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October 29, 2013

Algorithmic predictions and portfolio management


We think the robot future is going to be more disruptive than many think, but we also suspect that actual data-crunching plays only a small part in the career of a successful analyst.

There is some time spent crafting a compelling narrative around some basic assumptions, and then an awful lot more spent repeating that story ad nauseam on the phone, in reports, and in person.

Not to mention the part about getting to know people at the companies they cover. Top of UK brokers' list of problems at the moment are regulatory plans to make them charge their clients directly (as opposed to their clients' customers) for introducing them to the management of companies.

But, even if it is just about the value of good ideas - if you have some really good algorithms for, say, indexing websites or trawling Twitter, why would you advertise and sell them?

The world's most successful hedge fund strategy is both the most secretive and the one that you could never invest in: Renaissance Technology's Medallion fund. The fund ignores the mainstream finance literature, preferring to scoop up experienced cryptographers and mathematicians required to sign intimidating non-compete clauses, and it is willing to trade signals in the noise that work even if it doesn't understand why.

October 27, 2013

How to argue: twitter gently cautions its readers before offending them


Another field has a telling name: "possibly_sensitive." It's set to either true or false. The field indicates whether a tweet links to potentially offensive things such as "nudity, violence, or medical procedures." (If ever you wanted a snapshot of our world's anxieties in three terms, there you have it.) As a user you can check a box on your profile so that the media you link to is automatically flagged this way. If you don't, you risk having your pictures of your medical procedure marked as objectionable by an offended reader and thus put "in review," the Twitter version of limbo.

A field like this indicates the inherent difficulty of managing an enormous platform like Twitter. The only way the company survives is if it can safely ignore most of what's said on Twitter. If it had to use employees to monitor tweets, it wouldn't last a day. But in order to attract as many users as possible, it must find ways to avoid horrifying them.

There's a great deal of hedging in both the words "possibly" and "sensitive." The end result is that Twitter is putting the moral burden on the user. One person's art is another person's smut, and Twitter is not going to decide which is which--nor is it going to force you to look at the stuff. This position is both somewhat noble for its acceptance of the range of human expression and also highly expedient, putting the responsibility back on the user: We told you the picture was "possibly sensitive," so why did you look at it?

October 26, 2013

Scientific American Why Your Brain Needs More Down time Research on naps, meditation, nature walks and the habits of exceptional artists and athletes reveals how mental breaks increase productivity, replenish attention, solidify memories, creativity


Why Your Brain Needs More Downtime.

A 2010 LexisNexis survey of 1,700 white collar workers in the U.S., China, South Africa, the U.K. and Australia revealed that on average employees spend more than half their workdays receiving and managing information rather than using it to do their jobs; half of the surveyed workers also confessed that they were reaching a breaking point after which they would not be able to accommodate the deluge of data.

Research on naps, meditation, nature walks and the habits of exceptional artists and athletes reveals how mental breaks increase productivity, replenish attention, solidify memories and encourage creativity

scientificamerican.com/article.cfm?id=mental-downtime&WT.mc_id=SA_MindFacebook.

scientificamerican.com/article.cfm?id=mental-downtime.

To summarize, Americans and their brains are preoccupied with work much of the time. Throughout history people have intuited that such puritanical devotion to perpetual busyness does not in fact translate to greater productivity and is not particularly healthy. What if the brain requires substantial downtime to remain industrious and generate its most innovative ideas? "Idleness is not just a vacation, an indulgence or a vice; it is as indispensable to the brain as vitamin D is to the body, and deprived of it we suffer a mental affliction as disfiguring as rickets," essayist Tim Kreider wrote in The New York Times. "The space and quiet that idleness provides is a necessary condition for standing back from life and seeing it whole, for making unexpected connections and waiting for the wild summer lightning strikes of inspiration--it is, paradoxically, necessary to getting any work done."

a recent comprehensive meta-analysis by Jessica de Bloom, now at the University of Tampere in Finland, demonstrates that these benefits generally fade within two to four weeks. In one of de Bloom's own studies 96 Dutch workers reported feeling more energetic, happier, less tense and more satisfied with their lives than usual during a winter sports vacation between seven and nine days long. Within one week of returning to work, however, all the feelings of renewal dissipated. A second experiment on four and five days of respite came to essentially the same conclusion. A short vacation is like a cool shower on an oppressively muggy summer day--a refreshing yet fleeting escape.

