There are plugins coming out for tools such as GPT-3 for Figma, a prototyping wire-frame, where anybody can type in what type of screen he or she wants, and that screen will automatically create a user interface. The future of the world will largely revolve around machine learning, and this may change most UX designers to become graphic designers. It looks like GPT-3 for Figma will be coming out sometime next year, and as of now, it looks like the tool will be a commercial subscription. We posted a video, but this video is credit to Jordan Singer, and this tool is not yet available to the public, but it's interesting to imagine what the future holds of the economy, due to automation. Lastly, we do believe that this is the very definition of disruptive innovation.
Were About To Find Out.
Thursday, September 9th, the Kansas City Chiefs host the Houston Texans on NBC in prime time. This will almost certainly break records for betting activity on a Week 1 NFL game. But will it last?
We know that growth in active trading has been explosive, fueled by startups like Robin Hood and the elimination of trading commissions by the bigger brokers in the Fall of 2019. Trading has never been simpler or easier.
In the first half of 2020, Robin Hood accounts grew by 30%. With new-to-the-game investor favorites like Tesla, Zoom, and DraftKings doubling, tripling and more in the past 6 months, and charts of the SPY and QQQ resembling the old Price is Right “Cliff-Hangers” game (https://www.youtube.com/watch?v=bWEGNe104To ), the average new retail investor/trader has likely had at least some positive trades and is feeling pretty good about it.
And without all of those commissions, day-trading, or at least short-term trading is no doubt looking pretty attractive relative to sports betting as a place to get some action. For most NFL bets, whether with a casino, online sportsbook, or your Uncle Larry’s business associate, you generally bet $110 to win $100. If the sportsbook takes in $110 on the Chiefs, and $110 on the Texans, the guy who picked the winner (including the point-spread of course) gets $210, and the sportsbook keeps the extra $10. Over time, when you pay that 10% commission on losing bets, it means you need to win more than about 52.4% of the time to generate positive cash flow. Most bettors don’t do that well long run, so they either accept that they enjoy the game, like the action, or kid themselves that they make money through selective memory.
Meanwhile, anyone with an E*TRADE account gets an easy peek at their balance and which trades made money. You can forget about all the times the Jaguars or the Bears have disappointed you, but every time I login, I can see that GE stock is worth nothing close to what I paid for it. Though opening up a chart on Tractor Supply Company (TSCO) cheers me right back up.
We know that some of the football betting regulars are crossing over. Outspoken Tweeter and sports betting guru, David Portnoy (founder of Barstool Sports) has made multiple appearances on CNBC’s Mad Money with Jim Cramer, and DraftKings is now running commercials during that show.
Is stock trading a substitute for betting in the NFL?
The NFL gets the largest share of sports betting action. Academic research finds that baseball betting is a substitute for betting on NFL games (https://journals.sagepub.com/doi/abs/10.1177/1527002511417630 ). When the NFL season starts, even the preseason, betting activity clearly declines for baseball as it grows for football. In author Gary Mayer’s true story of life as a bookie, (https://www.amazon.com/Bookie-My-life-disorganized-crime/dp/0874770238/ref=sr_1_1?dchild=1&keywords=bookie%2C+my+life+in+disorganized+crime&qid=1599692442&sr=8-1 ), he explains that he only handled baseball bets to keep his football betting clients active until the next football season.
The football bettors want action. This Thursday night, they’ll get it. With the double-stuff mustachioed Andy Reid and the Kansas City Chiefs, and a Las Vegas betting total of 54.5, this should be a high scoring game with plenty of fireworks.
Will the bettors forget about trading stocks?
I doubt it, but there will be some trade-offs. If the NFL keeps everyone healthy and the games are good, I’m predicting a dip in the Monday morning trades. Some of their attention and the need for action will once again be met by the NFL. If the market keeps going higher, NFL betting/viewing may lose some steam as people focus their attention on making money in the stock market. However, if the markets hit a rough patch, with a sustained downward trend this Fall, NFL betting and viewership will be stronger than ever. I’m rooting for good games and a strong market, but no matter what happens, there will be some tradeoffs between sports betting and stock trading.
- Dr. Weinbach
Everybody should look into how to obtain his or her lost funds from their local state. What we did here was go into https://ouf.osc.state.ny.us/ouf/, and believe it or not, we received a few hundred to a few thousand dollars per occurrence. The next interesting thing one can do with real estate, is to grieve property taxes every year. The next step is to hire a property tax attorney on a contingency basis. If the property tax attorney wins for a given tax year, the owner of the home will be responsible to pay the attorney 50% of tax winnings. Some properties we have tested have had property taxes reduced by about 50% or more. It's important to grieve property taxes every single year, as no payment is owed if the property tax attorney doesn't win. Please note that we do not receive any financial incentives for recommending this law firm, but we have had several success stories by using heller tax grievance.
Many organizations have issues in regards to how technology is currently managed. One perspective firm's should keep in mind is that always using the latest technology could be an issue because the labor associated to that technology is expensive, there is a short labor supply, and some of the older systems may or may not work with it. On the other hand, if one uses the oldest technology, technical debt will build up, there could over the years be a short labor supply to service that technology, and it will be expensive to replace. Most firms should follow the reversion to the mean approach, which is regarded as a methodology coined in capital markets for statistics, but can be used across all industries. This means that use average technology associated to the business problem because there is ample labor available, it's not too risky, and easy to maintain. The question should always be is this specific technology needed? Who will support it? How much will it cost? How much will my firm profit on? What business features are obtainable in this technical solution rather than other technical solutions? As always keep things simple, and business driven.
