Cloud Computing and Energy

It is projected that cloud computing will account for 13% of world electricity consumption by 2030. A prediction is that, in the future the computing power wont be the bottleneck or the parameter to optimize. It will be energy consumption. Maybe that will even become benchmarks for developing state of the art AI/ML Algorithms. With chips going down to 5nm and server grade hardware pushing its limits as well. The performance bottleneck will soon be insignificant compared to the energy tax each iteration of an algorithm would take.

Energy will become the major operating cost for all the data centers and cloud servers. That will be the one parameter that can make these companies like AWS run more leaner on a daily basis. 2 possibilities than. Either there has to be a breakthrough in how we fundamentally store, retrieve and erase data on physical medium or how we carry out computations. The latter would prove more useful as it is the energy heavy component among the two. Logic in memory is a hybrid approach that combines both aspects and can save energy. The second possibility is that we have to figure out innovative ways to counter the energy problem. Microsoft’s Project Natick has claimed that underwater data-centers are a viable option.

Equity Research and Newspaper

They both are similar in some aspects.
– Both have an investigative component. There is a process of uncovering information that is not apparent or not in plain sight to perform equity research. Similar to how investigative journalism works.
– The element of filtering signal from a lot of information and creating a narrative around it. Historians are particularly good at this and there are plenty of them in both verticals.
– Both models include a wide variety of topics. In equity research it could be stocks, bonds, economics, and the different industries. And in newspapers you could see politics alongside sports alongside business.
– Both have to adapt to falling information costs. The gap between “quality” and “quantity” became more.
– Both compete for engagement. They want to write what their readers want to see.

But these differ as well. In the newspaper industry there are 3 main players; the editorial, the advertisers and the readers. While in equity research there are research analyst firms and institutional investing firms. The business models are quite different.

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Baltic Dry Index

This is an index issued daily by the London Stock Exchange. It directly measure the demand for shipping capacity versus the supply of dry bulk carriers. The supply of cargo ships are quite tight as it takes a lot of time to commission a ship. It is more costly to park a ship for some parts of the time. So marginal increase in the demand can push the index quite high.

The BDI is a practical economic indicator on a global scale. THe BDi is also a measure for what it costs to ship raw materials like iron, steel etc. The index is calculated by calling ship brokers around the world to see what the prices are for 22 different routes around the world. Ships are divided based on their capacity.

  • Capemax (10 percent of the global fleet): ships that can carry 100,000+ dead weight tons of cargo and are too big to pass through the Panama Canal

  • Panamax (19 percent of the global fleet): ships that can carry 60,000-80,000 dead weight tons of cargo and can barely fit through the Panama Canal

  • Handymax, or Supramax (37 percent of the global fleet): ships that can carry 45,000-59,000 dead weight tons of cargo

  • Handysize (34 percent of the global fleet): ships that can carry 15,000-35,000 dead weight tons of cargo

BDI is a very visible indicator of demand for materials and commodities globally. It is a simple index and is difficult to manipulate. Since the index is directly calculated from prices around the world it is driven by supply and demand, it is shielded from the involvement of government, speculators and other key players. BDI usually goes up when the economies around the world are growing, the demand and there in the prices of commodities grow, companies and stock prices around the world continue to increase in value


Baltic Dry Index

Spatial Computing

Spatial computing can be considered as an extension of IoT for objects in space. It is a concept that includes various technologies like virtual reality, augmented reality and mixed reality. AR headsets like the HoloLens use “spatial computing” to interact with real objects around them. A futuristic scenario is when the objects around you are not only connected to a common media like the internet but also orchestrate themselves to achieve a higher level goal. Or if you could interact with objects that are thousands of miles away or fix machines that are in the ends of the planet.

For a technology like this to manifest there should exist a high speed, low latency network that will allow this kind of high bandwidth communication across multiple objects and the subsequent processing of that data. Another prerequisite could be the need of a common language that these disparate objects and underlying technology can use to talk to each other. Lastly, the use-cases need to be simplified and dumbed down to make it profitable and viable for development and innovation. A use-case that is quite common now an array of sensors spread in the aisles of a supermarket to better understand the behaviour of the customers.


Embedded Intelligence

One Language

According to the theory of monogenesis, all pidgins and creole languages of the world can be traced back to one language. A pidgin is a language that has lexical features from 2 languages along with simplified grammar and a smaller set of vocabulary. This is most commonly found in African countries with numerous ethnic groups. Each group have their own language. English based pidgin is used among certain communities to communicate with each other. Pidgin languages are fluid and change over time. A creole is a stable language that is formed from several languages. English-based creole languages are common in the Caribbean region. European language spread patterns have been connected to the early colonial ties with different parts of the world. Language spread and diffusion occurs as large groups of people move around and settle in other parts of the world. In a away, languages and the mix of it that occurred over the years provides a better picture on how people moved around.


