Business

Market Snapshot

In 2025, the online advertising marketing size was ~500B. Notables:

• North America has the largest revenue share of over 34%.
• By platform, mobile leads at 59% of revenue share.
• The top 3 are: Google ($214B), Meta ($196B), and Amazon ($68B)

The Game Plan

Save at least 15% of your salary from age 25 into a 401(k) plan, an IRA, or a taxable account. Put equal amounts of that 15% into three buckets:

• A US total stock market index fund
• An international total stock market index fund
• A US total bond market index fund

Areas to Consider

Capital Markets

The Central Depository and Settlement Corporation (CDSC) runs the Central Depository System (CDS) that facilitates holding and trading of shares at the Nairobi Stock Exchange (NSE). A Central Depository Agent (CDA) is a Stockbroker, an Investment Bank, or a Custodian Bank, who has been authorized by the CDSC to open accounts in CDS on behalf of investors.

In 2006, an Automatic Trading System was introduced so that orders are matched automatically and executed by stockbrokers on a first-come first-served basis. Government bonds have also been added to the ATS. Securities lending, short-selling and same day turnaround trades are not yet permitted.

Maximizing the Value for Shareholders

Suing a company for not following its code of ethics and therefore misleading investors doesn’t fly, but Signet Jewelers settled for $240m . Signet’s 70k female employees sued for discrimination, but the class action is yet to be resolved.

Short Term Loans

A common narrative for loan providers is financial inclusion. 69% of global adult population is not covered by credit bureaus. Using non-traditional data (e.g. text messages, location, contacts, call logs), more people can get scored.

Product Differentiation and Price Discrimination

Product differentiation seeks to distinguish a product from a competing product to make it more attractive to a specific target market. Price discrimination occurs when the same goods/services are sold at different prices from the same company.

The Trade of the Century: When George Soros Broke the British Pound. Rohin Dhar. priceonomics.com . Jun 17, 2016.

Before the EU, Europe had the ERM to fix their exchange rates with the Deutschmark within 6% of the agreed upon rate.

Keeping the exchange rate fixed requires governments to nudge the rate, e.g.

• Use reserves of foreign currency to buy up their own currency
• Set high interest rates to entice lenders to buy their currency

Margaret Thatcher (PM) opposed the fixed exchange rates but lost the vote to Major, an ERM proponent.

Betting on Things That Never Change. Morgan Housel. www.collaborativefund.com . Jul 20, 2017.

Change by itself is hard. Investors have to spot it before it’s obvious. Consumers have to change their behaviors to make it viable. These two points repel each other.

Sears bet the Internet changed nothing. Beenz bet the Internet changed everything - creating a points-based currency valid only at online merchants. Amazon bet the Internet changed distribution, but rooted its strategy in selection and low prices.

Protectionism vs. Globalization

Prestige Ameritech is America’s #1 maker of surgical masks. In outbreaks, demand peaks, but when it’s all over, hospitals go back to exclusively buying cheaper masks from China. Reduced demand makes Ameritech lay off workers. Ameritech is pushing for a federal contract to stabilize demand over time.

India’s Foreign Exchange Act of 1973 gave Coca-Cola an ultimatum: hand over 60% of the local subsidiary to Indian partners and the syrup recipe. Coca-Cola left in 1977. With the fall of the Soviet Union, socialist India’s primary sponsor, India embraced the free market to fully finance its debts. Coca-Cola and Pepsi came back, but Indians kept drinking Thums Up (goes well with spicy food) and Limca (appeals to national love for lemonade). Coca-Cola bought both brands but still produces them.

Short Selling

Say $A shares are selling at $100, but I think they’re overpriced. So I borrow 10 shares, pay my brokerage interest and post some collateral. I then sell the shares for $1,000.

Consultants are not well suited for strategy (you probably have a deeper understanding). They are also an expensive way of proving your point to management. However, they are good for emergency horsepower, e.g. data analysis, and for primary research within your industry (they probably have a broader understanding).

Having a competitive advantage may reduce the incentive to explore other ideas, especially ones that conflict with your chosen [successful] strategy. Additionally, having to maintain/exceed quarterly numbers dissuade incumbents from risk taking.

The Problem of Twelve: In the near future, roughly 12 individuals will have practical power over majority of US public companies.

A Short History of Corporations

In the first stage, entrepreneurs get money from savings, “friends, family, and fools”, and VCs. Securities law restricts this to sophisticated investors only.

On generating revenue and stability, the entrepreneur takes the firm public (IPO) under oversight from the SEC. Ownership is separated from control, e.g. a board of directors accountable to shareholders. VCs start selling off their stake. Given the imposed restrictions, few investors would buy more than 5%.

WWW ‘21: The Web Conference 2021

REST: Relational Event-Driven Stock Trend Forecasting

REST, an event-driven stock trend forecasting framework, that overcomes two limitations of existing event-driven models. Models the stock context, and learns the effect of event information on the stocks under different contexts. Constructs a stock graph and designs a new propagation layer to propagate the effect of event information from related stocks. #stock-trend-forecasting #computational-finance

#graph-based-learning

Motivation

In 08. A New Walking Shoe: Modern Portfolio Theory , Malkiel introduced me to Modern Portfolio Theory, a technique for reducing portfolio risk, despite risky investments. It made me wonder how similar principles are applied in agriculture. This page is the result of that investigation.

~16% of Kenya’s land is sufficiently fertile and has good rainfall. In 2006, ~75% of working Kenyans are farmers (compared to 80% in 1980). (en.wikipedia.org)

Objectives: low latency, high throughput & high reliability.

The messages are quite brief, e.g. the ITCH protocol uses 32 bytes per message.

Trading firm listens to broadcasts on buys, sells, deletes on ITCH broadcasts. Online sorting to identify profitable trades.

Matching engine operates on a first-come-first-served basis. Earlier orders with better price get traded first.

Markets run at 50 microsecond scales.

Single market peaks at 10Gbps. Peaks are correlated, e.g. “Shit! TSLA is burning. Sell!”

Things to invest in

• (Least risk) Bonds, Stocks, Startups (Most Risk).
  • Why not start a business?

The Amount of Money

• Some investments only make sense in bulk for they have low margins, e.g. stocks

The risk tolerance

• The higher the risk, the higher the reward
• The law protects investors, e.g. startup investors in the US must be accredited

The Time Frame

• Maybe 10 years? Allows for compounding.
• It’s better to let the goal determine the time frame, e.g. retirement, home, etc.

Index Funds and 401(k) Accounts

• I assume the return is ~5%
• There are 4 types of retirement accounts, each with tradeoffs (en.wikipedia.org)
  • 401(k), Roth 401(k), Traditional IRA and Roth IRA
• The return of lazy portfolios (set and forget) is ~6% (compounded) over 15 years as of 2018 (finpage.blog)

Notes from /r/investing’s FAQ (reddit.com)

• The FAQ emphasizes reading books