Category: machine learning

Gear up for Online Trading
We end the year once more with trading: a topic that might not be directly tech-related. It, however, relies heavily on online technology to help with investments and therefore, is noteworthy.

More and more millennials are getting into the habit of adopting get-rich schemes. You just have to look on Instagram and Twitter to see how gullible some of them are to Ponzi-like schemes preying on online and financial naivety.

It has become so cumbersome as most of the predators ‘befriend’ you only to present you with the offer to trade (Forex, Binary options, or mine Crypto) on your behalf. Some blatantly just ask for you to deposit cash (usual increments of $500) into unknown accounts!

Nothing to perform due diligence is available and not even a website sometimes – just the promise of profits of up to 30-80% weekly, monthly, or whatever – it’s all clickbait!

A notable 60 percent of high net worth individuals (HNWIs) in Latin America alone showed high-interest levels in Crypto investments in 2018.
Capgemini’s World Wealth Report 2018.

You can, however, as we mentioned around this time last year, take full control of your financial destiny.

When it comes to managing an online portfolio via a broker such IQOption, there are a few things you have to consider first before dropping cash into your trading account.

Checklist

Research
- Equities (Shares or stocks, ETFs, Commodities, Indices, Options, Forex, Futures, and Cryptocurrency). These are all vehicles you can engage with concurrently in the same portfolio. They all also have their (moderate to extremely high) levels of risk. Learn how each of them works. Shares are actually the less risky of the batch nowadays.
- Have a plan! One does not just opt to invest in equities to “make money”. Of course, you will make (or lose) money. The question is how much and within what timeframe? When are you looking to have the money back? These questions will help determine what kind of investor you are or the approach to adopt when investing.
- Based on your knowledge, appetite for risk, and the associated costs, you will either be a long, mid (mixed), or short-term investor. The latter is referred more commonly to as day-trading. Long term trading works pretty much like savings. You buy the stock/share and hold it for a long period of time (shares/stocks and indices are the best vehicles for such). All the others can be bought and sold by the minute, hour, day, or weekly.
Setting up

Setting up with your bank means there is also less admin when it comes to verifying your personal details such as ID, physical address, and so on.

Be sure to have all documents ready and up to date. These are mandatory and required by local financial authorities to help prevent or determine fraud, the use of securities to launder money, or fund terrorism.

The bank trading brokerage fee can be waivered by going for an online broker independently if you have all your ducks (paperwork) in a row.

Costs

Once set up, there are further internal costs that the broker will charge you. Pay attention to the commission charged when you purchase security of choice. Some waiver it but then charge what is called a spread. Then there are other deductions such as a charge for borrowing money to trade – what is termed ‘overnight fees‘.

And of course – pay attention to TAX!
- Pay attention to all the associated costs. It costs nothing to setup an online trading account via a broker. Your bank may charge a brokerage fee for running a separate trading account. The advantage of that mainly is just the ease of adding and withdrawing your ‘winnings’.
We strongly recommend actively running a trial for at least 2 months before making your first deposit to start purchasing securities.

Some strategies

Before that first purchase, you should hopefully, by then, have used the trial period to learn some of the tools. Trading (or investing) is not something you do out of a gut feeling. There is about 3% ‘gut feel’ but the rest of the knowledge comes from studying the tools for technical and fundamental analysis.

Courtesy of cryptoworld.info

The difference between technical and fundamental analysis is the difference between trading and investing – without any, you are outright just gambling!

There are also some ways to mitigate your risk and minimize losses. One system that applies to all investing is called Dollar-Cost-Averaging. So, under this strategy, you divide the total amount into bits to ensure that on average your losses are smoothed out by profits. The diagram to the left illustrates this.

Budget within your portfolio

Always start small and see how that goes before diving fully in. People get greedy and think if $10 fetches a $5 profit then $10 000 would subsequently garner $5000 or at least $500. It doesn’t always pan out that way. If it was that easy we would all be millionaires!

One must also quickly avoid the habit of topping up the account to get the next hot stock because like a business, your trading portfolio is an investment for future growth. It must therefore, be nurtured that way.

Ride the waves (with your initial investment) and reinvest your winnings by ploughing back some of the profits into less riskier securities once you make a small ‘killing’.

Switch from a short to medium term trading approach to secure your profits. Many day traders end up losing all their gains because they stay in the game for too long. The stock market always turns eventually and gets its pound of flesh!

As a rule of thumb, purchase only after a massive drop in price – as you would in a fashion sale. When a security’s price has risen to abnormally high levels, its ‘bubble’ tends to ‘burst’. In addition, there are tools to measure whether a stock/share or any security for that matter is overvalued. Study them!

Market trends

The markets are constantly in motion and like a rollercoaster, prices are constantly going up and down. You have to choose where (and when) to place your buys (and positions) to make your profits.

Know the market (opening and closing) times so you do not miss a good deal. Many markets will either open with a big rally; cool off in the afternoon and then close with a sell-off (in the red) in the evenings in general.

