BC FINANCE
Saved by @tradrdoc

Our intuitions often leads us astray. A good reminder: study counterintuitive math and economic results.

Here are 9 of them 🧵

 The Birthday Paradox

In a room of 23 people, there's a >50% chance that 2 people share the same birthday.

This type of probabilistic thinking does *not* come naturally to many people.
The Coastline Paradox

Fractal geometry is also confounding:

The coastline of a landmass does not have a well-defined measurement. As the unit of measurement gets smaller (eg. from KMs to cm), the length increases without limit.
Winner's Curse

In an auction, the winning bid will usually exceed the intrinsic worth of an item leading to a significant overpay (and negative net profit for the winner).
Braess's Paradox

Removing an extra road can make everyone's commute time faster.

Why? The existence of a "fast" road leads to congestion because everyone uses it. If you remove the shortcut, traffic flows better.
Market for Lemons

If a seller has slightly more info than a buyer (eg used cars), it can lead to market failure:

◻️Buyer will pay price below market (b/c they can't confirm quality)
◻️High-quality sellers leave market b/c can't get good price
◻️Only low-quality sellers remain
The Potato Paradox

If you take 100lbs of potatoes which are 99% water by weight and you let it dry so that they are 98% water, their new weight is 50lbs.
The Pizza Paradox

One 18-inch pizza has more "pizza" than two 12-inch pizzas (still trying to process this fact).
Littlewood's Law of Miracles

An example of the law of large numbers: A person can expect to experience events with odds of one in a million at the rate of about once per month.

(Similarly: in a world with ~8B people, a one-in-billion event will happen 8x a month)
Queuing Paradox

If bank customers take on average 10 minutes to serve and they arrive randomly at a rate of 5.8 per hour...then the waiting time for

◻️one teller is *5 hours*
◻️two tellers is *3 minutes*

Waiting time is reduced by 93x by adding a second teller.
PS. I write interesting threads like this 1-2x a week. Follow @TrungTPhan to catch them in your feed.

Also check out my weekly Saturday newsletter:https://t.co/jGZs8brnVR
Sources

Here's the breakdown of the queueing theory: https://t.co/2vunn5mMTz

Check this awesome article for dozens more counterintuitive math, science + physics facts: https://t.co/8sejjm6AkH
VERY counterintuitive fact: Gabriel's Horn is a geometric figure with:

◻️ *infinite* surface area
◻️ *finite* volume
Deep dive on the Birthday Paradox https://t.co/3AAXUUVGP9

More from Trung Phan 🇨🇦

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𝚃𝚛𝚞𝚗𝚐 𝙿𝚑𝚊𝚗 🇨🇦...
@TrungTPhan
1/ Amazon is famous for its writing culture:

• "Mock press releases / FAQs" for new product pitches
• "6-page memos" instead of Powerpoint

Two former Amazon execs wrote a book called "Working Backwards" detailing the philosophy.

Here are some insights 🧵


2/ The "Working Backwards" playbook

Instead of creating a product then finding customers, Amazon asks "What does the customer need?" and works toward the product.

✅Customer need --> Create product
❌Create product --> Find customer

3/ Write a mock press release

To determine if the customer need makes biz sense, employees write a press release:

• What problem is the new product solving
• Why it's better than existing options

To persuade a customer, the document has to be jargon-free and tell a story.


4/ Press release forces big thinking

You don't write a press release for an incremental improvements.

Creating a product worthy of a press release means really solving a customer problem and going after markets with large TAMs.

5/ Include an FAQ in press release

Addressing every potential customer question can help identify hurdles to getting something to market...and also uncover opportunities.
CULTURE
\U0001d683\U0001d69b\U0001d69e\U0001d697\U0001d690 \U0001d67f\U0001d691\U0001d68a\U0001d697 \U0001f1e8\U0001f1e6
𝚃𝚛𝚞𝚗𝚐 𝙿𝚑𝚊𝚗 🇨🇦...
@TrungTPhan
1/ Marcus Bullock went to prison in the mid-90s at the age of 15.

Today, he's the CEO of Flikshop -- the "Instagram for the Incarcerated", an alternative to the outrageously expensive phone call system.

This is a truly inspirational founder story 👇👇


2/ In 1996, Bullock was living in Maryland. One night, he and a friend carried out an armed carjacking on a man sitting idle in a shopping mall parking lot.

