Karl Smith makes an interesting point.
a world in which gains are being created in ways that can be captured is not necessarily a world in which the poor benefit from those gains.
I like this characterization. I’ve been convinced that patents and intellectual property are not sacrosanct. Continue reading Innovation is Execution… Episode #2918
Flowing data points out this neat chart from Very Small Array
First conclusion: movies are getting worse! Damn Hollywood and its crass blockbusterism!
Michael Mandel has convinced me that we don’t measure the contribution of outsourcing properly and, if we did, GDP in outsourcing-heavy industries would be revised downward.
The problem is that our tools really struggle dealing with rapidly falling prices for intermediate outputs.
Ok, let me see if I understand this. Continue reading Outsourcing Is Complicated
Here is Celent writing about data and coordination, which I think boils down to the idea that IT is gradually becoming a core skill of other business functinos.
I think that’s right. I also think that IT progress can be categorized. Continue reading Coordinating Data
Blue dots are the optimal locations of High Speed Trading infrastructure for a particular combination of trading exchange locations (red dots).
I know that first impressions matter and that you can learn some surprising things from someone just by looking at them.
What I don’t know, though, is what people think of me when they first see me.
Remember hotornot.com? It would be interesting to see such a site that rates people on some other dimensions: likability, trustworthiness, aggression, psychopathy.
And imagine tracking a group of people over time in a panel study?
I bet you’d get a good feel for social mobility over time, too.
Forget income data!
I went to a talk today by John Paulson who has a big bet out on gold.
His logic:
1. inflation is related to money supply (proof? He never mentioned Milton Friedman for some reason)
2. Gold is related to inflation
3. Money supply is increasing, therefore gold will go up
I want to look into it some more, but judging by the graphs in his fancy pamphlet here (take my word for it), there wasn’t anything like today’s spike in the money supply during the last gold run up.
And, um, there isn’t any inflation today.
So has something changed?
Again, I want to do a bit of research here but the short answer is… who knows!? Who cares!? He has a gold fund and it’s up 60% or something.
Take your fancy pants ‘analysis’ and go write some blog posts about it, Poindexter. Those boys might even read it on their way to the bank.
I recently listened to an interview with Hal Varian, wherein he advocated a common view: the importance of statistical analysis is increasing and it isn’t likely to stop soon. Organizations and individuals should therefore concentrate on improving analytical capabilities to stay ahead of (on?) the curve.
I’m on board only with a very specific version of this view. Since routine tasks can be automated, the only part of a statistical analysis that is really ‘hard’ is the pre-analytical part: sourcing, verifying and scrubbing the data. Once you have a crisp and polished database, the conclusions often leap off the screen.
Hal has an interesting way of describing competitive advantage:
[Having a] scarce factor of production that is highly complementary to something that is ubiquitous and cheap.
It’s extracting something that we can recognize as data from the mess of everyday life that is the real skill.
Over to Europe, where the courts just destroyed a reliable dataset for auto insurers, who now can’t rate policies based on the gender of the driver.
Now, gender is an awesome data point: it’s easy to record, hard to fake and damn good at predicting outcomes.
The problem with it is, of course, that correlation and causation aren’t the same thing. Male-ness may be correlated with a bad driving record, but it isn’t causing it. Besides, within reason, once a guy, always a guy. Where’s the incentive for de-risking dudeness?
As I read it, the courts are implying that insurers should only rate on causation variables, because then you’re rewarding or punishing for actual changes in risk.
I can see logic in that.
Much has been said about this.
I’d say the most notable take-away from this disaster is the awesome achievement of the preparedness of the Japanese for this kind of thing. I read somewhere that earthquakes you can FEEL happen almost every day down there.
If any country can take a right hook from Planet Earth, it’s Japan.
Professionally, I do very little Japanese business, so I don’t have an awesome intuitive feel for the market reaction here. The quake was a monster, possibly as high as third all time, depending how how the measurement revisions go.
And that’s the most important point, I suppose. Quakes are notoriously hard to get a handle on quickly. The property damage can take literally years to uncover (think cracked foundations and leaky pipes).
Throw in a wonky nuclear plant and extant flooding from the tsunami and it’s a big fat question mark.
But these people don’t buy too much EQ insurance (it’s pricey and they feel pretty prepared), so I’m pessimistic about the damage to the marketplace. April 1st is a big renewal date, particularly for the Japanese covers.
It won’t take too much internal finangling for the ex-US folks to wrestle some capital away from the dead-in-the-water US casualty market.
I think of the insurance business (and banking for that matter) as a process-driven technology industry, like manufacturing.
We have a very similar value chain, with engineers pulling costs out of the system and slowly tailoring products to peoples’ uses. Over time, the systems employ fewer, more skilled people and the products become ever more commoditized.
Value and innovation are not revolutionary in these businesses, but incremental, and brands are a key differentiator among the otherwise indistinguishable elite few operators.
The most powerful in the business are those most gifted salesmen that can make a commodity feel less like one, all while quietly making it more so.
Not Unreasonable 