Wealth Building Strategies

Artificial Intelligence Confounds Its Creators

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Posted by Jon Markman's Pivotal Point

on Saturday, 29 April 2017 07:32

Advanced artificial intelligence is far from that. Algorithms are constantly learning, often in unusual ways, and at an exponential rate. It’s one of the cornerstones of the New Gilded Age.

Unfortunately, nobody really knows how they learn. And that should scare you, a lot.

When Siri doesn’t know the answer to a question, she demurs. She may quip or make a snarky comment to obfuscate, then send you to Wikipedia.

“Hey Siri, what is the meaning of life?” Siri: “It’s nothing Nietzsche couldn’t teach you.” Cute.

When Google (GOOGL) wanted to improve the way its machine-learning software translates languages, it started by feeding it massive amounts of data.

In short order, the software had common translations. Soon, accuracy rates improved. Later, the software began translating between languages it had not even studied.

Initially, engineers were perplexed. They later concluded the AI had devised a brand-new language, or “interlingua”, to make sense of language pairs. Once it had the cipher, the rest was a snap.

Screen Shot 2017-04-29 at 7.03.52 AM

When Nvidia (NVDA) decided to enter the self-driving car race, it started with neural networks watching humans drive, sometimes badly. Soon, the AI could steer, brake and accelerate just like a person.

Later, using a batch of sensors and a learning, trunk-mounted brain, the AI could drive well enough to navigate winding dirt roads, driving rain and thick fog.

Engineers admit, the system is so complicated even they don’t really know how the software is arriving at all of its decisions, MIT Technology Review reports.

This is the part where most people start worrying about Hollywood-style Terminators.

I will admit, the idea of machines making their own choices based on processes that even their creators don’t understand is unsettling, at best. And plenty of smart people like Stephen Hawking, Bill Gates and Elon Musk have sounded alarms about unintended consequences.

In a world where machines learn, why wouldn’t they develop emotions and all of the other frailties that cause us silly humans to act irrationally? It could get seriously weird, and dangerous.

That does not mean there will not be terrific investment opportunities.

AI is a game-changing technology. It is already having a positive impact on the bottom line for businesses ranging from financial services to transportation. Ultimately, it will change business models. New services will be born.

I will continue to recommend companies like Alphabet (GOOGL) and Amazon (AMZN), that are poised to take advantage of this important trend.

That’s the thing about the New Gilded Age. So many technologies are progressing exponentially, this truly is the age of invention. Almost anything is possible. Even the scary stuff.

And by the way, Nietzsche was wrong about the meaning of life. It is not without meaning, value or compressible truth. At least that is what I want the machines to think, if they’re listening.

Best wishes,

Jon Markman


Wealth Building Strategies

Brighter Outlook for Commodities Suggests a Fresh Look at Investment Benefits and Risks

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Posted by Pimco - Canadian Perspectives

on Tuesday, 25 April 2017 07:56

Screen Shot 2017-04-25 at 7.28.19 AM

Returns in the commodities markets have improved over the past year amid stronger macroeconomic activity and supply-side tightening, and our outlook for the next 12 months has brightened.

While considerable uncertainties remain for all commodity sectors, we believe the worst market trends may be behind us. As we look ahead to the next 12 months, commodities will likely reclaim a diversifying role in portfolios, given growing inflation risks and shrinking correlations between commodities and other assets.

At this point in the business cycle, we think investors should consider positioning commodities allocations to at least match benchmark targets, if not modestly exceed them.

...continue reading this analysis & don't miss the Investment and portfolio allocation outlook

Wealth Building Strategies

What Is Asset Allocation For Everybody Else?

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Posted by Richard Shaw via Safehaven

on Thursday, 20 April 2017 06:28

44204 a

44204 b

....also from Safehaven: Fantasyland Reality Check: Fed's Beige Book Makes Absurd Claims in at Least 3 Places

Wealth Building Strategies

Get Ready for Inflation! Lumber Logs a 12-Year High

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Posted by Frank Holmes - US Global Investors

on Tuesday, 18 April 2017 07:45


As if you need more proof that inflation is finally starting to pick up, lumber prices rose to a 12-year high last week, supported mainly by expectations that steep duties will soon be levied on cheap softwood imports from Canada. Lumber futures rose to nearly $415 per thousand board feet last Monday, a level unseen since March 2005, soon after homeownership peaked here in the U.S.

lumber logs a 12 year high
click to enlarge

At issue is a mini-trade war between U.S. and Canadian loggers. For some time now, the American lumber industry has blamed its Canadian counterpart of unfairly dumping lumber in the U.S. that’s far below market value. Now, several factors are pushing timber prices higher. Chief among them are the likelihood of duties being raised at the Canadian border, possibly as early as next month; President Donald Trump’s calls to renegotiate NAFTA; and growing demand for new homes following the housing crisis as consumer optimism improves and millennial buyers finally seem eager to enter the market.

Shares of Canfor Corporation and Western Forest Products, Canada’s number two and number five lumber producers by annual output, have had a good three months, advancing 25.5 percent and 16.8 percent respectively as of April 12. Timberland-owner Weyerhaeuser has also impressed lately.


Wealth Building Strategies

Why Davos Predictions Are Always Wrong!

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Posted by Martin Armstrong - Armstrong Economics

on Wednesday, 12 April 2017 07:21

Davos-600x259QUESTION: Mr. Armstrong; I read the quote that Kenneth Rogoff made about the predictions of the attendees at Davos. He told Bloomberg: “A joke, which I have been telling since the last meeting in Davos, culminates in the fact that the predictions made in Davos are always wrong… No matter how unlikely, the most likely event is the one that is the opposite of the Davos consensus.”

I was talking to a friend who is rather high ranked in a European bank and he said when they really want a forecast they call you. Why do you not speak at Davos? Everyone knows you. So why are you not taking a more prominent role?

Thanks for what you do share with us on the outside.


ANSWER: The Davos meeting is way too public to be important. It’s just a convention for food, drink, and parties. It is not serious. However, the media thinks it is like the Bilderberg meetings. I know people who attend both. They no more can decide the fate of the world than they can predict the weather for their flights home. The majority MUSTalways be wrong. That is how all economies and markets move. Look at the Dow. This is historically the most bearish rally in all of its history. The majority have been addicted to predicting every new high is its last. People keep trying to short it and they get stopped out always buying new highs. The shorts keep feeding the rally – not fresh longs. That is why the majority of people are NOT in this market.

The majority must ALWAYS BE WRONG and that goes for both Davos and Bilderberg meetings. For years, being perhaps the largest institutional adviser covering the world, my clients NEVER wanted to see our forecasts on the front page of the WSJ when they were paying for that info. The people who spout out their forecasts to everyone who will listen are trolling for business. If you have the business, you do not need to troll.

There is never any point in appearing publicly at Davos or the Bilderberg meetings to hand out advise for free when they will not listen anyhow until there is a crisis. So you cannot stop or alter the trend for no politician will change course until compelled to do so. Hence, it would be just a waste of time. When such time comes I would consider speaking at either in the midst of a crisis for that will be the only time they would listen. I have always regarded myself as a crisis manager because nobody will listen to prevent a crisis. They always hate to let go of power.

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