It was the biggest mistake of this life.

3/ Several years prior to hit actions, there was the famed 1989 Central Park "Jogger Case", in which 5 minority youths were (falsely) accused of raping a jogger.

In the aftermath, nearly every state passed new laws that made it easier for courts to try youth as adults.


4/ For the carjacking, Bullock was charged as an adult and served 8 years in prison.

With onerous prison phone charges ($18 / 15 mins), Bullock's mother kept in touch with him by sending a photo or letter every day.

"She saved me," he says of his mom's efforts.


5/ The $1.2B+ prison phone system is dominated by 2 PE-backed firms (Global Tel Link, Securus Tech).

For the right to operate these phones lines, prisons effectively pay kickbacks to state and local government. The highest kickbacks win bids, which drive up costs.
CULTURE
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Trung Phan \U0001f1e8\U0001f1e6
Trung Phan 🇨🇦...
@TrungTPhan
For decades, Jeff Bezos shunned ads.

But now, Amazon’s ad business is huge: it’s on a $30B+ annual run rate (more than 2x the combined sales of Twitter, Snap and Pinterest).

Here’s how it happened 🧵


1/ Amazon doesn’t break out its ad business separately in financial filings. However, most analyst believe ads make up the majority of its “Other” revenue segment.

This figure has exploded from $1B in 2015 to a current annual run rate of ~$32B.


2/ In 2009, Bezos said “ads are the price you pay for a crappy product”.

But the business is so lucrative that Amazon’s interface has been swamped with ads:

◻️ First 3-7 search results (left in red)
◻️ Most of the product page (right in blue)


3/ Prior to the rise of ads, Amazon set out to build the ultimate organic customer recommendations engine.

The approach was codified in a famed 2003 research paper: “Amazon Recommendations: Item-to-Item Collaborative Filtering.”


4/ In recent years, Amazon organic recommendations:

◻️"Customers who bought this also bought this"
◻️"Customers who viewed also viewed"

Have been replaced w/ ads:

◻️ "Sponsored products related to"
◻️ "Brands related to this category"
TECH
Trung Phan \U0001f1e8\U0001f1e6
Trung Phan 🇨🇦...
@TrungTPhan
The most memorable interview I did this year was w/ Stanley Druckenmiller, who famously made $1B shorting the British Pound.

The trading legend's track record includes a 30-year stretch returning 30%+ a year (without a single down year).

Here are 8 investing lessons🧵

1/ Make concentrated bets in high conviction plays


2/ Concentrated bets can sometimes *reduce* risk


3/ Use a multi-disciplinary approach to investing


4/ Know when to sell (he never uses a stop loss)
FINANCE
Trung Phan \U0001f1e8\U0001f1e6
Trung Phan 🇨🇦...
@TrungTPhan
A Netflix user will browse the app for 90 seconds and leave if they find nothing.

Thumbnail artwork is actually NFLX's most effective lever to influence a viewer's choice. A user will look at one for only 1.8 seconds, so NFLX spends huge to optimize them.

Here's a breakdown🧵


1/ Spoiler alert: humans are visual animals.

Our eyes move 3-4x per second to process information and we can analyze an image in as little as 13 milliseconds.


2/ In 2014, Netflix consumer research showed that thumbnail artwork:

◻️ is "the biggest influencer...to watch content"
◻️ is the focus of 82% of browsing time

A user looks at one for only 1.8 seconds. If they can't find Netflix content in 90 seconds, they'll leave the app.


3/ Consequently, Netflix uses an elaborate thumbnail selection process for each of its 200m+ users.

The process is called aestethic visual analysis (AVA), which starts by pulling all the frames from a video.

For reference: a 1hr episode of "Stranger Things" has 86k frames.


4/ In a process known as "Frame Annotation", each frame is tagged with metadata identifying key variables:

◻️ Saliency
◻️ Frame #
◻️ Brightness / Contrast
◻️ Nudity probability
◻️ Face / skin tone
ALL , MARKETING INSIGHTS

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Vikrant
Vikrant
@Trading0secrets
Full chart learning course 🎓
In single thread 🧵

Process of trading through
price action ✨👇

1⃣Time frame - always start looking chart 📊 with higher time frame (weekly/monthly) then after go for lower one .