What causes the up and downs is the buying and selling off respectively.

Based on that, and with the common knowledge that everyone sells at a high profit – what do you then think would happen after a massive rise in the price of a security? It is not rocket-science yet many people fall for it and end up buying at the height (peak) price of an equity.

Easier said than done. Naturally, it is hard to predict where this peak is as many inexperienced profit hunters have found out the hard way.

Markets tend to crash in predictable cycles. The Crypto market fell by a whopping 70% in 2018 – a monumental drop in market capitalization after its equally amazing 2-month bull run. Many individuals and companies who bought Cryptos in January 2018 as a result went down in flames because of such bad timing – and just plain greed.

These are just some of the basics to help you get into an investing state of mind – more particularly with online trading. You will find a few more useful pieces of information on the resources page.

Happy trading and remember to start of with a free trial!

General Risk Warning: The financial products offered by the company carry a high level of risk and can result in the loss of all your funds. You should never invest money that you cannot afford to lose.
7 January 2019
Get a vault for your data!

It’s not often that we readily endorse a product or company. However, when the type of work they engage in is considered groundbreaking – and one with the potential to have a massively, positive impact on our livelihoods, it most certainly warrants a mention.
The rationale for considering such tech-driven projects as highly significant is neither due to ‘gut feeling’ nor that it is cutting-edge/fascinating and therefore must be an excellent product – it actually has a value proposition for everyday people!
We are indeed well into the information age and while we have written extensively about data, its importance to marketers and its fragility when used and abused by unscrupulous third-parties for their financial gain, the issue of data security is quite a serious issue – we must just pay attention to the news to become even more aware.
In Europe, the where security is supposedly more advanced, we have seen the likes of renowned airline British Airways, being hacked – with several hundreds of thousands of customers’ personal data compromised. This was followed by hacks on other major airlines such as Cathay Pacific. Aside from airlines, other business outfits have suffered a similar fate.
The perpetrators are getting a lot more brazen and very recently, a cable car, used as public transport in Moscow was hacked, leaving vulnerable passengers terrified and stuck high up in the air – probably to the amusement of the pranksters (hackers). We all know about driverless buses and cars coming to the market soon.
Can you imagine the chaos and commotion that would be caused if their control systems were to be hacked? The hacks get even more sophisticated: this time, affecting the very wealthy – private yachts are being hacked and taken into the pirate waters, all via uniquely coded signals, reading data from their antennas!
On the issue of data security (with almost full anonymity); we have also heard about extra protection (and not just anti-virus and anti-phishing software) but the more secure and heavily encrypted Blockchain technology that is making waves in the digital sphere. Mainly for the escalation of its once shining star by-product designed for discreet transacting – the Bitcoin.
It has also triggered several other technologies based on its digital cryptology technology to ensure that information is kept safe from prying eyes while stored, used or transferred online.
The company we chose to highlight uses a unique vault system and is called Zortrex. It has adopted one of such Blockchain technologies dubbed tokenization – and will be using it to initially ensure that highly sensitive data online is kept safe.
“Our tokenised solution would have protected their customers’ personal identification information (PII) details, instead the hackers ran off with the date of birth, passport numbers, financial data etc,” says Susan Brown, Chairperson of Zortrex – relating to the British Airways incident.
“Tokenization is the process of converting rights to real-world assets into a digital token on a blockchain.”
The establishment of this start-up company was due to Brown’s background in data privacy systems as well as her devoted passion for the protection of PII and financial/healthcare data. In her view, companies have disrespected their customer data for over 25 years, and if left unattended, there will be nothing left to protect.
Thanks to new laws like the European GDPR law which is now imposing the data protection; data breaches and abuse of customer data is now met with hefty financial penalties. Companies now think twice about consent and how to use and share customer’s data digitally – but is it enough? The simple answer is a no. The authorities just do not have the resources to investigate every complaint nor to actively enforce all data breaches – yet.
“We have ingeniously invented systems that automatically align with financial messaging, payments and securing information, all of which require data. However, we should and need to go a step further to secure all the PII details with tokenisation so that in the event of a hack, the cookies and trackers will only be following a useless token as there is no real identification on it,” Brown explains.
Zortrex would naturally like to tokenise all healthcare data so that vulnerable people living outside of major cities can also feel assured that their privacy is protected. In a previous blog, we wrote about the new Internet of things (IoT). For all those devices being built for it, their IP addresses and the serial numbers can be tokenised to avoid the terrifying thought of the whole Internet being compromised.

The application of the all-powerful Blockchain is not limited to use in the financial sector and will be applied via the supply chain to all industries that deal with customer data – especially the most sensitive ones.

An angel investor or any investor for that matter looking to get onto the next best thing since Amazon would therefore be unwise to pass up the opportunity to back the Zortrex venture given its scope!

