Quote for the day

You can resist an invading army; you cannot resist an idea whose time has come.

– Victor Hugo

Linked Data

Source:Linked Data

Petabytes of data is generated every hour on the planet. There are many different methods to analyze this data. One better way is to break the silos and link the data across the silos/channels/enterprises/countries. Many diamonds can be dug from this data mine. It is just a matter of time and this might be next big thing.

Here comes behavioural targeting

Google will monitor the web pages that individuals visit and the videos they watch on Youtube, which it owns, to compile a profile of each internet user. It will then use the information to serve up ads to viewers based on their interests. For example, someone with a history of browsing a lot of car websites would be sent car ads.

More here.

The Gaussian Copula and VAR

Risk management is very important for any firm, especially in the financial sector. Risk and return are inherently related to each other, there is a tradeoff associated with them. There certainly are times where more risk means more return and there are also times where more risk means no return. Many individuals and firms have come up with various models/formula to assess this risk-return phenomena.

The most successful formula of them all has been the VAR – Value at Risk. Almost all the firms use it today and have used it for the last couple of decades to understand not only a portfolio’s risk but the overall firm’s risk. But there is one serious detractor to VAR and that is Nassim Taleb. He says “VAR is like an airbag that works all the time except when you have a car accident”. Here is a good article from NYTimes on the heavy reliance of the Wall Street on VAR and how it affected their Bottomline.

Another formula that Wall Street fell in love was what is called “The Gaussian Coupla” devised by David Li. You can read more here about how this formula was used and how it destroyed many firms on the street.

I think the lesson learnt from these stories is to avoid heavy reliance on one single metric/formula/model to run a business. The reason being none of them would be able to account for the Black Swan. And it is also true that the metrics created with the Black Swan scenarios in perspective wouldnt take into consideration the regular scenarios. There is no hard and fast rule here. Use the metrics/formulas/models with caution, understand the limitations that come with them, understand the upside and the downside, and hey use your gut feel and intuition!

Interact 09 Conference

Fair Issac is hosting a decision management conference Interact 09 in New York City from March 10-13, 2009.

Some interesting topics are being covered which are very relevant to the turbulent economic times that we are living in:

Managing Risk in Credit Crunch
How to learn from Bad Debt
How Lending has changed

If you are interested, go here to register and use the promo code FMH00 to get $350 off the price of attendance. Thanks to Chris from Fleishman.

The future according to Microsoft

A scifi-isc video about Microsoft’s vision about the future presented by Stephen Elop at the Wharton Business Technology Conference.

Future Vision Montage

Chris, Seth and Nassim

A fascinating picture from Chris.

Data sets from Amazon

Amazon announced four new data sets available to the public yesterday. You can find more on this here at the Amazon Web Services Blog.

It would be interesting to know the findings/insights from the developers who would work with these data sets.

Beautiful Storytelling

Ikea has designed a beautiful story to market its new product:

Find the link here.

Cloud Computing – Berkeley’s View

Here is a recent paper from UC Berkeley which outlines the Top 10 obstacles to cloud computing:

Availability of Service
Data Lockin
Data Confidentiality and Auditability
Data transfer bottlenecks
Performance Unpredictability
Scalable Storage
Bugs in Large Distributed Systems
Scaling Quickly
Reputation Fate Sharing
Software Licensing