Author: skohlhoff

Wearable Tech – Testing Out the Myo Armband


I pre-ordered the Myo Armband well over a year ago. After multiple iterations and a period of time for developers, Thalmic Labs finally started shipping their first customer beta versions of the Myo Armband. The Myo allows you to control (soon to be any) Bluetooth devices via arm-gestures. As the marketplace/ecosystem grows (think the iTunes store), you’ll be able to control more devices with more gestures.

Initial Reaction: It’s pretty mind-blowing to control the devices around you without having to physically interact with each and every single one. I personally prefer to gesture control devices around me, as opposed to voice control devices. Gesture and voice control I believe will be the future of interacting with tech, but they each will have their places. For example, I’d rather voice control devices in a car, but would rather control a home entertainment system in my house with gestures. Though I do believe much further down the road, they will exist together, but for the foreseeable future, each will be relegated to their own applications.

Thoughts Going Forward: If you look up reviews on Myo so far, they are fairly mixed. But I feel the poor reviews are by people who have never worked at a hardware/software company before and don’t understand/appreciate how hard this stuff is to build. My take on the Myo is this a great step in the right direction and knowing that it will get better with time is promising. I compare it to the Rio PMP3000, one of the first MP3 players in the late 90’s. I bought this 32MB device and have the same feeling, the technology itself is extremely innovative, but there are glaring holes in the technology that you would assume be solved over time. I think we all know what happened with MP3 players in the few years after the PMP3000, with a little device called the iPod and a company called Apple.

How It Works: Out of the box, the Myo Armband recognizes 5 gestures: wave right, wave left, spread fingers, fist (with rotation left/right), and tapping of fingers to thumb. Once you’ve connected it to the Bluetooth device of your choice (Mac, iOS, PC, Android, with more to come), you make a gesture to activate the Myo Armband. From there, it’s best to let the Myo Armband adjust to your arm for about 2 minutes. After it has adjusted to control the device you’re connected to, you must “unlock” the Myo Armband before executing an action. For example, say I have it connected to my Spotify on my phone. To turn up the volume, I must “unlock” by double tapping finger to thumb. The Myo is then unlocked for roughly 2 seconds for me to begin performing a recognized gesture. Once unlocked, I make a fist and rotate it clockwise to turn the volume up. Once I’m done adjusting the volume, I return my hand to a “resting position” and the Myo locks again.

My Use/Thoughts So Far: In the first few days, I’ve been doing chores around the house while controlling the music on my Sonos system. It’s pretty awesome. The downfall of the Armband at this point are that at times it identifies other actions as the “unlocking” and/or one of the five recognized gestures, thereby doing unintended actions. My current workaround for this is if I know I’ll be active in the near future, I’ll move the armband to deactivate the connection. Then, next time I want to change a song, I do the syncing action, then can immediately perform the 5 gestures, as the Myo recognizes it hasn’t left my arm, so therefore doesn’t need the 2 minutes to sync.

Some Investing Ideas for 2015


2014 has come and gone. The S&P 500 returned around 11.8% (not including dividends), which largely surprised most, especially after 2013 where the market returned >30%. My post in June of 2014 highlighted the possibility of a large pullback in Q3, followed by a strong rally into the end of the year in Q4. Well, I was generally correct, although providing specific index levels would prove how right I could have been. After my post, Q3 was largely flat (but finished up ~2.5%), and at the very end of Q3/beginning of Q4 we finally got the pullback (~7.5% top to bottom), but it wasn’t as pronounced as predicted (my prediction of ~15%).

If you look at the chart from that pullback, it is very “V-shaped”, meaning short-lived with a quick recovery in store. This “V-shaped” pullback has been a theme of this bull market, but particularly the last two years or so. Below is a weekly chart of 2014 highlighting all of the instances of these quick dips (click on it to view a cleaner picture). This is a weekly chart of the S&P500 in 2014. If you notice all but one of the five pullbacks have happened over a four-week period. The other one recovered its losses in 5 weeks.

It’s generally healthier to see a prolonged bottom (more people sell the due to fear, which historically sets up for a “healthier” continuation/upswing). With the lack of prolonged bottoms, this could mean more volatility and possibly larger pullbacks in 2015. Just a thought.