Furthermore, regulations are currently being implemented primarily in the pharmaceutical sector and a tokenised supply chain such as what Zortrex offers would be ideal for this new law which is planned to be implemented by 2023. A judiciary blockchain, for instance, would enable the police to “talk” to the prison service, who in turn, will communicate with the legal sector and public health institutions such as the UK’s NHS.

Forensic evidence would in such instances be tokenised and kept secure (away from tampering) during legal hearings. In another practical scenario, Smart Contracts (which are touted to replace lawyers) can spark off legal aid assistance, so that court cases can be heard quicker, more efficient than currently pertains. Protection registers can also be protected with tokenisation rendering it more secure.

Blockchain technology offers quality assurance with every process being undertaken making sure that no shortcuts happen; as the smart contracts trigger any possible malfeasance. This will enable the monitoring/tracking of any data sharing to third parties once it is tokenised. The third party apps would only gain access to the data once the trigger has been activated.

The company will be providing numerous business blockchain platforms; Asset Chain, Supply Chain, Accountancy Chain, Debt Chain, Life Cycle Management Chain, Outsourced Worker Chain; the list is endless, and all will be adequately secured.

Like other pioneers and visionaries, Brown’s futuristic hope that every child being born will have their name, date of birth, blood type data being tokenised, might seem farfetched – but may we remind you of the need for data protection taking into consideration the growth rate of massive data breaches.

Zortrex is aiming high and wants to use their technology to put the hackers out of business! Tokenisation cannot be mathematically reversed and thus it will least it will stop the hackers for a while.

Brown explains further that as they move with their education; other information can be added on to the token, as with all their healthcare; any allergies tokenised; what injections they have had right through their life cycle until the day no more data can be tokenised.

For such high ambitions, the creators of Zortrex’s software have adequately ensured that the technology used is fully scalable. One stumbling block many Blockchain projects now face is what is referred to as scalability – which in tech terms, is the ability of a network or software to grow and manage increased demand.

Cryptocurrencies like Bitcoin and Ethereum specifically – which is used to build a lot of Distributed Applications, has massive scalability issues. The growth in demand for DApps is crippling those systems and they are having to investigate the incorporation of alternative technologies, upgrade or split their platforms and accompanying cryptocurrencies to cope with such high demand.

Someone must take the first step in securing this data forever. Citizens should be able to purchase what they want without being harassed by trackers and cookies. The need for tokenisation is endless and further, down the line, celebrities and government official’s PII can also be secured to protect them from damaging schemes, ‘bad press’ and scandals.

In another previous blog, we “prophesized” that data is the new commodity – like gold or oil. However, the actual value with that data will lie in its privacy, the ability to store it securely and unlock it only with legal permission by its rightful owner.

19 December 2018
Digital Dribs & DApps!

We have barely scratched the surface with the Internet (from the early eighties) and it is already seemingly being threatened with the competition. A possible replacement by a new phenomenon.

Well, for lack of a better word, “replaced” has connotations of a dying Internet. This is far from accurate. This new phenomenon – fostered by blockchain technology, will change the way we use and consume the Internet as a service.

So, what is this new Internet-like system creating waves online? And why is it making online marketers quiver at the prospect of them losing out on the exponential revenues they have previously enjoyed?

Well, without hyping it up any further, it is called Distributed Applications or ‘DApps’ for short.

A brief history of Apps

Before we delve further into its meaning and use in the cyber world, perhaps some background context is required.

The way we use online or mobile applications software or “Apps” has changed how we consume products and services online. Companies jumped onto the bandwagon when they discovered that we mostly use Smartphones for the Internet.

App developers were then subsequently sought after to create mobile Apps for practically anything. What started as something mainly for gamers moved quickly onto applications for practically any commercial activity.

We now use Apps for our shopping; fitness; traveling; online bookings and banking. Developers now create customized software to help us with practically, anything.

In addition, we now have App stores for every significant tech provider – Microsoft, Google, and Apple to mention a few. This has naturally fattened the pockets of software companies and created an additional stream of income for them.

The ‘catch’ for using mobile apps is that even though it costs you nothing to download, using them still requires you to register with your personal details. You can also do this by linkingyour existing social media accounts.

The benefit to App providers

These Apps, which are integrated with social media services, create a data goldmine for marketers to study and track browsing habits. Through them, marketers can gain valuable insights into your interests and then customize their products/services to sell to you.

The impetus behind a distributed application system is that it serves to distribute plow some of the wealth garnered from your data via application providers back to you.

Data mining has become more lucrative and accessible because of Artificial Intelligence (AI) and Machine Learning. Do you ever notice how after browsing online or having a conversation or a chat application like WhatsApp or Facebook Messenger? You go online later, and you see Ads displaying the items you discussed? Creepy isn’t it? Well, that is the future of Web 4.0 for you!

Staying ‘woke’

Luckily for us, there is a school of knowledgeable and security-conscious programmers who are not ‘giving in’. They help us understand how the Internet has become a cesspool for marketers to harvest our data. Social media platforms, search engine providers, and mobile application providers facilitate them immensely with this.

