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Notes to Myself

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Technology

Something significant has happened around us last week!

Few weeks ago I wrote about Misha Osipov – the new chess prodigy. That was an amazing feat by a human in chess!

This week something equally or more significant has happened in chess. Google’s AI, AlphaZero, developed a “superhuman performance” in chess in just four hours. After being programmed with only the rules of chess (no strategies), in just four hours AlphaZero had mastered the game to the extent it was able to best the highest-rated chess-playing program Stockfish.

In a series of 100 games against Stockfish, AlphaZero won 25 games while playing as white (with first mover advantage), and picked up three games playing as black. The rest of the contests were draws, with Stockfish recording no wins and AlphaZero no losses.

This is a very significant development in the field of Artificial Intelligence and Machine Learning!

Chess programs and softwares so far used to work as a combination of “Huge database of Chess games + Rules/Analysis Engine +  Brute force of computing power”. So the programs were “fed with” chess games and rules; they didn’t “learn” chess. Of course that was also a tremendous achievement. You should read Garry Kasparov’s book Deep Thinking to read about his match with Deep Blue and the future of Man vs Machine chess.

But Google’s AI is altogether different! Few months ago Google’s AI beat the best human in a Chinese strategy game called Go. Watch a short video explaining Google’s Deep Mind here.

Google AI is trying to develop a general purpose machine learning software that can learn things on its own and then excel. In the recent game of chess the Google AI learnt the game of chess in just 4 hours; not just learnt, it mastered the game of chess in 4 hours! The program AlphaZero then played with another strong program Stockfish in 100 games and destroyed it 64-36!

Look at reactions of some of the best Chess players in the world today

https://www.chess.com/news/view/alphazero-reactions-from-top-gms-stockfish-author

You can read an academic paper on this Mastering Chess and Shogi by Self-Play with a General Reinforcement Learning Algorithm

The world around is us changing rapidly! Driverless cars, Drones, Hyperloop, Self-learning AI, Machine learning, Blockchain, Robots performing human tasks and posing threat to jobs…disruption is inevitable in all spheres of life!

One can only imagine how these changes would impact us in year 2030 or 2040! Embracing the technology and facing disruption is not an option; welcoming it and adjusting ourselves, and keeping ourselves up-to-date is the only option! Gone are the days when you could leave University with a degree and spend the rest of your life without upgrading your skills, learning new things. You must earn all your life just to keep pace with the world around you! Because now the threat is not only from other humans, but from machines as well!

Remember the Red Queen quote from Alice In Wonderland?

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D8: Steve Jobs Onstage: Full-length Video

Steve Jobs interview at D8 – All Things Digital conference…he mentioned about iPhone 4G leak and within a few days, i.e. Yesterday Apple announced iPhone 4G!!! Look forward to watching Steve Jobs product launch presentation soon…

http://s.wsj.net/media/swf/main.swf

~ Kaustubh

The New Buffettology: Book Review: Part 1


I recently read this book – ‘The New Buffettology’ by Mary Buffet (who was Warren’s daughter-in-law for 12 years before she divorced her husband and Warren’s son, Peter) and David Clark.


I immensely enjoyed reading this book; though not a fool-proof, it has some very interesting snippets and anecdote’s about Warren Buffet’s investment strategies and business acumen. It gives you some insight into how Warren thinks and makes his investment decisions.


The books is filled with small write-ups/ tid-bits used to explain some basic concepts/ Warren’s investment philosophies. Here is one excerpt on the shortsightedness of Mutual Fund and how investing in Mutual Funds with long-term perspective is not a good idea (to which I fully agree. I had similar thoughts but was not able to put it in such precise words as te following write-up has done!)

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THE SHORTSIGHTEDNESS OF THE MUTUAL FUND BEAST


A number of years ago the authors were having dinner with a middle-aged mutual fund manager who oversaw tens of billions of dollars for the money management division of a large West Coast Bank. He brought along an enormous book that contained a brief analysis over two thousand different companies that he and his fellow analysts followed. They called it their “investment universe”. At his invitation we thumbed through the book and found a company that we knew Warren had been buying, Capital Cities Communications. Capital Cities was a television and radio broadcasting company run by Tom Murphy, a management genius with a keen eye for the bottom line. Warren loved this company and once said that if he were stranded in a deserted island for ten years and had to put all his money into just one investment, it would be Capital Cities. Definitely a strong vote of confidence.

Our friend also had a list of the stocks his fund had purchased. As we read through the list, we noticed that he didn’t own any Capital Cities. We quickly pointed this out and told him that Warren had recently been buying it. He said that he knew it was a great company but he didn’t own it because he didn’t think the stock price would do much over the next six months. We told him that was insane. That it was a fantastic long-term investment selling at a great price. He told us that he was under great pressure to produce the highest quarterly results possible. If he couldn’t beat his competitor’s returns quarterly, his clients would take their money elsewhere, which meant that he would lose his job, his Porche, and the income to send his son to Harvard. (Sounds grim, doesn’t it?)

Our mutual fund manager felt he couldn’t buy a single share of Capital Cities for his fund, even though he knew it was a great investment, because he wasn’t sure that it was going to go up in price over the next six months. This is the nature of mutual beast; it caters to the short-term oriented mutual-fund-buying public. If it doesn’t, money flows out the door and down the street to the fund that produces better short-term results.

(in case you are wondering, Capital Cities eventually merged with the ABC television network, which eventually merged with entertainment giant Disney, making Warren billions in the process. Good things do come to those who have patience and foresight.)


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I am now fully convinced that investing in Mutual Fund with a long-term perspective is a bad idea…and have vowed never to invest in it 🙂


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