2015-01-04 12_07_07-7wy8uu7u (1504×722)

All of this said, what are some opportunities in and outside of the US (S&P 500) that I’m looking to capitalize on? Here is a link to a Google Spreadsheet where I conducted a study of different ETFs heading into year-end.

https://docs.google.com/spreadsheets/d/1GV_-ZA7MFuUVOJoZ2Z0-PnbsK9a-Nzy3dgeU3MyICX4/edit?usp=sharing

Given the study I’ve conducted, along with reading other trusted market pundits (NOT anyone who’s on CNBC), I think it’s safe to say that while 2015 presents its fair share of risk, there are plenty of opportunities to profit. Below are some of the ETF’s I’ll either be watching closely or have already invested in:

– EEM (Emerging Markets)

– TLT (20+ yr Treasury Bond)

– DES (US Small Cap)

– PSCF (US Small Cap Financials)

– PMR (Retail Powershares)

– CORN (Corn ETF, Commodity)

– JJG (Grains ETF, Commodity)

– EWGS (German Small Cap)

– RSX (Russia = high risk, high reward)

– BNO (Brent oil = high risk, high reward)

– GRK (Greece = high risk, high reward)

Other Buy Lists worth watching: 

– https://www.motifinvesting.com/motifs/crossing-wall-st—eddy-elfenbe-Zrsb0evv#/overview

– https://www.motifinvesting.com/motifs/william-blairs-picks-for-2015-w1Ktlu43#/overview (full list here http://www.streetinsider.com/Analyst+Comments/William+Blairs+Top+Stock+Recommendations+for+2015/10077925.html)

Go to the Google spreadsheet to view the nine ETFs/sectors I’m wary of in 2015.

As for a year end price target for the S&P 500. I honestly haven’t had time to finish my analysis, but the risk/reward for the US is definitely skewed towards the downside, which is why many of my buys are outside of the US. >90% of the time, the monthly return of January is indicative of the return for the year (positive January, positve year, and vice versa). Last year January was negative, but we saw a ~12% return. Generally speaking, I think this could be a great year for stock pickers, much like last year. Although this year I fear a larger, more prolonged pullback. Not because of a recession, but due to a highly valued US market and opportunities elsewhere.

Napster, Uber, AirBnB, and Bitcoin VERSUS Regulation


If you have Netflix and are a 90’s kid, watch the documentary Downloaded. The Napster documentary takes an interesting look into how a technology (peer-to-peer file sharing) single handedly brought the music industry to its knees. While watching it, I couldn’t help but think of two things: 1.) Shawn Fanning is the man (founder of Napster) 2.) several other industries are experiencing the same level of disruption today (taxi industry – Uber, hotel industry – AirBnB, and I would argue the financial payment industry – Bitcoin).

To give some quick background, when Napster came around, it was the music industry and its constituents that refused to understand and embrace the technology, and instead decided to sue the technology to high-heaven. This ultimately led to the downfall of Napster within two years of its humble beginnings, where its community reached as many as 60 million users (ridiculous). The music industry was colluding, i.e. all major labels were price-fixing the price of CDs at $15. It was the failure of an industry to innovate and diversify their business models that caused this technology to hurt revenues so much.

Now to today, all of the recent legislation and legal battles that this new wave of startups is facing, is similar to what Napster went through. Granted, technically, people were stealing music through Napster, but, the technology itself (peer-to-peer file sharing, decentralized file systems) was able to scale and could have been repurposed for a more legal use. The taxi industry, in one municipality or another, is fighting to keep Uber out. They are always finding these laws that have been setup over time that in some way shape or form make taxi-like services that aren’t sanctioned cab companies illegal. (Side rant: two reasons I despise our government. Too many laws; solution: for every law that we add, we get rid of another. Laws that are too protective of industries that disincentivize innovation. Technology is our friend, not our enemy). I feel like Uber has fought its way through a fair amount of regulation, legally, and will thrive.

The others AirBnB and Bitcoin are still in their infancy and possibly their first iteration of their service. The documentary brings this fact to light, where, although Napster failed, many copy-cats and enhanced legal versions of the technology popped up. Despite Napster failing, the technology and service survived, and ultimately thrived over the next decade (i.e. Spotify, Pandora, etc.). Despite the diminished success of AirBnB and Bitcoin, relative to Uber, don’t think that the technology will go away. Other startups will iterate and learn what worked and didn’t work for AirBnB and Bitcoin, and create a product that works. (Side note: I feel AirBnB will be successful, but it has much more legal mumbo jumbo to fight through, and ultimately change. Bitcoin is the wave of the future, yup.)

 

Today’s Unemployment/Underemployment Is Not Driving the Growth of “Uber for X” Companies


I ran across an interesting article on Bloomberg where the columnist argues that if it wasn’t for today’s “unusual” unemployment/underemployment (underemployment is where people are over-qualified for their current jobs), startups like Uber, Lyft, Instacart, Postmates, etc. would NOT have the large network of drivers that allow them to deliver quality on-demand services, thus driving their growth and valuations.