Image Courtesy of blockgeeks

Imagine getting paid to surf the web for hours. The way you get paid for taking on a survey, partaking in a social experiment, donating an organ or sperm?

This is the way distributed apps are touted to work. They reward you for the use of specific applications (in a peer-to-peer review setting) with cashable tokens. Seems only fair right?

Now you can imagine how companies like Cambridge Analytica would react to having to pay you for their use of your data. They would surely be reluctant and that’s why they preferred to work clandestinely. But if they could pay companies like Facebook for the use of data, why not pay us directly?

Early adoption

Joining the ‘DApps revolution’ is a no-brainer. Those at the forefront of building and supporting DApps will end up with a more substantial chunk of the market.

DApps primarily provide you with the use of payment systems. These are specifically known as Smart Contracts and Proof of Work systems.

There are currently also web-browsers (built as DApps on blockchain platforms such as Ethereum or EOS) that will reward you for merely using their DApps.

For instance, you are rewarded in cashable tokens to surf the net over applications like Google Chrome, or Mozilla Firefox.

It is only a matter of time that this form of Internet-browsing and use of applications becomes the norm.

The Internet revolutionized the way we communicate, socialize, learn, shop, and do business online. DApps however, will determine the way you get compensated for doing the things you love to do online.

11 December 2018
3D Copy and Paste!

The bizarre-sounding digital printing phenomena called 3D-Printing has been mulling around from the past. Recently, has been in the limelight; specifically in the press for the wrong reasons.

Read about the new craze and get ideas for Xmas via 3D Copy and Paste!

15 November 2018
3D Copy and Print
The bizarre-sounding copying phenomena called 3D-printing have been mulling around from the past. Recently, it has been in the limelight; specifically in the press for the wrong reasons.

In 2013, a University of Texas law student, Cody Wilson created a blueprint for a single-shot 3D-printed handgun, named ‘The Liberator’.

However, guns have posed a serious threat to peaceful living when in the wrong hands. But what if you could hastily manufacture them unsupervised, from the comfort of your home?

His company Defense Distributed, had been distributing downloadable weapons plans for free. This would be great if it was planned to enable you to build something more useful to society.

The point is, with this new device, you can literally make a 3D copy of any imaginable object – even your food!

3D printing builds parts (mostly out of plastic) based on the central concept: using a digital model like your CAD drawing (Computer Assisted Drawing).

This is then turned into a physical three-dimensional object by adding material a layer at a time. This is where the formal name for 3D printing, Additive Manufacturing arises. They are no bigger than a normal Deskjet or heavy-duty paper printer and are quite a marvel to watch in action.

3D printing is a fundamentally different way of producing parts compared to traditional subtractive (CNC machining) or formative manufacturing technologies.

The brands

Some top 3D printing brands include MakerBot, XYZprinting, Formlabs, and LulzBot. You can pick them up from as little as $200 to $4000.

These prices naturally depend on your end product size, material, complexity, and level of detail you need.

The most expensive one, if you are into heavy-duty manufacturing would set you back a cool $2,500,000. That is the price tag for Imprimere’s Model 2156.

Some of the advantages of using 3D printers include:
- Speed: You can upload complex designs from a CAD model and print in a matter of hours.
- You have more design freedom. It gives you complete customization of designs.
- It is more eco-friendly: Additive manufacturing methods use only the material you need to build a component. You can recycle and re-use the raw materials.
- Costs: Compared to traditional manufacturing, the labour costs for a 3D printer are almost zero.
Image source: 3DHubs

Application in the world

Since its uptake in as far back as 2010, a lot of the products we use are manufactured using 3D printing. You will find its application mostly in the medical and dental industry and used for custom prosthetics, implants, and dental aids.

They are used to manufacture high-level sporting gear that is tailored to fit you perfectly. Naturally, you can also ‘print’ your own customized fashion accessories. This would give you more flexibility when it comes to your specific style, colour, and material.

For a more comprehensive comparison of 3D Printers available to you, look at the 3D Printing index on the resources page.

Here is a list of cool things you can create with a 3D printer. If you are looking for great ideas for Xmas or birthdays – this might just be it!
14 November 2018
3D Copy and Paste!
The bizarre-sounding digital printing phenomena called 3D-Printing has been mulling around from the past. Recently, has been in the limelight; specifically in the press for the wrong reasons. In 2013, a University of Texas law student, Cody Wilson created a blueprint for a single-shot 3D-printed handgun, named “The Liberator”.

Of recent, guns have posed a serious threat to peaceful living when in the wrong hands. But what if anyone could hastily manufacture them unsupervised, from the comfort of their homes?

Defense Distributed, Wilson’s company had been distributing downloadable weapons plans for free. This would be great if it was planned for building something useful for engineering and something practical rather than destructive. Point is, with this new device, you can literally make a 3D copy of any imaginable object – even food!