Positional trader - weekly/monthly

Swing trader - daily /3hours

Intraday trader - 15/30min

2⃣ demand /supply zone - then draw major/minor demand & supply zone .।।।

Ex : #SIS


3️⃣ Trading style -

⚡If you are positional trader then focus on major demand & supply zone.

⚡If you are swing trader then focus on minor demand & supply zone.

Wait for price to come on it then, 👇

4⃣find consolidation -

⚡Positional trader - consolidation should be above 1/2years.

⚡ swing trader - consolidation should be below 1/2 years

⚡Intraday trader - consolidation should above 5/10 days.

Ex - #galxo / #triveni / #vimta
ALL , PRICEACTION , FINANCE
Dave Nemetz
Dave Nemetz
@davenemetz
1/ A lot of people ask me how Bleacher Report found our first writers when we were tiny and had no funding.

So here's a thread on all the things we tried, what worked best, and lessons on growing a community from scratch:

2/ When we first started B/R, all the articles were written by my co-founders, our friends, and me.

This led to some hilariously bad takes. Like this article where I panned the SF Giants for drafting future World Series MVP Madison Bumgarner.

3/ When we were ready to start building our community, we started with word of mouth. We drafted an email pitching our concept. It went out to everyone we knew, asking them to share it with anyone who would be interested.

This got us maybe a few dozen signups.

From the email:


4/ With only a handful of members, we needed to make the community feel more active.

So we faked it til we made it.

Our team created multiple accounts and posted using different fake names. This created the sense of more activity and encouraged new members to join in.

5/ Later, I learned that the founders of Reddit did the same thing early on.

Sometimes the solution to the "chicken and the egg" problem of building community is to create the illusion of more chickens (or
CULTURE , FINANCE
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Orwell & Goode
Orwell & Goode
@OrwellNGoode
This year has been quite something.

But let's try to pick some of the most clownish stories this year had to offer.

Here's to 2020's end of year thread 1/50


Have you got a license for that opinion?

2/50


At least academics remain the same.

3/50


And Sweden didn't change

4/50


Don't have much to say about this one

5/50
FINANCE
Finalysis
Finalysis
@Finalysis20
Attended a clubhouse talk on:

"Common Investing mistakes" hosted by
Hena Mehta @hena1220 co-founder of Basis with
Aditi Kothari Vice Chairperson DSPMF &
Kalpen Parekh @KalpenParekh MD-CEO DSPMF
moderated by Dipika Jaikishan @dipikajaikishan

🧵 on key learnings:
@getbasis
@dspmf


A common investing mistake:

Taking out money when market falls!

Reason:

~ It's difficult to get in once you get out

~ If you manage to get in you will be late and lose the rise in the market.

Don't exit when market falls, neither stop the SIPs.

What's important for an investor?

Avoid being a bad investor; than worrying about being a good investor.

Basic mistake in investing:

Not knowing why we are investing!

We often invest because:

~ Others are doing it
~ We see the particular asset class is popular

But we don't understand the asset class

Wrong reasons for investing in asset class!

Gold : Because of family culture or as a symbol of inter-generational wealth.

FD: Because it's safe

Equity : To double money quickly!
FINANCE
Barsee
Barsee
@heyBarsee
This took me 6 years to learn, I'll teach you in 2 minutes.

23 sentences that'll make you more money than a $40,997 business degree:

1. Irresistible offer - Desirable outcome + proof + scarcity + urgency + guarantee + bonuses

2. Join the most expensive gym in your city. one connection will pay for it many times over - jk

3. If you keep waiting for the “right time” you will keep wasting all of your time.

4. Don't be cheap with: doctors, lawyers and tax advisors

5. Give yourself 3 days to do it and it'll take 3 days.

Give yourself 3 hours to do it and it'll take 3 hours.

6. Send a physical gift to customers and everyone who's worked with you for more than 3 months

7. Your customer's fear of loss is more powerful than their desire for gain.
ALL , FINANCE

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The YouTube algorithm that I helped build in 2011 still recommends the flat earth theory by the *hundreds of millions*. This investigation by @RawStory shows some of the real-life consequences of this badly designed AI.