A bubble is an economic event where the market price of an asset rises rapidly. Usually, this sudden rise of price is followed by a crash or a drop. Like most market phenomenon, this too is driven by market behaviour. A bubble can occur at any time. During a bubble, there is a large transfer of money to parts of the market experiencing rapid growth. Once the bubble has burst, the wealth is transferred back.

There can be many reasons as to why the market behaves this way. The dot-com bubble of 2000 was fueled by the collective illusion that internet based businesses will have very high leverage and low costs to run a business. However, that was not the case. Making an internet business viable was hard. The speculation led to a huge increase in prices of such companies.

Fear Index

Fear index is the popular name of the Chicago Board Options Exchange’s CBOE Volatility Index(VIX). It is a 30-day forward looking volatility index and is used as a measure for the expected volatility by the market. Volatility is the level of price fluctuations that can be observed in past data. A simple way to gauge it is to look at the standard deviation and variance of past data which tells us how much was the spread. However, the fear index is a measure of future volatility, also known as implied volatility. This is calculated by looking at option prices. A price for a call option on a stock that expires in a month is an indication on the probability and the general expectation of the market for the price of that stock in a month’s time. VIX is constructed using implied volatilities in index options of the S&P Index.

The VIX hit it’s highest intraday level since 2008 on March this year. It had a 280% surge and that is primarily due to the Covid-19 outbreak. However, since then it has settled down to almost pre-Covid levels. The VIX provides a direct way to cash in from the general fear and volatility of the market.

Anchoring Bias

Anchoring bias causes you to get distracted by the information that was presented first. Even if that is not relevant to the task at hand. Information that follows will also be judged relative to what was presented first. The first piece of information has now become anchored in your thought process. This happens when you look at the price of stock. When you buy a stock at a price and eventually gives you higher return, anchoring kicks in. Even though the fundamentals of the business hasn’t changed, you wouldn’t want to add to your existing position because the initial price is what you are anchored with. When looking at deals, we are trained to compare it to see if it is a bargain or not. And by default, the first price is what the comparison is done against. This happens a lot in sales as well. The salesman almost always starts their pitch with a much higher price. Thus anchoring the buyer to that price. So any discounts the salesman further makes looks like relatively a good offer for the buyer.

Why do we value Gold?

From the periodic table, it is easy to dismiss the elements that are gaseous or liquid in normal pressure and temperature. They wouldn’t make a good currency anyway. Then comes the alkaline metals in the periodic table. They are too reactive to be considered for everyday use and exchange. And the same applies to radioactive elements. Then comes elements like titanium, zirconium. Very durable and stable. However, it required specialized equipment back in the day (circa. 1000BC) to extract these elements from its ore. Aluminum was hard to extract as well and Iron rusts. Then we are left with a few elements that are known as the noble elements. “Noble” because they don’t easily react with other elements and that means they occur in nature as itself. They are Platinum, Rhodium, Palladium, Iridium, Osmium, Ruthenium, Silver and Gold. A problem with the noble ones except for Silver and Gold is that they are so rare and would be very hard to forge coins out of them. Silver tarnishes over time, but Gold relatively does not. This inertness is one of the main reason why Man has used it over thousands of years as a form of currency.

Back in the day, currencies were tied to Gold. Meaning that each paper note of a currency is backed by and equivalent amount of physical Gold. But during the Great Depression, countries severed this ties so that they can print more money and reflate their economies. More recently, the US stopped using Gold as a backing in 1973. And with a steady supply of Gold and varying demand, it can swing the price quite a bit. The bottom-line is that gold inherently did not have any value. The society during different times in history assigned it value. This could be the reason as to why many still use Gold in their portfolios.


Gold, BBC

Temperature Inversion

Temperature inversion is a meteorological phenomenon where a deviation occurs from normal change of an atmospheric property with altitude. It usually refers to the inversion of the thermal lapse rate. The lapse rate is the rate at which temperature falls with altitude. The temperature drops as you gain altitude due to the lowering of pressure, following the ideal gas law. An inversion would mean that the temperature would be higher at a higher altitude than it is in a lower altitude. This traps air pollution like smog closer to the ground. Inversion can occur when a warm less-dense air mass moves over a more dense cold air mass. This in turn can cut off any convection in the region stopping the air form circulating. As a consequence of inversion, it is seen that radio waves can be refracted making it possible to receive radio signals from long distances.