Instead of limiting people to a single weeklong vacation each year or a few three-day vacations here and there, companies should also allow their employees to take a day or two off during the workweek and encourage workers to banish all work-related tasks from their evenings. In a four-year study, Leslie Perlow of the Harvard Business School and her colleagues tracked the work habits of employees at the Boston Consulting Group. Each year they insisted that employees take regular time off, even when they did not think they should be away from the office. In one experiment each of five consultants on a team took a break from work one day a week. In a second experiment every member of a team scheduled one weekly night of uninterrupted personal time, even though they were accustomed to working from home in the evenings.

October 25, 2013

GeoJSON and twitter


This metadata contains not just tidy numerals like "25" but also whole new sets of name/value pairs--big weird trees of data. A good example is in the "coordinates" part of the tweet. This value contains geographical information--latitude and longitude--in a format called GeoJSON, a dialect of JSON that's used to describe places. This can seem complicated at first, but it's actually awesome, because it means that simple-to-understand formats such as JSON can express some pretty complex ideas about the world. GeoJSON isn't controlled by Twitter; it's a published, open standard.

Twitter has added another field, called "place." Places are not just dots on a map but "specific, named locations." They include multiple coordinates--they actually define polygons over the surface of the earth. A tweet can thus contain a very rough outline of a given nation. A few tweets can, with some digital fiddling, serve as a primitive atlas. And through some slightly complex math, they can reveal how far one tweeter is from another. Tweets also have a "created_at" field, which indicates the exact time at which they were posted.

A simplified version of JavaScript called JSON, which stands for JavaScript Object Notation. API essentially means "speaks (and reads) JSON." The language comes in a bundle of name/value fields. In twtitter, 31 such fields of which make up a tweet. For example, if a tweet has been "favorited" 25 times, the corresponding name is "favorite_count" and "25" is the value.

October 23, 2013

Chase vs Schneiderman: Why have no top Wall Street executives have been charged criminally for risky acts

Why have no top Wall Street executives have been charged criminally for the risky acts that triggered the crisis. The government also prefers to settle with big companies rather indict them, fearing that criminal charges could unnerve the broader economy.

The government investigations into JPMorgan, which focus on securities the bank sold from 2005 to 2007, raised questions about whether JPMorgan had failed to fully warn investors about the risks of the deals.

One of the largest pieces of the $13 billion deal could come from a settlement with the Federal Housing Finance Agency. The agency sued JPMorgan over loans it had sold to Fannie Mae and Freddie Mac, the government-controlled mortgage finance companies.

The settlement would also resolve a case related to Bear Stearns, the people briefed on the matter said, a lawsuit that has pitted the New York attorney general against JPMorgan.

Eric T. Schneiderman, the New York attorney general, sued JPMorgan last October, saying Bear Stearns and its lending unit, EMC Mortgage, had duped investors who bought mortgage securities assembled by the companies from 2005 through 2007. Through a deal backstopped by the government, JPMorgan bought Bear Stearns in 2008.

Mr. Dimon has called the lawsuit unfair, arguing that JPMorgan should not be penalized for buying Bear Stearns.

Yet JPMorgan's board, faced with regulatory problems, one more vexing than the next, is eager to strike a conciliatory stance. Toward that end, the bank's board approved the payment of about $1 billion in fines to government authorities so it could resolve investigations into the trading loss in London and an inquiry into the bank's credit card products.