This spring at SxSW, @SusanWojcicki promised "Wikipedia snippets" on debated videos. But they didn't put them on flat earth videos, and instead @YouTube is promoting merchandising such as "NASA lies - Never Trust a Snake". 2/


A few example of flat earth videos that were promoted by YouTube #today:
https://t.co/TumQiX2tlj 3/

https://t.co/uAORIJ5BYX 4/

https://t.co/yOGZ0pLfHG 5/
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On the occasion of youtube 20k and Twitter 70k members

A small tribute/gift to members

Screeners

technical screeners - intraday and positional both

before proceeding - i have helped you , can i ask you so that it can help someone else too

thank you

positional one

run - find #stock - draw chart - find levels

1- Stocks closing daily 2% up from 5 days
https://t.co/gTZrYY3Nht

2- Weekly breakout
https://t.co/1f4ahEolYB

3- Breakouts in short term
https://t.co/BI4h0CdgO2

4- Bullish from last 5

intraday screeners

5- 15 minute Stock Breakouts
https://t.co/9eAo82iuNv

6- Intraday Buying seen in the past 15 minutes
https://t.co/XqAJKhLB5G

7- Stocks trading near day's high on 5 min chart with volume BO intraday
https://t.co/flHmm6QXmo

Thank you
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A thing which I unironically and enthusiastically believe which is unpopular among smart people of my acquaintance: financial engineering has in the recent past and present contributed substantially to human welfare. We should hope to see more of it.

Maybe more geeks need to meet someone who says “My job is teleporting value across time and space.”

Financial engineering is sort of a squishy term. I don’t primarily mean payments infrastructure or financial rails, although both of those involve substantial engineering.

I mean more “We took a thing and performed some alchemy, and now have a new thing.”

Except instead of alchemy it is generally quite a bit of math, a huge amount of contract law and due diligence, often an impressive amount of ops work, and a dusting of technology that web devs would recognize as such.
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IMPORTANCE AND CHARACTERISTICS OF GARUDA PURAN.

On the request of Garud, Bhagwan Vishnu, the rider of Garud, described this Puran based in Taksharya Kalp. It has ninteen thousand shlokas.
This book begins with a question and goes on to describe the Shrishti.


Then it describes the Surya puja vidhi, Diksha, Shradha, Nav vyuh puja, Vishnu sahastra naam kirtan and dhyan, Yog, Mrityunjay puja,Mala mantra, Shivarcha, Gopal puja, Trailikya mohan Shridhar puja, Vishnuarcha, Devpuja, Sandhya, Pancham tattva, Durga and Chakra Archana,

Maheshwar puja, Pavitra ropan puja, Murti dhyan, Vaastu maan, Prasaad, Sarvdev pratishtha, Ashtaang Yog, Daan dharm, Prayaschit, Narak description, Chakravyuh, Jyotish, Samudra shastra, Swar gyan, Tirth, Importance of Gaya, Different Manvantars, Pittra's, Varna dharma,

Dravya shudhhi, Samarpan, Vinayak puja, Grah yagya, Ashram, Shouch, Pret shudhi, Niti Shashtra, Vrat katha, Som and Surya vansh, Hari vansh, Bharat akhyan, Ayurveda, Medicine in Ayurveda, Rog nashak kavach, Garud Kavach, Traipur mantra, Prashna, difficulties in vyakaran,

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Black movie goers know which movies are for us and which films aren’t. We really don’t like our stories being made into films that center (and humanize) people that hate us. The filmmakers/studio know that by naming the film “The Green Book”, black movie goers...

...are going to be expecting a story about black people trying to safely navigate the country (real history) and instead will get a white savior film. Like folks went to see Detroit thinking it was about the riots...

Anywhoo, I know Mahershela is fantastic in it. He was the best thing about the trailer. As rich as the history behind the creation of ‘The Green Book’ is/was, as amazing as Dr. Don Shirley’s story is, WHY is this film about a random, racist driver and his family?

This feeds into the ignorant anti-Black American stereotype of “Black Americans don’t have any culture/history/mythology” or whatever. That our stories are still both being used while simultaneously erased in 2018 is wild to me. It’s gonna clean up come award season. 🤦🏾‍♀️

And now, if black filmmakers WANTED to make a film about The Greenbook, guess what it can’t be called🙃. Just like if someone wanted to make a film about the actual Detroit riots, guess what it can’t be called? Then those filmmakers would run into...
CULTURE