Monthly Archives: April 2009

Data Mining Social Networks

All the stuff you post about yourself and what you like in Facebook or some other social network is a marketer’s wet dream.  Data mining companies are now capitalizing on the free information you post about yourself, mining it, and then selling statistically significant data relationships to marketers via the social network’s APIs.

A company called Colligent mines social networks for data that it sells to record labels to help them decide which demographics or individual fans might like a particular artist, and those are just the very first nuggets marketers pull out of profiles.

This monitoring of publicly-available data has already paid dividends. Disney’s Hollywood Records label had noticed more Latin American fans at Jonas Brothers concerts than it expected to see, but until Colligent’s data revealed a “statistically significant” correlation between that band and the Latin American community, it hadn’t capitalized on that observation. Data from social networks convinced them to increase their marketing budget in Latin American communities, and when the next Jonas Brothers album came out, Nagarajan says, the label saw a significant uptick in sales to Latin Americans.

There’s a lesson here: If you want to participate in social networks and interact with free content online, there’s a clear privacy trade-off. In a way, it’s a fair deal: we get free data in the form of social networks and free entertainment, while marketers get free data about who we are — and what we can’t resist. [By Eliot Van Buskirk]

The best piece of advice is NOT to use social networks if you want to maintain your privacy.

LinkedIn Monte Carlo Discussion

I recently started joined the Monte Carlo Simulation, Excel and ModelRisk LinkedIn Group and found a very interesting discussion thread on the type of probability functions people use for there daily Monte Carlo modeling.  Since I use RiskAMP, an Excel based Monte Carlo simulator, I found this thread very interesting indeed.

Here’s an answer from Lan Ge, scientific researcher at WUR:

I used to analyze risks related to animal epidemics and used distributions like: Beta, Binomial, Exponential, Erlang, Gamma, Normal, Lognormal, Pert, Poisson (of course!), Student, Weibull, Uniform (Discreet Uniform)..right now I am analyzing a broader range of risks (production, investment, planning), I notice that I am using more and more normal, lognormal, Pert, triangle, and student.

What I use in my modeling is Normal, Poisson, Pert, Lognormal, and Binomial a lot.  What do you use?

Links for April 28th

These are my links for April 28th:

Links for April 20th through April 25th

These are my links for April 20th through April 25th:

More Lipstick On This Pig

I consider myself a Bullish guy.  I believe in the markets and that they’ll recover one day into another fabulous Bull Market.  Heck, I’m still long in my retirement accounts and still plowing money into the markets as part of my long term investing strategy.  However, there is a short term reality out there that any sane person can’t ignore.  The markets are still sucking bad and this rally is probably going to fall apart now or around the 1000 level in the S&P500.

sp500-042409

How did I come to this? I did it through three ways: Technical Analysis, my recently updated Rapidminer neural net classification model, and my Monte Carlo simulation model. You can check out my example classification  model in the tutorial section to get an idea how to build one.

Bottom line: We don’t have the right ingredients in place for a new Bull Market and we have more lipstick to put on this pig before we build a new Bull Market.

Checking Out AUDUSD

My whole AUDUSD neural net model is shot to hell because of the massive selloff last year, so I’m forced to rebuild it from scratch.  As I ponder the inputs for the model this time, I’m spending time familiarizing myself with that market again.

So what do I do?  Well I pull up a chart of the AUDUSD currency pair and slap a Fibonacci Retracement tool on it.  Its amazing how many traders use this tool because prices tend to “retrace” to certain price levels BECAUSE so many traders use Fibonacci.  Self full-filling prophecy I guess.

Anyway, I’d be playing a breakout of 0.7461 in this currency pair, if it can ever get there.

audusud-042109(click to enlarge)

Links for April 19th through April 20th

These are my links for April 19th through April 20th:

  • Debt Settlers Offer Promises but Little Help – NYTimes.com – More often, they say, a settlement company collects a large fee, often 15 percent of the total debt, and accomplishes little or nothing on the consumer’s behalf.
  • Preoccupations – Is This the Time to Chase a Career Dream? – NYTimes.com – This interest in what makes people tick, and curiosity about what keeps them from realizing their dreams, drove me to become a business coach 13 years ago. I never tire of hearing people’s stories, or of learning ways to help the creatively oppressed come alive. – I WORKED WITH A MAN WHO TOLD ME TO "FIND WHAT I LOVE TO DO, THEN FIND A WAY TO MAKE MONEY AT IT." HE LOVED LIFE AND HIS WORK.
  • Sri Lanka Gives Rebels 24 Hours to Surrender – NYTimes.com – The government issued the ultimatum, giving the Tamil Tiger rebel chief Velupillai Prabhakaran and his fighters 24 hours starting Monday at noon to surrender before the military launches a final assault aimed at crushing the insurgents and ending the island nation's 25-year civil war. – SUN TZU WOULD SAY SURRENDER UNDER THE TERM TO ALLOW YOU TO LIVE. THEN LET IT FESTER AND START A NEW WAR IN A FEW YEARS
  • Waterboarding Used 266 Times on 2 Suspects – NYTimes.com – The C.I.A. officers used waterboarding at least 83 times in August 2002 against Abu Zubaydah, according to a 2005 Justice Department legal memorandum. Abu Zubaydah has been described as a Qaeda operative. – ONCE WOULD BE ENOUGH FOR ME
  • Global Stocks Rally May Falter, State Street Says (Update2) – Bloomberg.com – “We’re likely to see a pullback in stock markets as earnings disappoint,” said George Hoguet, global investment strategist at Boston-based State Street Global Advisors, which oversees $1.4 trillion. “We are undergoing a severe shock and the global economy will take several quarters to get back to trend growth.” – WHAT HAPPENS IF THEY DONT?
  • Bill Miller Not Dead Yet as Value Funds Bury Quants (Update1) – Bloomberg.com – “Not in a million years would we have expected this gyration to be as vicious and enduring as it has been,” Steven Solmonson, the head of Park Place Capital Ltd., a hedge fund that oversees $150 million, said in an interview from New York. “The quants got whipsawed badly.”
  • Go4Go.net – Go for it! – Another Go site.

Bill Miller Back To Making Money

I really admire Bill Miller, he’s my kind of value/contrarian investor.

Bill Miller, who lost 55 percent in 2008 running the Legg Mason Value Trust after beating the Standard & Poor’s 500 Index for a record 15 straight years, is topping the measure again. [By Alexis Xydias and Lynn Thomasson]

It seems that he’s been buying companies with a lot of debt and low ROA that rely on consumer spending, something that a lot of people shy away from these days.

I’m sure many people will say that Bill caught a lucky break here but after beating the S&P500 for the past 15 years, you have to wonder if he really knows what he’s doing after all.

Links for April 18th

These are my links for April 18th:

  • Brooklyn Philharmonic Cancels 2009-10 Season as Donations Fall – Bloomberg.com – The orchestra found it would fall short of its $3 million budget, provided by individuals, corporations and foundations, and so decided to cancel the May 9 concert — the last of a season that began January 31 — and the next season, said J. Barclay Collins II, the symphony’s board chairman, in a phone interview. He declined to detail by how much donations had fallen. – THIS IS TERRIBLE, ART IS ALWAYS THE FIRST TO SUFFER BUT ARTISTS SUFFER ALL THE TIME! =)
  • Jackie Chan: Chinese people need to be controlled – "I'm not sure if it's good to have freedom or not," Chan said. "I'm really confused now. If you're too free, you're like the way Hong Kong is now. It's very chaotic. Taiwan is also chaotic." – SOUNDS LIKE HE'S A COMMIE NOW