It’s absolutely insane to me that anyone can make this argument with any type of credibility. If the logic of her argument were to hold true in other recessions, she is saying that if these contract jobs were to have popped up then, these startups wouldn’t have survived. It’s ludicrous to think that if Uber would have existed in the 60’s, 70’s, or 80’s, that no one would have signed up to work for the company. I’m a firm believer that the American workforce will gladly do these “side-jobs”, especially when there is little to no qualifications barring them from making the extra side-cash. What makes these types of jobs extremely attractive for the long-term, and this isn’t just a fad as she concludes, is that workers get to utilize an asset (their car) that would otherwise be idle and costing them money. Irregardless of whether this is a historic time for underemployment or not, Americans will always be looking to make more money to pay for that extra something, fill a void of unemployment, or make ends meet more reasonably.

Coming from a tech startup, I may have my own biases, but ignorance shouldn’t be allowed in mainstream media. When non-tech people claim that an idea/company won’t work, it makes us tech people work that much harder, and more times than not, that same naysayer is singing that company’s praises years later.

Finding The Answers in Big Data


Ah, BIG DATA. In the last few years there haven’t been bigger buzz words than those. If you haven’t heard of it, then I hate to break it to you, but everyone and their mother have been talking about it, look at the Google searches over last ten years.

2014-08-26 21_31_01-Google Trends - Web Search interest_ Big data - Worldwide, 2004 - present

Working at an artificial intelligence startup, we’ve seen our fair share of clients/prospects looking for an alternative to all of the dashboards out there (Tableau, Domo, etc.). With these dashboards (just a fancy word for all of the data and charts about your business on one screen), they don’t scream at the user what they should know, or what business decisions need to be made next based on all of their current data. It takes interpretation and people are afraid to get the answers wrong.

As we continue on this path of “sensor-ized everything”, people and businesses will be able to collect more data on themselves and about others, to possibly influence decisions. Regular consumers with their FitBits and businesses with rewards cards and cookies in their websites; all of that data is now at their fingertips, but the question is, how do we turn all of that into actionable items? But more importantly, the correct actionable items?

Today companies are working to figure out how to interpret all of this new found data and how to act correctly upon it. Sure, you can throw all of the correlations, relationships, and other fancy stats at these new data sets and find which one leads more directly to increased sales. But the funny thing is, there is rarely one answer to this question. What people need are instantaneous perspectives and explanations as to what all of this means to their business without having to interpret the correct answer, and to have those explanations change as the data changes, to better help businesses understand the current state of their business.

The way I see it, there are a couple of answers to the “big data” problem:

1.) Businesses need tools to not only aggregate all of their old and “new” data, but a way to communicate that data, and its every changing properties. The only way to do that is through hiring people to dig into and communicate all of this data. But that is hardly feasible, given the capital needed to hire the necessary talent. That’s where artificial intelligence comes in.

Now, let me rant a little bit. Artificial intelligence can mean numerous things, and it means something different to everyone. “Deep learning” is one practice of AI, “machine learning” is another. People associate “algorithms” with AI. Heck, you could even classify the first chess program that beat a person as AI.

What’s different about today’s AI, however you want to classify it, is it can begin to understand the outcomes of it’s analysis and communicate it. That’s where Narrative Science comes in. When the world starts collecting more data, businesses should have systems/applications in place that allows the data to speak to us, instead of employing more resources to look at dashboards to give us the same insight.

Oh, and the second answer to “big data”, in my opinion, is good ol’ common sense.

Listening to the Masters of Wall Street


Recently I stumbled on Bloomberg’s new podcast series, “Masters of Business”, hosted by Barry Ritholz. I usually write these posts to pass along some financial tips, explain my view on the market, or tools to manage your retirement savings. But this podcast series is surprisingly easy to understand, and is great for n00bs to finance, or finance geeks. I highly recommend giving each of these a 30 minute listen. I’ve put my highlights/valuable lessons below each. If  there was one over-arching theme, it’s that some of the most successful Wall Streeters didn’t know even know what a stock or bond was, until their late 20’s. Then with a little discipline and willingness to learn, they were able to become multi-millionaires/billionaires.

Jack Brennan (CEO of Vanguard)

Professionals win with ease, amateurs win by reaking havoc

Active investing (most mutual funds) vs. Passive investing (ETFs) – Wall Street always “hopes” that hedge funds will beat the market, but that’s turning out to be very difficult, even with hedge funds have the “smartest men in the room”. All pointing to very little reason to invest in mutual funds/hedge funds, especially with fees.

