Intense sub-planck undulations are seen as glimmers of distortions when zooming out, and are smoothed out on a higher level. Vice versa, seemingly flat world could be surprisingly dynamic if viewed in a sufficient close manner.
Figure 5.1 By sequentially magnifying a region of space, its ultramicroscopic properties can be probed | Source: The Elegant Universe by Brian Greene
In the investment world
Fluctuations in prices within a short time frame, however dramatic, could be (at least partially) smoothed out in a longer period of time. Vice versa, more details or clues of changes could possibly be found behind the scene even if prices stay the same in a week/month/year.
2.
What Physics says
While sub-planck variations are cancelling out with each other, some changes are constant and going in certain directions, although might be immaterial/unsensible on a daily basis – e.g. our universe is ever expanding.
In the investment world
Certain underlying trends (company, industry, economy, society, species, planet, etc.) are happening definitely in the long run. Trying to uncover those trends and making investments according to those should be an effective long term approach.
in the case of electromagnetic radiation, v is approximate 3×108 m/s
In ITU standards,
Extremely high frequency (EHF) = 30 to 300 GHz in frequency = 10 to 1 mm in wavelength, so called millimeter-wave (mmW)
Ultra high frequency (UHF) = 300 MHz to 3 GHz in frequency = 1 to 0.1 m in wavelength
UHF is where our current mobile networks live on, with 4G mostly on 700 MHz, 1700-2100 MHz, 1900MHz and 2500-2700 MHz across the globe.
Under the Friis Transmission Law, higher frequency has much higher loss (attenuation) in free-space. For mmW, additional transmission losses occur when traveling through the atmosphere are absorbed by molecules of oxygen, water vapor and other gaseous atmospheric constituents.
Important absorption peaks occur at 24 GHz (for water vapor) and 60 GHz (for oxygen).
mmW attenuation | Source: T.S. Rappaport, NYU Wireless
As range of 5G signals are limited, small cells deployment, collaboration and integration will be essential. Current experiments found a 200-meter range doable.
Signal Outage (200 m Cell) in NYC using Adaptive Single Beam Antennas | Source: T.S. Rappaport, NYC Wireless
Appendix – Frequency Allocation
AT&T frequency table | Source: WikiVerizon frequency table | Source: WikiFrequency allocation in China | Source: spectrummonitoring.com
On Oct 8, Intergovernmental Panel on Climate Change (IPCC) issued a special report on the impacts of global warming of 1.5 °C above pre-industrial levels and related global greenhouse gas emission pathways. And a summary version for policymakers.
1.5°C was the target to strive for, agreed in 2015 Paris Agreement. (countries agreed to limit warming to below 2°C above preindustrial levels by 2100)
However, we are nowhere close.
Source: Climate Action Tracker
Limiting warming to 1.5°C is possible within the laws of chemistry and physics but doing so would require unprecedented changes.
– Jim Skea of Imperial College London and an IPCC co-author
By “unprecedented changes,” Skea means essentially two things. First, the world needs to start cutting emissions. Instead in 2017, the world’s emissions a new record high. Second, we need to reduce those emissions very quickly. (Quartz)
Many researches have been done to analyze the impacts of a warming of 1.5°C and above.
1. How big is today’s loss & Are we really panicking?
The market rout on 10/24 (NASDAQ Composite dropped 329.14 points to 7,108.40) made it the largest retreat so far this year, surpassing the previous 316-points loss merely 2 weeks ago (10/10).
US stock index 10/24 tumble | Source: WSJ, Dow Jones Market Data
While the 4.43% retreat is widely “touted” as the biggest one-day loss since August 2011, it’s also the 3rd largest daily point loss in NASDAQ history (the other two happened in 2000 during the dot-com bubble).
Top 10 NASDAQ Largest Point Decrease as of 10/24/2018
However, in percentage wise, we could see NASDAQ’s 10 biggest single day decrease ranging from -11.35% to -7.23% (3 of which related to the 2008 financial crisis, 3 related to the dot-com crash, another 3 related to the 1987 crash).
“-4.43%” is not a big deal & that’s not how investors react if they are really panicking.
2. All about inflation?
It’s crucial to incorporate inflation into analysis.
NASDAQ climbed above 5,000 in Mar. 2015, and it took another 7 weeks before it reached the dot-com bubble peak of 5048.61 (intra-day record was 5,132.52).
NASDAQ Composite climbed above 5,000 in Mar. 2015 | Source: Quartz, FactSet
However, when we adjust for inflation, things are different.
Doing a simple math – U.S. CPI (urban, all items ex. food & energy) is 181.3 in 2000 (annual average) and 256.5 in 2018 (H1 average); so a 8,109.69 peak in August should be around 5,732 in 2000-price-level.
So NASDAQ Composite spent more than 18 years to grow 13.5% (from peak to peak), while fundamentally technology has gone through tremendous evolutions.