3D printing builds parts (mostly out of plastic or other synthetics) based on the central concept: a digital model e.g. a CAD drawing (Computer Assisted Drawing) This is turned into a physical three-dimensional object by adding material a layer at a time. This is where the formal name for 3D printing, Additive Manufacturing comes from. The actual printing device is no bigger than a normal Deskjet or heavy duty paper printer and is quite a marvel to watch in action.

3D printing is a fundamentally different way of producing parts compared to traditional subtractive (CNC machining) or formative (Injection moulding) manufacturing technologies.

Some of the top 3D printing brands include MakerBot, XYZprinting, Formlabs and LulzBot and are priced from as little as $200 to $4000 (for high-end small business-level) depending on the product size, material, complexity and level of detail required. The most expensive if you are into heavy-duty manufacturing would, therefore, set you back a cool $2,500,000 for the Imprimere’s Model 2156.

Since its uptake in as far back as 2010, you will now discover that a lot of the products already in use are manufactured via 3D printing. It is prevalent in the medical and dental industry and used for custom prosthetics, implants, and dental aids.

They are also used in the manufacture of high-level sporting gear that can be tailored to fit athletes perfectly. There is then, of course, the ability to ‘print’ fashion accessories which generally, would be designed to fit your specific style, colour and fabric/material.

Some of the advantages of using these machines include:
- Speed: The ability to upload complex designs from a CAD model and print in a matter of hours.
- It facilitates more design freedom; it also allows complete customization of designs.
- It is more eco-friendly: Additive manufacturing methods use only the material needed to build a part. The raw materials that can be recycled and re-used.
- Costs: compared to traditional manufacturing, where highly skilled machinists and operators are typically required, the labour costs for a 3D printer are almost zero
Image source: 3DHubs

For a more comprehensive comparison of 3DPrinters available depending on what you want to do with one (hopefully not to build weapons), look at the 3D Printing index on our resources page under technology.

Here is a list of cool things to create with a 3D printer if you are looking for great ideas for Xmas or birthdays – this might just be it!
14 November 2018
Can’t Get No Satisfaction

In economic terminology, the term “utility” has not much to do with multifunctionality nor completing specific useful tasks.

It does in context, relate to the level of satisfaction or “completeness” one derives from the consumption of a product or service. For example, there is only so much pizza you can eat before feeling ill from satiety.

On a broader and more macroeconomics spectrum, our utility levels will also help determine how resources are allocated and consumed.

Definition

The concept, a brainchild of Daniel Bernoulli, has so many relevant connotations. As humans, we individually have a maximum biological boundary which when reached, signals absolute satisfaction. This in economic terms is called maximum (total) utility.

Total utility is the complete satisfaction that you can get from consuming all units of a specific item.

Economists are more interested in the changes in levels of utility or what is referred to as the marginal utility.

We will return to its application to the economy.

Applying utility

Incidentally, the utility has no formal unit of measurement – though we coined the term “utils”. These so-called utils equate a number to utility levels in a controlled sample experiment.

Understandably it can be quite a feat to quantify utility as it is based on human behavioural preferences. The closest we got to quantifying such was via the marketing concept of the consumer black box.

As an illustration, the concept can be applied to something as basic as eating a delicious meal.

Depending on how hungry you were, you would derive the highest utility from the first few bites of your meal.

As you progressed and depending on your appetite, each additional fork/ spoon, or handful would provide fewer levels of satisfaction. As you reach your stomach’s capacity (towards satiety) your utility diminishes.

This can be applied to the taste of the meal. It specifically explains why we tend to eat something sweet after a main (savoury) meal.

The appreciation of ice cream when you are starving would diminish quickly as you concentrate on filling up your stomach. This as opposed to enjoying the taste.

When compared to the running of an economy, governments and policymakers can determine which goods and services yield the most utility.

This helps them to consequently direct expenditure to identified priority areas (products/services).

It is a long term concept

Education, for instance, may not provide immediate utility (gratification) for scholars and pupils. However, when appropriately harnessed, could yield higher levels of satisfaction. This is when you enter the job market with better remuneration packages.

Tweaking education curricula, taking into consideration levels of utility to whip up your interest for the good or service. This should, therefore, be a prime focus for legislators.

Inputs such as maximum times you can concentrate and the length of study for a course should be offered without compromising the substance.

Without a doubt, there would be considerations, at a micro-level to assist in enhancing both marginal and total utility in the education sector.

Read more about fiscal policy and budgets here

More life-related uses

The concept of utility is a lot less ubiquitous as we think and relates to the unsavoury phenomenon of megalomania and why there is greed.
When levels of self-gratification diminish quickly, it takes longer for those with lower levels of marginal utility to reach a plateau of pleasure.

Drug addiction, sexual appetites, and fetishes would then kick-in. In such cases, people upgrade the “product or service” that they have already maximized utility in. At that stage, another level of fulfillment would be sought.

