Sunday

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.

Advertisements

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.

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.

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.

 

 

Stock Market Update: Locating the Nearest Exit


I had a post two months back that highlighted how I was worried about the health of the market. Well, that view continues and my assumptions have been correct so far. The one addition I would add to that post, in which I discussed how few stocks are participating in these new highs, is that there are fewer stocks participating in the all-time highs. On top of that, most of the names that are holding up are large caps, whereas small/mid-caps were leading up until the end of 2013. This is usually a tall tale sign that the market has gotten too risky to be in “speculative” names and participants are “hiding” their money in “safe” large caps. To top this all off, volatility has been extremely low, and I’m sorry to say, but historically, these long/low volatility periods don’t last for long. Just like the small/mid-caps have gotten crushed in the past few months, I’m expecting large caps to do the same. To dig further into why this divergence in large caps and small/mid-caps is disheartening, read this brilliant post. To highlight, an old client and good friend of mine, Craig Johnson, does a great dissection of why what we’ve seen over the last few months, historically bodes to a large pullback, usually 15-20%. You’ve been warned!

My prediction was a choppy/poor performance through the end of September, then Q4 the market would finish with a rally. At this point, I still stand by that prediction. To position myself to take advantage of that prediction, I’ve increased my positions in TLT, XLU, XLP, GLD, UUP, and SH.

I haven’t left the building, but I’ve identified where the nearest exits are.

“The continued divergence between the Russell2000 index and the popular large-cap indices (DJIA and SPX) is a clear indication of weakening breadth and slowing momentum, and suggests investors are making an attempt to reduce portfolio risk by rotating assets toward the traditionally defensive area of the market.

To gauge the size of a possible decline we have identified years where the DJIA outperformed the RUT (a strong possibility for 2014), and measure the size of the market pullbacks that occurred in these years…..Thus, should the median pullback unfold this year, it would suggest a deeper correction in the broader market back towards 1,600-1,650 on the S&P500 Index.”

My Latest Stock Picks…..Q1 Update


With Q1 coming to a close, it’s time to figure out what’s going on in the markets and where might be some good places to be over the next 6 months.

The markets have been choppy year-to-date, but have managed to hit new all-time highs in the last week or two. The particularly discouraging part of the new all-time highs was that not very many stocks made their own new highs. Meaning this all-time high is weak and only a few stocks pushed it to these new highs. That’s NOT good.

And there are some bubbles that are forming (man do I hate that word, “bubble”). In particular, IBB (a Biotech ETF) has been pushing the NASDAQ to all-time highs. Volume in penny stocks (stocks under $5) have hit a high since the tech bubble in ’99/2000. Below is a checklist that I saw in the Wall Street Journal a while back. I’ve been updating it as this bull market gets older. Hopefully by my holdings you’ll notice I’ve been getting more defensive, out of high-growth tech and in broader ETFs and more defensive names. My latest moves have been into TLT, XLP, and EGPT. For me, I’m starting to get defensive for 2014, hopefully by 2015 we’ll be back to 2013 returns. My price target on the S&P 500 for the end of the year is 1,925. Assuming a pull back over the next 6 months with strength returning the end of the year. Momentum is starting to turn negative, leading to the pullback in the near-term.

2014-03-25 20_37_32-Scott (kohl_in_one) on Twitter

Current Holdings:

Ticker Price Bought
BRK/B $76.22
XLB $42.03
XLK $33.14
WDAY $106.71
AAPL $460.88
JCI $37.50
V $183.12
TCPC $15.12
EBAY $54.46
DDD $54.55
SPY $182.05
XOM $95.47
SH $25.10
XLP $42.05
TLT $108.02
EGPT $70.01

Move out of these positions over the last few months:

– Sold GDXJ – Junior Gold Miners ETF – Liked this play in the fall, and starting to like it again.  If markets stall and/or tank in the next few months (which I think is possible), I might be in this again.

– Sold DTYS – Inverse 10+ Yr. Yield – I like this play over the next 15 years, but in the short term, not going much of anywhere.

– Sold YHOO – Yahoo! – Took my nice gain and cashed it in. Also, all of Yahoo! acquisitions seem to be fruitless thus far.