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RollerCoaster Tycoon 3: Complete Edition arrives on both Switch and PC on September 24. The complete edition comes with the Soaked! and Wild! expansion packs, so you’re good to go on all the bonus content to make some ripping rides.
The draw on Switch is clearly to build the ultimate coaster anywhere, anytime, but PC players get the bonus of having widescreen mode and 1080p. Take a peek at a new trailer showcasing the roaring roller coaster ride below!
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This post is meant to be an addition to what I said earlier this year. Here we compare, in the same historical period of existence of bitcoin, Bitcoin vs other assets: us stock market indexes, US stocks of different sectors and Gold.
Let’s start with this summary table, who follow me regularly should already know the meaning of Shannon’s probability, RMS, G yield and compounded annual G yield; for all the others I refer you to the end of the article.
The data have been sorted in descending order according to Compounded Yearly Gain G.
Comparison Bitcoin vs. The rest of the world
July 17, 2010 – Dec 31, 2019
|Asset||RMS or Volatility||Shannon Probability P||Daily Gain G||Compounded Yearly Gain G||Optimal Fraction of your capital to wage|
|Nasdaq Composite Index||0.0106||0.5179||1.00032||8%||3.6%|
|Standard & Poor’s 500 Index||0.0091||0.5160||1.00025||6%||3.2%|
|Berkshire Hathaway Inc. (W.Buffett)||0.0105||0.5112||1.00018||5%||2.2%|
*Ethereum Data since Aug 7, 2015, source coinmarketcap.
**Gold since 1970 has been a bit better with +3% yearly compounded gain.
The first comparison to make is with the main competitors of bitcoin, credit cards. I’m surprised to see how good are quantitative parameters of Mastercard and Visa, on the other hand they are monopolies, perhaps that’s why the CEO of mastercard hates so much Bitcoin, he sees it as a strong threat. Even Amazon has worse parameters compared to Visa and MC.
I included only Ethereum in the comparison because in terms of market cap is second to Bitcoin, its yearly yield G is negative and i’m not surprised because I remind you that volatility reduces by far the yield G and in the case of all altcoins, not only Ethereum, the volatility reaches very high levels and therefore as an investment vehicle altcoins in general are absolutely not recommended, can eventually be considered as purely speculative assets for short-term trading.
Unfortunately for Mr.P.Schiff, in the last ten years Gold performed badly, for your curiosity i computed Gold parameters using available daily data since January 1970 and its yearly gain G or yield has been +3%, nothing exceptional, basically Gold protected you against inflation in the last fifty years but nothing more then this.
As i said 20 days ago Bitcoin volatility is dropping but it remains very high compared to other assets, despite this Bitcoin yearly compounded gain G is an astonishing +38% and it’s the best investment vehicle of the world.
Compared to other bitcoin price models this value is not much, ten years from now compounding 38% yearly bitcoin should be at around 200k usd while, for example, the stock to flow model has a forecast of 10 millions usd after 2028 halving, this is the equivalent of 144% yearly compounded gain instead of 38%.
Let me know what you think, does the stock to flow model price return appear realistic to you or not? Personally i prefer to rely on numbers and they say a clear “no” to me. This is why i’m a bit skeptic about also the bitcoin price model i developed on tradingview but i’m curious to see how it’ll end in a couple of years.
The concept of entropic analysis of equity prices is old and it was first proposed by Louis Bachelier in his “theory of speculation”, this thesis anticipated many of the mathematical discoveries made later by Wiener and Markov underlying the importance of these ideas in today’s financial markets. Then in the mid 1940’s we have had the information theory developed by Claude Shannon , theory that is applicable to the analysis and optimization of speculative endeavors and it is exactly what i’ve done just applied to bitcoin and the other assets considered in the above table, especially using the Shannon Probability or entropy that in terms of information theory, entropy is considered to be a measure of the uncertainty in a message.
To put it intuitively, suppose , at this probability, the event is certain never to occur, and so there is no uncertainty at all, leading to an entropy of 0; at the same time if the result is again certain, so the entropy is 0 here as well. When or 0.50 the uncertainty is at a maximum or basically there is no information and only noise.
Applying this entropy concept to an equity like a stock or a commodity or even bitcoin itself common values for P are 0.52 that can be interpreted as a slightly persistence or tendency to go up, this means that for example stock markets aren’t totally random and up to some extend they are exploitable, same for btc.
Knowing the entropy level of bitcoin/usd is crucial if we want to compute its main quantitative characteristics, as i explained in the technical background of my blog this process is quickly doable once you have all the formulas, the process is as follows:
To compute the Shannon Probability P you should follow these steps:
- compute natural logarithm of data increments (today price / yesterday price)
- compute the mean for all data increment computed in step 1
- compute RMS (root mean square) of all data increments, squaring each data increment and sum all togheter
- Compute price momentum probability with the formula P = (((avg / rms) – (1 / sqrt (n))) + 1) / 2
where avg = data computed in step 2, rms = data computed in step 3, n = total samples of your dataset. If the resulting probability is above 0.5 then there is positive momentum, otherwise under 0.5 negative momentum
To compute the Gain Factor G use the following formula:
|G = ((1+RMS)^P*((1-RMS)^(1-P))|
To compute the yearly gain G or growth just raise daily gain G to the 365th power for Bitcon or 252 for stocks (252 trading days in a year).
Check out technology changing the life.
The coronavirus issue is likely to linger for some time.
