So many interesting ideas

I spent some of my morning today watching interesting documentaries on youtube. There is one channel, called Freethink that covered a variety of great topics that innovative people are working on. I really enjoyed watching these videos covering topics such as solar concentration, vertical farming, satellite hacking, modular buildings and more. 

I just haven't had the time to think about basic problems in different ways recently and found watching shows about these topics to be really mentally refreshing -- there are just many different interesting problems / topics out there with fascinating nuances that are just waiting to be explored. I really do think there should be a place where people can spend with the right tools and implements to research topics that are interesting and have the right people around to drive a project forward. People that are working on these things are inspirational to me and the discoveries and results that they come across is a result of persistence and spending time on a topic. I think I'd like to spend more time working on these kinds of projects and fostering the right kind of connections to inspire creative thinkers to put things together.

There are more youtube channels out there with fascinating makers working on interesting projects out there that I have been following. Perhaps I should spend some time to write down ideas on interesting topics from them and spend more time exploring these topics in more depth.

And also, I should get back into writing again.

On Writing Content

The strange thing about the creative process is that if you start off with something that is too large, the mind goes blank. I've been thinking about the kinds of apps that I'd be interested in building and simply the sheer number of topics that come to mind drives me in to paralysis.

Topics such as:

• How am I going to deploy the application
• What should the design look like
• What design technology should I use?
• Vue, React, Angular
• Bootstrap
• Django, Aiohttp
• etc
• Are the design models right
• Is the application useful

And more are the kinds of questions that come to mind. Mastering any or all of these things are time consuming. For doing anything app wise, I think at first, don't worry too much about perfection on the first try. Start with something simple and go from there. Once you understand the frameworks, things will come together a little faster.

Especially for things like a webpage, writing content takes some time and I really think the key to building something is really about generating a corpus of content over time then to have the opportunity to deploy it out there afterwards.

What does the future of electronic payments hold?

I've been looking at electronic payments recently. Visa and mastercard charge merchants on the order of 2.5 ~ 3$ for a transaction. Why should there be a cost related to using cash? The concept seems silly when compared to using coins and paper (plastic?) when making transactions.

I took a look at some online payment processing systems instead to see the associated costs related to using online payment systems and came down to the following summary based on a cursory search:

Company	Fee	Transaction	Fx Fee	Comment
Stripe	2.90%	0.3		On Send
Paypal	2.90%	0.3	2.50%	From Credit card only and in US
Skrill	1.90%			Capped at 20 euros
Alipay	0.7 ~ 1.2%			Chinese accounts
Alipay	2.5 ~ 2.5%			Foreign accounts
Wepay	2.90%	0.3
2Checkout	2.90%	0.3		More for other countries

What has surprised me is that most online payment platforms do no better compared to the standard Visa and Mastercard transaction rates. The only companies that seem to be offering better deals to consumers are Chinese payment systems for Chinese users with far lower rates.

I would surmise that the increase in usage is the result of the lower transaction fees.

Of the online payment providers, their businesses seem to be solely based on transactions instead of providing any sort of banking functions. I am quite certain that there are costs related to transferring money in and out of these payment processing systems and banks adding into the operational costs of these online payment processing systems.

Another interesting surprise is the lack of integration of online payment systems with banks which could make storage of money versus the spending of it far more frictionless.

I see some interesting things in the future, one for the fact that Sweden and other Nordic countries are moving towards cashless payment systems. I think the next step in this process would be for governments to legislate and create infrastructure for this to happen. Once this does happen, I believe it would be the biggest competitive killer in the current payment processing environment.

Experimenting with the Long Short Portfolio

Since June I've started with experimenting with the "long/short" portfolio where cash is deployed to buy companies that I have some potential upside and short companies where there is a good amount of down side based on fundamental analysis.

My screens so far have found very few good companies to buy where as I've found far more companies since over the summer period (June to August) where were my (albeit crude) models have indicated that they were over priced. It is interesting to see that the over market trend since over the summer has pushed the price of many companies downwards to the point where many companies that were over valued somewhat more in line with the prices where they should be (or to the point where betting against them is certainly not worth the time).

Interestingly, integration of the models applied into mid-long term trading decisions have shown positive results sine mid-June. The long positions have generally kept the portfolio flat where as going against the worst companies have yielded the biggest returns due to the risk off nature of the markets that we are seeing of late. The portfolio currently stands with close to a 50%-50% split between long and short positions.

The plot below shows a good negative correlation with the market, especially with the worst companies bringing in most of the gains (performance in purple).

When will be the right time to start rebalancing the portfolio? I am not entirely sure just yet, I still think there is more downside action to occur. Only time will tell, in the mean time--more time needs to be invested to developing better valuation models.

Not a whole lot of value in the markets

I've been looking at the markets recently and I just haven't been finding all that many good things to buy recently. I've got a few long positions in a few companies have looks to have good fundamentals but my biggest wins have been coming from taking short positions against companies that I think have significant down sides. 