The utility applied to finances

It also explains why you lose a lot of money gambling or investing in stocks. The satisfaction of gaining more for a little outlay will often drive you to take more risk until a level of risk aversion kicks in.

High-risk investors “called whales” are now delving into the Crypto market to maximize their utility. They are diverting their funds from property and stocks into digital currencies like Bitcoin and Ethereum.

The saying too much of a good thing is inevitably bad for you applies. It can be countered by diversifying the things that deliver pleasure or satisfaction to you.

This is to ensure that you do not maximize utility on them too quickly and lose interest. Worse case, you end up delving into the dangerous territories of addiction.

Economists need to be relevant, more than ever before. They also need to formulate a means to measure and quantify utility or provide “utils” for at least, the most common goods and services.

With such a strategy, policy-making, product pricing, and the efficient allocation of resources would be more effortless.

11 July 2018
Piggybacking on company shares

It is clear that the business of share trading and its intricacies still create a dark cloud for many of you. This is, however, a rather unnecessary element of sophistication.

It is only fair to, therefore, delve in and break it down by discussing not just the way to trade, but the whole point of it.

While trading may seem like something only smart people engage in, this is, however, not the case.

What are shares?

The first thing to understand is that shares (referred to as stocks) entitle the holder to have part ownership in a company.

So, if you own a share in, Amazon, Manchester United, or a Cryptocurrency company like Ripple – you literally OWN a part of that company.

You are basically co-owning with other stakeholders of the company. This with the hopes that the people who run it will increase the monetary value of your shareholding by making the company a success.

Now your share will determine what level of control (decision-making) you have when it comes to the company’s operations.

Naturally, owning just one, ten, or even 1000 shares of Amazon (a hefty $1400 each today), still does not entitle you to have a say in how it is run.

As the majority shareholder, you would probably be the company owner (chairman/founder) or one of its board of directors. To gain such a majority shareholding and full control of a company, the minimum number of shares you would need would be 51% of all shares issued. Good luck obtaining that many!

The rationale for issuing shares

But let’s take a further step back and unravel why shares are issued in the first place. Your company (hopefully) has value because of its ability to generate revenue. This makes it a constant target for investors in a capitalistic market. Wealthy individuals carefully monitor its value to brace for a potential takeover or for just a piece of the pie.

To get listed on a stock exchange your company will decide how much of its equity to publicly issue as shares. You can even issue shares to raise more capital to help grow your business.

This form of equity will be backed against your total assets (and its debts) on the balance sheet. So hypothetically, a company with 100 Euros worth of assets and liabilities has 100 Euros worth of (owners) equity.

This basically enables you to determine its net worth at a given point in time.

The easiest way to remember this is through this basic accountant’s formula:

Total Owner’s Equity (OE) = Assets (A) + liabilities (L).

The shares are accounted for in the OE and are issued in denominations based on various factors. This helps to provide you with an indication of the relative strength (or weakness), or potential growth rate of the company.

What do they tell us?

The (snapshot) total value of the company is thus determined by its share price multiplied by total number issued. This is referred to as its market capitalization. There are several other measures and tools to evaluate the general health of a company.

Rising share prices, though always good, does not always necessarily mean that the company is great value for money. This is because share prices can also be undervalued or overvalued.

Shares for large companies are naturally offered in millions and via an initial public offering (IPO) from as little as one cent (penny stock), or much more (depending on its valuation). Thereon, it can rise astronomically to what was quoted for Amazon earlier.

Where to get them

The open market or local bourse is where you can buy and sell shares at specific times depending on side of the world it is located.

Obtaining shares come with additional costs (brokerage fees, commission, interest payments in cases of leverage buying, etc.). Depending on the terms and conditions in the overall market (regulations), but more specifically, on the company or broker offering you access to shares.

A good company share will also give you a return on an annual dividend. This is basically a share of the company’s profits over and above its share price.

It is a good idea to include high dividend-yielding shares like Coca-Cola, in your trading portfolio – if you can afford them.

Influencers

Once you purchase your stake in the company, you will naturally, even if you don’t have a controlling say in how the company is operated, take a keen interest in the company’s activities.

Everything it does whether internal operations or outside for that matter, will have an impact on its valuation.

Naturally, investors follow the age-long rule of common sense: buy when the price is low. If you missed the IPO and the price dips, you can always get in at a good (low) price. The stock market runs like a rollercoaster – you just need the right time to hop on!

“Unless a company goes belly-up, a share-stock price that is going down is actually going up – in the long run.”

Obviously, the price (trend) is not always upward and one must be prepared to weather such storms. You shouldn’t have to be continuously focusing on the price after thorough due diligence on your chosen company.

Read more about Due Diligence here

Choosing a good stock and leaving it to work is the best advice you will get. This is because you can become emotionally attached to the performance of the shares and that can affect your mood.