As always, we begin these posts to read the legal disclosure for any posts in regards to investments on our insights page. With interest rates for loans being close to 2.5% for a 30 year mortgage, one may be wondering where is the best place to invest right now? If you read how to minimize portfolio volatility, one can see Investment Science made a good call on bonds when the market tanked. According to Investment Lab, the best place for investments right now is commercial real estate, especially in NYC, and converting that into residential property. As Baron Rothchild once said, 'Buy when there's blood in the streets.' Investment Science feels that NYC will recover, but our firm does not know the exact year, and people always will need a place to live. Buy low sell high!
We're not sure if this holds true across all states, but the cheapest insurance rates we were able to find in NY were from Esurance. Please note that anything we suggest on this insights page, we do not receive any financial incentives from any individual or company. It is vital for one to understand that while Allstate owns Esurance, Allstate typically cannot beat Esurance rates because Esurance is all online. Lastly, some factors that impact car insurance rates are your occupation, credit, location, policy option, car make, car model, age, marital status, gender, education level, driving record, and most importantly claim history. We do recommend that each and every individual takes the defensive driving course, as one can receive 10%+ off of their yearly premium for about three years. Does anybody know where to obtain the best insurance rates? We have literally called hundreds of places and nobody could beat Esurance in the state of NY.
Too many consumers are relying on the wrong sources to obtain residential mortgages. Luckily for you, Investment Science, has the website to obtain the very best mortgage rates. Please note that if you do use them it could take an extremely long time, and you will be your own broker providing your own paperwork! However, once it's finished it's finished. We have done three transactions with this firm, and have not had any issues outside of slowness. What's very interesting is that money right now is close to being free! However, whenever rates are good, it usually means some type of economic disaster such as hurricane sandy, the financial crisis, or coronavirus. We will end with it is an excellent time to take on debt or refinance existing debt.
Our lender of choice is aimloan, and note we do not receive any referral fees from them, but did all of the shopping for you from past experiences. If anybody knows of a better firm, please comment here, and we would be interested in investigating this. Lastly, if one is uncomfortable with an online lender, at least print out the rate sheet and see if your lender can beat it.
Correlation is a bivariate analysis that measures the strength of association between two variables and the direction of the relationship. In terms of the strength of relationship, the value of the correlation coefficient varies between +1 and -1. A value of ± 1 indicates a perfect degree of association between the two variables.
There are many things one can do with correlations of stocks in a portfolio. Ideally, every security one adds would not be related. Unfortunately, if you read how exposed are you in the next stock market crash? You will see just about everything moves together during panics because investors move into cash. Also, if you read limitations of financial models, you will also understand that most stocks are actually not normally distributed.
Whenever correlations are measured, typically a 3 month rolling moving average is computed. For the purpose of this exercise, we just took a basket of securities, and calculated three separate correlations over one year.
Ideally, everything in your portfolio shouldn't correlate together. Similarly, the correlations computed were Pearson (which unfortunately assumes a normal distribution), kendall, and spearman correlation. Investment Science prefers to take an average of the three measures of correlations. Similarly, each and every position should had a different time horizon (i.e. an investment one year from now or three months from now), a different strategy (some long positions, and some short positions).
So many people we talk to are overly-concentrated in one sector or all long or all short. All of these things could lead to a disaster. Feel free to play around with the spreadsheet we created for Microsoft, and a hypothetical basket of securities. Our product, Investment Lab, did these computations.
We are building off of our previous post on the ticker symbol 'ATVI' or Activision Blizzard, which had a stock price of $82.46 on August 7th, 2020. Now, Investment Lab has functionality to graph opportunities for options, like we showed you on determining when an option is overpriced . What we do next, is check for inefficiencies of pricing within options. If we perform a credit spread trading strategy, where we sell a call option with the strike price of $82.50 on August 7th at $3.72, and we also buy a call option at $82.00 for $3.72 on August 7th - we would have a risk free trade, meaning if the price of ATVI is less than or equal to $82.00 we lose $0 dollars (see the last image for more detail).
*Note due to transaction costs and slippage (With regard to futures contracts as well as other financial instruments, slippage is the difference between where the computer signaled entry and exit for a trade and where actual clients, with actual money, entered and exited the market using the computer’s signals) we would likely only lose $5-$10 dollars. Lastly, we based the pricing off of the mid price from the bid and ask of Activision Blizzard options.
So to summarize, we risk $5-$10 dollars to make $50 dollars if Activision Blizzards stock price is greater than 82.50 on September 4th. Our software was able to pick the best risk/reward scenario for a given option at a given target price!
Pairs trading is when one takes multiple financial positions. A pairs trade is a trading strategy that involves matching a long position with a short position in two stocks with a high correlation (Having a “long” position in a security means that you own the security. Investors maintain “long” security positions in the expectation that the stock will rise in value in the future. ... Investors who sell short believe the price of the stock will decrease in value). What we did here was bounce off all of the data in our product coined 'Investment Lab,' and we find highly statistical correlated pairs that move together. In the event that the correlations break apart, we went long one position, and short another position. We take profit when the values approach two times the average true range (Average True Range (ATR) is a technical indicator measuring market volatility. It is typically derived from the 14-day moving average of a series of true range indicators. It was originally developed for use in commodities markets but has since been applied to all types of securities) is met with a trailing stop loss (A trailing stop loss is a type of day trading order that lets you set a maximum value or percentage of loss you can incur on a trade. If the security price rises or falls in your favor, the stop price moves with it. If the security price rises or falls against you, the stop stays in place).
We found two ticker symbols that made profits every single year, inclusive of financial crashes!
Michael Kelly has been working within banking technology for over a decade, and his experience spans across algorithmic trading, project management, product management, alternative finance, hedge funds, private equity, and machine learning. This page is intended to educate others across interesting topics, inclusive of finance.