Companies that I think are over values at the moment are SHLD, NAV and ADRO. Been holding these positions for a month now and they've been paying back significantly well. Will be looking for more down side. There are a few other companies that my scans have been piking up with decent down side and they've played out exactly as I've been expecting over the last few months.

It's earnings season right now so it will be interesting to watch how the markets react to earnings and updated growth rates of the companies in the market.

Not sure what is going on in the market

Something interesting is going on with the markets right now and it's throwing off stock prices dependent on the following inputs:

• Revenue
• Operating Expenses
• Total Assets
• Total Liabilities

I've gone through all sectors and did a linear regression by sector to determine the coefficients to be applied to each sector and got the following results:

Sector	Revenue Coeff	Operating Exp Coeff	Assets Coeff	Liabilities Coeff
n/a	1.757951413	-1.685802435	1.058985395	-0.940065628
Consumer Durables	-0.316979969	6.198310777	1.4757337	-1.411166774
Transportation	0.497272033	0.259618616	2.065928424	-2.076496214
Finance	0.87978465	-0.949490282	1.184012636	-1.179976195
Public Utilities	0.016493317	-0.665229136	0.835269278	-0.289090479
Energy	0.065892306	-0.669861102	1.582121055	-1.317696686
Miscellaneous	-0.750867391	8.027392438	2.88486087	-2.435433498
Consumer Non-Durables	-0.038891497	3.787788767	0.218961592	0.294737121
Health Care	0.128296602	-0.299308471	4.758685759	-4.904842854
Consumer Services	0.871313342	1.681460089	0.910108808	-0.729311004
Basic Industries	0.495887515	2.285893733	1.239013616	-0.80046736
Capital Goods	0.498509342	5.692384963	0.648907514	-0.513628997
Technology	-0.528505482	6.342940229	2.070839539	-2.050838295

As expected we see the following obvious impacts:

• Assets impact stock prices positively
• Liabilities impact stock prices negatively
• Revenue, generally impacts stock price positively
• The operating expense coeff is erratic

As of this moment I've focused on companies that have a capitalisation of over $5B using closing closing stock data from 2015-07-01 from the US markets.

I'll next need to run calculations based on more historical data to see how these numbers have evolved over different times during the market. Computations done earlier this year have yielded more consistent results with the revenue coeffs and the operating expense coeffs showing consistently negative values.

I have a feeling that current market situation are throwing off the linear regression algorithm. 

Experimenting with living life as a digital nomad

Call me old fashioned but I've always been a desktop PC kind of person. My main workstation at home is a custom built system with a decent CPU, ample of hard drive space and a pair of monitors (one of which being a "retina" style right resolution monitor). I've always enjoyed using my PC at home but I'm generally far less productive when working from home. There simply are too many distractions at home-- the bed being near by beckoning me to take naps, the fridge stocked with good food to snack on and the comfortable chair that I sit on at home which entices me to relax (which include watching videos and listening to music instead of doing something productive). Also humans are creatures of habits and I've simply lost the habit to do any sort of productive work at home. Home is where relaxing happens.

For the last 3 years, I haven't really used a laptop since I never seemed to have good experiences working with them. They ended breaking down after 2-3 years of use and being caught without a PC for weeks while the laptop is in repair (not to mention the high price of repairing them) had led me to start using desktops instead which overall have far better bang for buck in terms of performance and are cheap to repair.

I've had the pleasure of using a 2008 MacBook Pro for the last 3 years. The only problem with this laptop is that the battery only lasts for 2 hours, leaving me with a brick of aluminium after the spirit leaves the battery. Interestingly enough, I went to a programming conferree last year and was the only person that switched to using pen and paper to take notes after the juice on my laptop had died. How times have changed... and how I've not kept up with laptop technology.

After much waiting (mainly because of the production delays for the new low power CPUs that Intel was building and that Apple had intended on to use in their refreshed brands of MacBooks and MacBook pros) I've finally shelled out some significant cash to buy myself a new MacBook pro.

With spring conducive to hopping on the bicycle to head out to new places. I've started exploring the city again with the laptop stashed in my backpack, hitting small cafes along the way. The change to working in new environments and then changing them whenever I feel like it is great. Done with the coffee somewhere and need to stretch my legs? Just hop on the bike and head to the park. Have an idea or something that I want to work on? Find another cafe and buy a coffee and work away.

This is exceptionally wonderful when the weather is good. There are some challenges however: 

• Not all Wifi connections are good
• I've run into subnet collisions when using my VPN (meaning I can't connect to some resources at home)

Other then that, I've found a few nice cafes to work out, check mail, communicate with people and generally enjoy the outside. Getting out of the house is a wonderful thing and I highly recommend it to everyone that has predominately worked at home or in a normal office. It might not work for everyone but it's something nice to try.

Later on when I figure out how to post pictures from my iPhone in to this blog then things may get more interesting in the future (well that is what Facebook is all about right?).