There are also a lot of trading tools to help prevent a total meltdown if the company folds-up. This can be due to external factors like fraudulent scandals or government intervention. Keep tags now and then – this is important.

The recent events and scandal faced by Facebook saw it lose a significant amount (billions of dollars) in it the value of its share price.

Read more about investing here.

Short-selling of shares/stocks

There are also ways to “have your bread buttered both ways” in investing. This is where the concept of short-selling comes in.

So, while we all inclined to bet on a company’s stock to go up – there are groups of investors who bet the other way. They have the hopes (based on indicators) that the price will rather drop.

This seemingly dubious form of trading is perfectly legit but comes, naturally, with an even higher level of risk. If the price increases in favour of all ‘normal’ long-term investors – the short position starts losing money. You may even have to fork out more to cover the amount borrowed to make the short-sell in the first place.

Short-selling is, therefore, if you are inexperienced and ill-informed!

So, you “buy” or rather borrow (leverage) the future value of the share/stock price usually at its apparent peak and hope that it will drop. You will continue to profit from the bet by as much as the share price continues to drop.

Earlier in the year, one such investor dubbed “50 Cent” bagged 200-million-dollars in a major shorting stint.

Shorting a stock is a complex, risky but highly lucrative method of balancing out a portfolio. A seasoned trader will, therefore, have several positions including some “buy” and “sell” positions on their chosen shares.

You should have various mechanisms (take profits and stop losses) set in place to execute their trades based on those positions.

Naturally, you wouldn’t just short a stock if you didn’t know something about what factors were to lead to a sharp/large drop in the share price.

But getting this right is often an exercise that straddles a fine line between being well-informed and intuitive and blatant insider trading.

The bigger picture

So, in summary, shareholding generally occurs when you acquire a stake in a business. You can own intellectual capital, founding rights, or be s a funder/seed investor to help start the business.

So why do companies issue out shares to the public again you might still ask?

Think of share listing as a way for your company to hold itself publicly accountable. is the ultimate branding weaponry in its arsenal and quest to exponentially increase its profits.

24 March 2018
The Big ‘Crypture’

I’m not quite sure if anyone has given some careful thought – in the heat of this ‘Crypto mania’. More specifically, have you ever considered the ramifications of the blockchain and its impact on the global economy?

This is an attempt to perform a calculated prophecy, based on the conversations we’ve had with like-minded visionaries.

An introspection into this ‘much-talked-about technology’ has led to endless possibilities.

Presently, every Tom, Anastasia, and Patel are pursuing short-term gains. You are all probably investigating ways in which they too can “cash in” by investing in new digital currencies.

This frenzy is mainly driven by how some of the altcoins are performing in value. Some digital coins are rising as much as 1000% in a ‘Crypto bull-run’. But the real appeal for digital “currencies” comes from the security, speed, and cost of transactions they facilitate.

A case for Cryptos

Most of you are understandably looking at it solely from an investment point of view – after all, greed never sleeps.

Also, let’s not forget the anonymity it affords one – great for criminals and money launderers. Because of the increased risk, monetary authorities and regulatory bodies will make a case for tighter controls.

They may even push for the outright banning of this new currency altogether.

Retail banks, are currently entrusted with the movement of your funds (electronic transfers) and are governed by economic monetary policy. This happens under the watchful eye of big brother – the Reserve Bank.

These commercial banks are the “primary targets” so to say of the blockchain. They were, therefore, the first to react by investing or attempting to start up their own blockchains.

Such projects, however, prove to be expensive and still risky ventures given that no-one knows the source and destination of the blockchain.

Banks are nevertheless having to either make quick decisions about whether they get on board or partner with developers of Cryptos such as Ripple).

We also look at other financial institutions such as credit lending facilities and money transfer institutions. They are also are naturally in partnerships with the banks. They, however, stand to get wiped out by the blockchain if you think about it.

Really, who would want to cough up a 10% commission or a transfer fee for money sent abroad to your family? You could simply use something like IOTA which, by the way, is as a Crypto hovering around 3-5 USD (at time of publishing) per unit.

It is capable of transacting very quickly and securely with no transaction fees!

And how so you may ask? Those details are listed clearly on their respective websites.

Peer review functionality

It is the belief that the plan for Cryptos’ was to enable anyone to have access to a shared (decentralized) peer-to-peer type service that enables the secure transacting of literally – anything!

You can look at the blockchain working in the same manner as BitTorrent or E-Mule (for those who remember that far back). In the way, that data, albeit mostly bootlegged music, videos, and software, was distributed and downloaded on the web.

“Blockchain is essentially a quick peer-to-peer transaction of digital currency”

The value of Cryptocurrencies is now driven by how well it works as a system. You must look more closely at the added value it can offer society from a functional, practical, convenient, and of course, cost-saving perspective.

A real threat?

So, what does that then mean for companies like Visa, Mastercard, or even a digital banking app like PayPal?

You can also imagine the implications for investment banks and their traders. That is if markets such as the very volatile foreign exchange (Forex) are completely abandoned and substituted by Cryptos.