Single biggest change in finance/Wall Street over the last 35 years – passive investing options (ETFs). Today, there are  ETFs available for people to implement low-cost and outstanding investment strategies/programs

Decent financial advisors are worth 2-3% of fees a year, but if you knew nothing else about funds and picked the lowest cost funds, your odds of outperforming (net of fees) are radically in your favor

Mike Mauboussin

Active fund managers are necessary for the market, but that doesn’t necessarily translate into beating the market consistently.

The three things to learn from successful investors:

1.) Have a very defined investing process and stick to the rules (never breaking them). Focus on process, not outcome

2.) Think long-term (trade less frequently)

3.) Believe that they have an edge (for example, investing in the least loved asset classes every year)

 Jeff Gundlach (More advanced, for the finance geeks)

Tesla’s reinvention of the battery space could radically change how we live. The battery that powers Tesla, could end up powering your home, removing the dependency on public utilities.

Sentiment is a very powerful trading tool

Why We’re Not in a Tech Bubble – “The Tech-Only Argument”


There has been a lot of talk over the last year or so over one simple question, are we in another tech bubble? There are pundits on both sides making their cases, both tend to have valid arguments.

Coming from a tech enterprise startup, I tend to lean on the side of “No. We aren’t in a tech bubble.” For a handful of reasons; I could write a dissertation on this, but for now I’ll solely focus on technology, as opposed to including my views around valuations, exits, and funding levels (i.e. the investment environment around startups).

1.) When I was 10 years old (late 1998), I bought an MP3 player, one of the first of its kind. This was back in the day when I had to Google (back then it was Yahoo! or Lycos) for Mp3’s. Guess what the storage size on this thing was (pictured below), and how many songs it held? 32 megabytes, that would hold roughly 12 songs (depending on the compression/bit rates). I paid $200 to be  the first of many to have the songs I wanted to listen to on a portable device, and most importantly, a device that doesn’t skip. That was right around the first tech bubble, which was made up of Geocities websites, 32MB MP3 players, and Lycos was the top search engine. I think we all can argue that the landscape has changed for all tech products/services since then. Which leads me to my next points.

done-rio-pmp300

2.) This is a mind-blowing stat, “In 1995, the average cost per gigabyte was $1,120. Last year it was $.05. 22,000X+ improvement in 2 decades will change a lot of things.”

3.) We didn’t have PCs in our pockets back in the late 1990’s/early 2000’s. Sure cell phones might have been on a meteoric rise, but smart phones were not existent. Just think of all of  the industries, companies, and jobs focused solely on fighting for ad space on your phone’s screen; or way that you interact with your friends that a PC never could (Snapchat, FaceTime, Uber). I remember I used to dread trying to stream a video online and would usually go eat dinner, then by the time I was done, it would be loaded so I didn’t have to wait for it to buffer.

4.) I also firmly believe that the general public and investment community’s understanding of technology’s power greatly lags where it currently stands. Back in the tech bubble, there was  a great focus on technology hardware, as opposed to software. At the time, people were able to get their hands on technology, and now the advancements in power is being burdened by software companies in the cloud, and are intangible to the end user. For example, you don’t need a new device for each app on your iPhone. These companies are taking on the computing power and distilling the information down to something consumable, in one ecosystem (Apple/Android). My point is further validated by the illustration below which shows the amount of business investment in hardware vs. software since the tech bubble.

BsS3C1mCYAI7NIm

 

5.) I bet we can call come up with our “back in my day” moments with technology. But in efforts to keep these posts a fairly short read, I’ll keep it at five reasons, and will leave you with this (from PandoDaily). Each generation is shaped by defining moments, like the tech bubble. But we can’t let those past events cloud our judgement in the future.

Here are some facts about our incoming 9th graders… the class of 2018!

  • Incoming high school freshman were born in the year 2000 or 2001.
  • They were newborns when Wikipedia was formally launched.
  • They have lived [entirely] in a world in which monthly texting limits do not exist.
  • They were toddlers when MySpace was launched. They were about to enter Kindergarten when it was acquired by News Corporation for $580 million, and were rising 5th graders when it was sold again for mere $35 million.
  • They were in preschool when Facebook moved to Palo Alto, CA.
  • Some of them were born the same year the first Apple store opened.
  • They have been alive for 3 (maybe 4) Harry Potter books.
  • They do not know that “Blockbuster” was a video-rental place.
  • If they pay attention to the news, all they know about Clay Aiken is that he is running for Congress.
  • Paris Hilton was never popular.
  • The Spice Girls are middle-aged British singers.