Author Archives: Jason

About Jason

Jason R. Koepke is Founder and Data Strategist at GNT LLC, a risk-analysis and data strategy firm that provides analytical and technical services to the public and private sectors. His work and research has been featured in the academic, financial, and technical industries.

Friends with Books: Yiannis, Elliott, and David and the State

A few friends came out with excellent books during the past two years, and it is worth their mention. A lot of friends do garbage work, so the mere mention of these books is meaningful. This is part two of some.

Yiannis G. Mostrous, Elliott H. Gue, and David F. Dittman‘s The Rise of the State
Yiannis and team argue that the state will continue to increase its role in the economic sphere, making it an important (and valuable) consideration for financial decisions. The two most obvious examples of the state’s more pronounced relationship with markets are (1) TARP-like bailouts that occurred in the US and is ongoing in Europe to stop contagion and (2) sovereign wealth funds. The list goes on, of course, and most of The Rise of the State is dedicated to infrastructure, energy, and what might poorly be referred to as development plays that are a consequence of the state’s pro-active role in investment.

The ground that The Rise of the State covers makes it a nice complement to the group’s newsletters, including The Energy Strategist, Global Investment Strategist, and the always fun Cocktail Stocks, as well as Yiannis and Elliott’s first book, The Silk Road to Riches (co-written with Ivan Martchev). With the exception of David’s work, which tends to focus on Canada or general market and legal issues, the team’s efforts often concentrate on this infrastructure-energy-development triangle, with frequent spotlights shown on consumer goods.

Unlike the newsletters, though, The Rise of the State fills in the triangle’s outlines with an explicit thesis regarding the state that is long overdue: that, recently, the state has been under-recognized as a significant market player and understanding the state’s behavior and motives can lead to excellent returns. Also, the book takes a longer-term view–years, not weeks and months–of the market and the book’s recommendations, making it a complement to the newsletters. Ultimately, the book serves to reassure readers who are nervous regarding the US financial situation that crashes and state meltdowns have occurred before that other states take their place, move forward, and make money for those who have invested wisely.

The idea behind the book and the investment strategy and recommendations the authors make–both of which I have tracked for years–are excellent. In fact, I recommend the book–and the newsletters–to anyone interested in guided investment decisions, as well as those investors particularly concerned with about the United States and keen on the rise of the East. Keep in mind, though, that the book’s time horizon on investments is longer than most newsletter subscribers are accustomed and it is not just a list of tickers for you to buy (although there are many recommended stocks in each chapter).

My issue with the book is its dual character: part thesis on the evolution of markets and finance and part exploration of stocks and which ones investors should consider buying. Ideally, this book actually would be two paired together, allowing the authors to fully explore each dimension and allowing the reader to digest the material within the relevant scope. As it is, the book begins as a polemic about the rise of the state (Chapters One through Four) and then switches to a more modular series of chapters on specific and varying topics (e.g., oil, water, coal, demographic changes and their consequences). Each chapter starts by carrying through the thesis but switches to relevant financial plays. True, this organization is effective and efficient, but it may leave readers wanting more–more of the argument, more information, more data, and more stock recommendations.

In the end, criticizing the book for leaving the reader so hungry at the end is high praise. After all Yiannis and crew has made us salivate and provided a few excellent dishes. Perhaps a third book will satisfy that remaining hunger; in the mean time, it is up to the reader to make good use of what s/he has been provided.

Album Reviews

1——>3—–>5
Terrible—–>Fantastic

5
Brendel, Alfred – Beethoven’s 32 Piano Sonatas
Heartbreak and Munchi – Munbreakton EP
Stravinsky, Igor – Rite of Spring, The, The Nightingale

4
Gardiner, Eliot – Bach Mass in Bm
Glass, Philip – Orange Mountain Music Philip Glass Sampler, The, Volume 01

3
Wizard, The – various mixes from 1986-1989
Black Science – Cosmodemonic and Beyond

Beating a Dead Horse: NYT Article on Collecting Phone Data to Track Public Services is a Press Release

A June 6, 2011, article by Joshua Brustein in The New York Times read as a press release for the private corporations wanting to use cell phone data to monitor and track public services. The article outlines companies that want to collect and data mine behavioral information from cell phones that have those companies’ apps. For example, you have the FPrivacy app by LastLaugh, Inc., and LastLaugh collects your cell phone location and activity, and then uses that data to monitor travel times between different points (e.g., traffic reports, determining when a given subway train will reach its destination). While the idea is interesting, the article essentially regurgitates company press releases and fails to look critically at the idea in at least three simple areas: the role of the public sector, alternative ideas, and privacy. In the eyes of the Facebook generation, an even graver mistake is that it is old news!

Missing Item 1: Where is Local Government?
The article did not even tease the reader with the notion that the local government, through the various agencies that manage public transportation, ought to be providing services that increase our understanding of public transportation, including when to expect the next train. The combination of the right’s dismissal of government having a legitimate place in our lives and the left’s inability to firmly push government agencies to smartly and quickly adopt useful technologies means that we do not think of the government as being an appropriate actor for these types of initiatives.

Missing Item 2: Alternative Ideas
Somewhat related to Missing Item 1 is the fact that the article fails to suggest alternative ideas, whether those ideas are real or on e-ink. Furthermore, we have an incredibly inelegant solution (for these types of problems) in the use of tens of thousands of cell phones as data collectors. For example, there is a significant imputation problem in that for many commutes, “the system” has to make a(n educated) guess about which train or mode of transportation the phone took. Even the article mentions this:

If a phone located near Times Square suddenly loses service and reconnects at Prince Street and Broadway 15 minutes later, then it has almost certainly traveled there using the N or R trains.

A specific cut at this imputation issue is the fact that the approach aggregates very general/inexact data when what is desired is very precise data. This is because what matters is not the activity of an individual psuedo-anonymous cell phone, but the activity of an individual known public transportation vehicle. As a result, the data demands a host of assumptions that fight against the wall of ecological fallacies and other methodological issues.

An alternative idea is to simply equip public transportation vehicles with tracking equipment. At that point, the most precise data possible is collected and aggregating up to more general levels becomes easier. Furthermore, there are no privacy concerns. Even better, many public transportation systems already have this capability!

Missing Item 3: Privacy
Okay, privacy is mentioned, but only in the final sentence of the article:

This could be a challenge, as it is clear that many people are uncomfortable with technology companies or government agencies tracking their every move.

Perhaps I should be thankful, since Brustein finally brings the public sector into the discussion. Instead, though, I ask myself, “That’s it?” The article talks about (admittedly, opt-in) methods for tracking every location and travel route a person’s cell phone takes, as well as every conversation one has*, but the only love privacy is shown is a single sentence that reads as if it was written by a junior-high student.

* One company wants to use phones’ microphones to identify locational atmospherics, a method that is smeared with a smile by phrasing it as a way to determine whether you are on a bus.