There are now many an exchange for Cryptos in the appearing monthly.
You will be able to switch or trade Bitcoin for Ethereum, Litecoin, IOTA, or Ripple.

Handy if you need them quickly for a specific transaction, country, or product that accepts digital currency.

More practical uses of Crypto

The purpose of ‘Cryptos’ running on the blockchain is, therefore, to change the way we transact and pay for goods and services.

The aim was to make it a ‘form of exchange’ but also to provide the resources for you to “mine” and own them. This can be an alternative income generator alleviating the need for job creation. It can also be a substitute vocation for those you who were perhaps made redundant by automation and AI.

So, once you mine the currency (provided you have the infrastructure and pay the overheads), you can use it to get the things you need or must pay for.
Your electricity bill, for example, can then be processed and paid for directly from an IOTA-holding wallet.

Speaking of electricity, we came across a very insightful article (referenced in the resource section) focusing on the impact of energy consumption that global rampant mining will cause the price of electricity and the environment.

Coupled with the switch to electric cars this could surely force you to invest in better ways to generate electricity. That is if we are to maintain sensible levels of sustainability.

Whether the price of electricity goes up or down will be determined by how quickly energy providers globally will be able to meet this surging demand.

We can surely be in a position to observe the upcoming impact on electricity consumption from next year.

More and more of the global population are beginning to mine altcoins for themselves.

As we head into the festive season and bonuses are being paid out, be responsible for how you splash out. Do your research first – even if it means waiting a year to see how it all plays out.

22 December 2017
Rise of the machines

As a young man born in and living in Pretoria South Africa, multi-billionaire Elon Musk – better known for pioneering the Tesla battery-operated motor concept – was shunned by the Industrial Development Corporation several times.

His innovative ideas were denied financial backing so he moved to the USA for better support. The rest as we all know is history.

The futuristic thinker, however, took a rather skeptical and worrisome handbrake-turn when it came to the topic of artificial intelligence (AI) and its benefits to society.

When a man like that with so much insight into technology warns of its potentially harming effects, it warrants notice. Musk warned that its use could foster ‘the coming of third world war’. We have to for such reasons, delve a little deeper into the topic.

We have rapidly progressed from longer periods of stone, iron, industrial, to that of space, technological/information ages. The world is now apparently fused between the latter three.

Despite skipping a few ‘crucial’ stages, we have now surged into the age of digital automation. This is while sadly still dealing with the ravages of poverty, disease, and irreversible damage to our environment.

Automation & AI usage

Automation is helping business through software like ERPs that take over traditional back-office finance and operations.

In the IT industry, the Internet of things (IoT), cloud services, and general Software as a Service (SaaS) have simplified things for IT managers. You can now just monitor and attend to more pertinent issues and tasks (hopefully not just stream movies and play games on duty).

While seated comfortably, you will be able to now perform tasks such as deploying new software, installing/removing updates on multiple machines/devices simultaneously. All with a push of a few buttons.

Trading bots

In the high-risk investment scene, automation has given traders more room for better research and analysis Thus relieving you from the known stresses and mundane tasks associated with trading.

For many trading houses and brokers, AI has even completely taken over the mundane task of making and executing trades.

Advert

If you haven’t already, read this great book entitled: The Fear Index (thriller by Robert Harris). Though fiction, it illustrates the use of a machine learning tool using algorithms to help a hedge fund company generate billions for its investors.

The use of AI is not without fault. It can also lead to costly system-generated errors like the trading error a few years at Goldman Sachs cost the firm $100 million and other cases.

Other use cases

It can still, on a ‘micro’ level, help free human capital (individuals) from PC-related issues. So things like having stress, headaches, backaches, and lack of time spent with family and friends can be a thing of the past.

In the industrial and manufacturing sectors, the advent of AI creates even more of a fear and a concern. The number (staffing) of redundancies, may increase when it is introduced.

This would require careful planning to ensure the blue-collars that are ‘replaced’, are compensated. More so, they would need to be incorporated into different areas of businesses.

Limits of robotics

Obviously, not every task need to be automated or performed by robots. We (as humans) are still required to check-up, inspect, and perform quality checks for instance.
We can, as a result, deal with inter-personal jobs that require more empathy like in customer and social service.

Human resources or getting into corporate social responsibility (CSI) projects that reach out to communities.

Embracing it

More importantly, policies by governments will need to focus ever so more on job-creation. Governments must now adopt innovative means of creating jobs or foster and supporting entrepreneurship. Projects like those of Mr. Tesla/Mr. PayPal/Mr. SpaceX has created thousands of new jobs.

As for the use of AI in weaponry and military defense systems, the less said the better. When it comes to privacy and security concerns we can only hope that rogue politicians don’t get unregulated access to such technology. In such a case we would only be able to protest and hope not to feature in a real-life James Cameron sequel to Judgment Day.

3 December 2017

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