of bright sides, this year should (whatever everyone says) see the bottom to the falling and battered equity markets and hence certain diversified portfolo investments (with minimised systematic risk) on the long side might be right this year as a turnaround in economic prospects is eventually invevitable.

More on this, and specific investment ideas & brainstorming, in my future posts!