GERMANY PUBLIC HEALTH AGENCY PRESIDENT SAYS OUR ASSUMPTION IS THAT IT WILL TAKE ABOUT TWO YEARS FOR THIS PANDEMIC TO RUN ITS COURSE— Quantitative Trading (@fiquant) March 17, 2020
“I’m an epidemiologist. When I heard about Britain’s ‘herd immunity’ coronavirus plan, I thought it was satire”
– William Hanage
Many companies like WeWork or Oyo have been fast and loose chasing growth while slower growing companies have been levering up to fund share buybacks. Airlines spent 96% of free cash flow on share buybacks. The airlines seek a $50 billion bailout package.
There are knock-on effects from Boeing to TripAdvisor to Google all the way down to travel affiliate blogger, local restaurants closing, the over-levered bus company going through bankruptcy & bondholders eating a loss on the debt.
Companies are going to let a lot of skeletons out of the closet as literally anything and everything bad gets attributed to coronavirus. Layoffs, renegotiating contracts, pausing ad budgets, renegotiating debts, requesting bailouts, etc. The Philippine stock market was recently trading at 2012 levels & closed indefinitely.
Brad Geddes mentioned advertisers have been aggressively pulling PPC budgets over the past week: “If you have to leave the house to engage in the service, it just seems like it’s not converting right now.”
During the prior recession Google repriced employee options to retain talent.
In spite of consumers being glued to the news, tier one news publishers are anticipating large ad revenue declines:
Some of the largest advertisers, including Procter & Gamble Unilever, Apple, Microsoft, Danone, AB InBev, Burberry and Aston Martin, made cuts to sales forecasts for the year. With the outlook for the spread of the virus changing by day, many companies are caught in a spiral of uncertainty. That tends to gum up decisions, and ad spending is an easy expenditure to put on pause. The New York Times has warned that it expects advertising revenue to decline “in the mid-teens” in the current quarter as a result of coronavirus.
More time online might mean search engines & social networks capture a greater share of overall ad spend, but if large swaths of the economy do not convert & how people live changes for an extended period of time it will take time for the new categories to create the economic engines replacing the old out-of-favor categories.
[IMPORTANT: insert affiliate ad for cruise vacations here]
As Google sees advertisers pause ad budgets Google will get more aggressive with keeping users on their site & displacing organic click flows with additional ad clicks on the remaining advertisers.
When Google or Facebook see a 5% or 10% pullback other industry players might see a 30% to 50% decline as the industry pulls back broadly, focuses more resources on the core, and the big attention merchants offset their losses by clamping down on other players.
At its peak TripAdvisor was valued at about $14 billion & it is now valued at about $2 billion.
I am not suggesting people should be fearful or dominated by negative emotions. Rather one should live as though many other will be living that way.
In times of elevated uncertainty, in business it is best to not be led by emotions unless they are positive ones. Spend a bit more time playing if you can afford to & work more on things you love.
Right now we might be living through the flu pandemic of 1918 and the Great Depression of 1929 while having constant access to social media updates. And that’s awful.
Consume less but deeper. Less Twitter, less news, fewer big decisions, read more books.
It is better to be more pragmatic & logic-based in determining opportunity cost & the best strategy to use than to be led by extreme fear.
- If you have sustainable high-margin revenue treasure it.
- If you have low-margin revenue it might quickly turn into negative margin revenues unless something changes quickly.
- If you have low-margin revenue which is sustainable but under-performed less stable high-margin revenues you might want to put a bit more effort into those sorts of projects as they are more likely to endure.
On a positive note, we might soon get a huge wave of innovation…
“Take the Great Depression. Economist Alexander Field writes that “the years 1929–1941 were, in the aggregate, the most technologically progressive of any comparable period in U.S. economic history.” Productivity growth was twice as fast in the 1930s as it was in the decade prior. The 1920s were the era of leisure because people could afford to relax. The 1930s were the era of frantic problem solving because people had no other choice. The Great Depression brought unimaginable financial pain. It also brought us supermarkets, microwaves, sunscreen, jets, rockets, electron microscopes, magnetic recording, nylon, photocopying, teflon, helicopters, color TV, plexiglass, commercial aviation, most forms of plastic, synthetic rubber, laundromats, and countless other discoveries.”
The prior recession led to trends like Groupon. The McJobs recovery led to services like Uber & DoorDash. Food delivery has been trending south recently, though perhaps the stay-at-home economy will give it a boost.
I have been amazed at how fast affiliates moved with pushing N95 face masks online over the past couple months. Seeing how fast that stuff spun up really increases the perceived value of any sustainable high-margin businesses.
Amazon.com is hiring another 100,000 warehouse workers as people shop from home. Amazon banned new face masks and hand sanitizer listings. One guy had to donate around 18,000 cleaning products he couldn’t sell.
I could see online education becoming far more popular as people aim to retrain while stuck at home.
What sorts of new industries will current & new technologies lead to as more people spend time working from home?
World of Warcraft
Remedy has offered new details about the upcoming AWE expansion in its latest livestream, but one of the coolest announcements to emerge from that video on the status of the game is what is coming in the free August update. Remedy revealed that it’s responding to complaints about long checkpoints and difficulty overall with a number of new options.
The game is adding new control points as well as soft checkpoints in certain areas.
In addition, a new “Assist Mode” provides tremendous flexibility for players to cater the game to their desires, changing out damage input and output amounts, reload and recharge speeds, and even turning off character death entirely.
Many players at launch found Control’s difficulty to be uneven, so this new addition from Remedy should come as welcome news.
The free update is due out this month.