CPI – urban consumers, ex. food & energy (Jan. 1999 – Sep. 2018) | Source: U.S. Bureau of Labor Statistics
Similarly, WSJ reported in January this year that “Nasdaq Tops Inflation-Adjusted High [7269.89] from Dot-Com Boom”; and the chart below shows the inflation-adjusted path.
Why did we wait for 18 years just for a come-back? So value creation has little to do with the price? Is this all about inflation in the end?
3. Sit back and relax – It’s NOT all in vain
It’s a sure thing that companies can be over- or undervalued over time. But the benefits and growths are also real.
We have (unprecedented) iPhone in 2007 and (finally) massively produced Tesla Model 3 in 2018; we have 1 TB cloud storage for $9.99/month on Dropbox/Google Drive and unlimited storage of business account for $15/month on Box or $10/month on OneDrive.
Development in biotech is equally impressive. Sequencing cost dropped from ~$100 million per genome in early 2000s to ~$1,000 in 2016; and we are curing/curbing more types of cancer with unprecedented success rate and less harmful methods. Other advancements, for example those in neuroscience or surgical robots, are no less exciting.
And we can see their reflections in stock price (e.g. AAPL TSLA ILMN ISRG).
While the NASDAQ Composite in 2000s may be overvalued, comparatively in 2018 it is more supported by concrete revenue and earnings. Promises and expectations are still built in the price, but things are a lot better.
From a similar discussion in Mar. 2015 when NASDAQ reached 5,000 again after 15 years – P/E is not even close to insane levels.
When we call it a bubble (e.g. dot-com bubble), it is usually characterized by an increasing [absurdly large] difference between price and actual value created.
Revenue or earnings can rarely be doubled consecutively between regular quarters but prices can. That’s what happened in 1999 when Nasdaq Composite rose 85.59% (vs. 28.24% in 2017) and 13 large-cap stocks rose over 1000% (vs. Amazon +56%, Netflix +55%, Facebook +53%, Apple +46%, Alphabet +33% in 2017).
While a 10-fold rise in stock price is tough to catch up by revenues and earnings, I see a 50% rise doable and reasonable (e.g. could be a combination of 80% EPS growth + 20% P/E decrease, 50% EPS growth + P/E unchanged, or 25% EPS growth + 20% P/E increase), as long as the new P/E is justified by the future prospect.
I am not saying we shouldn’t anticipate a correction; but NASDAQ Composite hasn’t been super crazy neither.
I would like to conclude this post here by saying that – I believe in the future and the real benefits of tech [if correctly used]. Some areas might seem to be more over-promised than others, and some risks are looming on the horizon [to negatively impact global economy in a nontrivial manner], but true value creation should and will always be valued.
Appendix – what does S&P look like
S&P forward P/E as of Sep. 2018 | Source: JP Morgan Asset Management
Recommending this keynote from Marc Raibert – Founder and CEO of Boston Dynamics, THE most advanced creature-like robots designer (and manufacturer possibly in 2019)
Google 肯定是要抢这个未来 smart home device 核心位置的，nest 已布局多年，推广 google assistant（智能语音），顺带连接 google 本身各项服务，以及推广 youtube (premium) music。Google 的硬件实力近几年也突飞猛进，系统平台的强势更不用说。
Microsoft 这个略尴尬，也不算它自己做的 device，主要是推广了 Microsoft 的 Cortana 智能语音。
Apple 不用说，音乐和硬件一直是强项，Siri 也是有基础的，iOS 本身也有 Homekit。虽然目前没有带屏幕，但我相信就是日程上的事。已经有 FaceTime 和 FaceID，想象空间绝对够。
Facebook 强在社交网络 (FB Messenger) 的嫁接，自动生成电话薄。
然而，Facebook Portal 细想一下，在很多方面都很尴尬。
首先，Facebook 没有自己的智能语音，Portal 是直接用的 Amazon Alexa。在这一群科技巨头面前直接弱三分 (Alexa, Google Assistant, Cortana, Siri)。
Banksy B. 1974 GIRL WITH BALLOON signed and dedicated on the reverse spray paint and acrylic on canvas, mounted on board, in artist’s frame 101 by 78 by 18 cm. 39 3/4 by 30 3/4 by 7 in. Executed in 2006, this work is unique.BANKSY, LOVE IS IN THE BIN, 2018
作者 Banksy 在 Instagram 上 po 出了自带碎纸的画框制作小视频，并 quota 毕加索
“The urge to destroy is also a creative urge” – Picasso
原本约 1 百万英镑的拍卖成交价，在一波戏剧性的操作后作品将大幅增值。
虽说 Banksy 说拍卖行并无参与 – 但无论怎样，这已经不单单是一幅画作，整个戏剧性故事都离不开 Sotheby。根据苏富比的 blog，这是首次在拍卖中卖出了行为艺术 (it marked the first time a piece of live performance art had been sold at auction, read more here)。
