Unicorns & The Stock Market

unicornWhat is a unicorn? This is a tech blog so you can already assume I’m not talking about the mystical animal with a single horn on its head, often accompanied by a rainbow of colors.  “Unicorn” has become a widely used shorthand for startups who have won the techie jackpot: companies that are worth $1 billion or more, solely through fundraising and the generosity and faith of venture capitalists. (Mashable)

Feel enlightened? Great! Now we can talk about the issue at hand – How and why  famed Economist Paul Krugman, who I love to read in the New York Times, thinks situuations like Unicorn-tech-companies could be a significant contributing factor to an upcoming “bubble” (see also housing bubble). In a recent article, Moveable Glut,  Mr. Krugman starts off by asking the question, “What caused Friday’s stock plunge? ” Half-way down the article, he tries to answer that question, “Instead, what we’re seeing is what happens when too much money is chasing too few investment opportunities.” THIS is the connection to unicorns and the stock market. Let me explain.

The Street has already warned us to Expect a Bumpy Ride when the ‘Unicorn Tech Bubble Pops – “As to what pops this particular bubble…  it will likely be a number of factors including the recent Chinese devaluation of its currency [check] and higher interest rates in the United States [likely coming]. He said public investors will feel the consequences when this bubble deflates because pension funds are putting money into unicorns as well via hedge and private equity fund investments.”

Once you connect the dots, all of these predictions are coming to fruition. So who are these unicorns? Well, older unicorns (like Google, Apple) have already taken a hit on the market in recent days; but, long term,  it’s the newer younger unicorns that are causing the angst.  Fortune maintains a list of the newbie unicorns. And you’re probably already familiar with at least a couple in the top 5:

  1. Uber – Get a taxi, private car or rideshare from your mobile phone
  2. Xiamo – Maker of consumer electronics.
  3. Airbnb – Rent unique accommodations from local hosts in 190+ countries
  4. Palantir – Software connects data, technologies, humans and environments.
  5. Snapchat – Photos, videos disappear in seconds

So what does all this mean?

  • POINT #1: “This most recent stock dip will be tough for even the most bullish venture capitalists to ignore, and it could compel them to start asking more from the startups they back.”
  • POINT #2: “For some time now, investor Bill Gurley has been predicting that there will soon be some “dead unicorns” in the tech industry, thanks to a complete “lack of fear” in Silicon Valley that is sending these valuations soaring.”

There is your answer,  Dead Unicorns (Wired). We already know tech companies are becoming more popular and prevalent on the stock market (see also Facebook IPO botch). Will these unicorns survive? Will they make it to the stock market? Once there, will they crash and burn or thrive? It’s all yet to be seen!

Meanwhile some people actually believe, “the US Federal Reserve, the European Central Bank and the Bank of England — have caused this bubble by keeping interest rates very low for a long time. Those low rates — effectively zero percent across much of the West since 2009 — have made money incredibly cheap to borrow. That has allowed investors to pump money into projects that wouldn’t get funding in any other environment.” (Business Insider)

Tech, Unicorns, Interest Rates, Pensions, Stock Market = all connected

#read #readAnything #StayInTheKnow

Algorithms Everywhere

I love MATH, LOGIC, PROBLEM SOLVING and COMPUTERS – not just actually using them, but the actual process of coming up with and building rules to make them behave in a certain way and telling them HOW to do it (that’s called an algorithm and that’s what Software/Computer Engineers do!). Did you know that lots of things we do, see and experience everyday involve algorithms? Unless you’re wired to think “computer logic” and “exceptions”, you probably don’t have this at the forefront of your mind. From HowStuffWorks:

To make a computer do anything, you have to write a computer program. To write a computer program, you have to tell the computer, step by step, exactly what you want it to do. The computer then “executes” the program, following each step mechanically, to accomplish the end goal. When you are telling the computer what to do, you also get to choose how it’s going to do it. The algorithm is the basic technique used to get the job done.

 

codeThink about it this way – how does the computer (or cell phone) know what to do when you click on that mail icon? A set of instructions, or algorithms tell it exactly what to do! Here’s an example using the mail icon on your computer. If a user left clicks on the mouse, open Microsoft Outlook; or, if the user right clicks on the mouse, “show options”. That’s the simplistic version of pseduo-code (instructions in English) a programmer would then translate to computer language (JAVA, C++) for it to do – no a computer does not speak English?!

io9 published 10 algorithms that are common in daily life. I added a few notes of questions one may ask when thinking about the impact of the algorithm in these tasks:

  1. Google Search – Which sites should be return when the user types “recipes”?

  2. Facebook’s News Feed – Which stories to display?

  3. OKCupid Date Matching – How do “match” people?

  4. NSA Data Collection, Interpretation, and Encryption – What makes a conversation a threat?

  5. You May Also Enjoy…” – How does Amazon know which books you’ll like?

  6. Google AdWords – Which ads should be shown to women?

  7. High Frequency Stock Trading – Read this post

  8. MP3 Compression – How do we get that song from your laptop to your iPhone?

  9. IBM’s CRUSH – How do we determine high-potential crime areas?

  10. Auto-Tune – How do we translate human voice to a cool tune?

So there you have it! A world of algorithms! Who knew?! For all the engaged gals (and guys) out there, here’s a little algorithm for determining who should be on your guest list! 😉

For more wedding tips, click here.

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