Adam Adamou Digits in Motion

A Secret Weapon: Use Fiverr To Get Things Done!

I have a secret to share with you. What if I told you that there’s a place that you can go to - where you can get things done… all sorts of things from programming macros in excel, to developing business plans and web sites, to having cartoons or logos drawn to your specifications to having songs composed to your lyrics… all for five bucks?

That’s what you’ll find at fiverr.com - a website that provides an exchange between people that are willing to do things for five bucks and people who want things done for five bucks. I’ve used it several times now and the value for the money is incredible.

If you have a special project that needs to get done and you need some help - post a request and see if somebody will take care of it for you (for $5!). It’s actually quite a bit of fun to just gaze through the list of jobs and hire people to do things for you on special occasions or whatever. It’s your mom’s birthday… why not write a song and have somebody compose it and play it for her for $5? Need to have some research done on a project that you’re running late on - hire somebody to put it together for $5. 

Take a look. It’s worth it.

bioshock infinite | artistic or portentous?

Follow-Up: Lotto 6/49 Review and Outcome

The lottery has come and gone and we are poorer for it. In the post below I discussed how I intended to play the odds in the record $55,000,000 6/49 draw and concluded that a strategy of playing the SAME numbers on two tickets would result in an expected profit of $1 per $4 ticket (see the post just prior to this one for the methodology).

Here’s how the numbers worked out. My son Evan used a spreadsheet to generate six random numbers from 1-49. My son William picked six random numbers as well. We bought two tickets with Evan’s numbers (at a cost of $2 per ticket, or $4) and two tickets with William’s numbers (again at a cost of $4). Our “expected value” or profit from this investment based on our assumptions was $2 - or a profit of 25% on our $8 investment. Not big, but not bad.

One of the key challenges with the lottery however is that the payout is difficult to determine without making an assumption as to how many other winners there will be (since the pool is shared between all of the winners). We assumed that there would be one other winner (beside ourselves) and so we used a strategy of buying two tickets with the same numbers so that we would be guaranteed to win two-thirds of the pot. This increases the expected payout and generates a positive expected value on or investment. If there were two or more winners (excluding ourselves) then the expected value of our ticket would be negative. We also assumed that the size of the payout would be approximately $55 million, the number that was widely advertised by the lottery commission.

Our assumptions proved to be faulty. The size of the draw was greater than we expected (it was $63.4 million - a plus for us) but there were four winners in total - a negative. Adjusting our model for these assumptions, the expected value of our tickets based on the strategy that we used was $3.00 per $4.00 ticket set (we played the same numbers twice to increase our share of the pot). We were making an $8.00 investment in which the expected payout was only $6.00 - a bad deal.

The actual outcome was a loss of $8.00 vs. the expected loss of $2.00 - a truly unlucky outcome. However, money well spent for the conversation and dialog that it spurred in our family, the time spent in front of the computer teaching the kids how to used a spreadsheet and basic statistics, and the stimulation that comes from being a numbers geek.

Enjoy the rest of your week.

How To Play The Odds In Today’s $55,000,000 Record 6/49 Draw:

I don’t buy lottery tickets for the simple reason that in most cases the house (in this case the government) offers terrible odds by keeping too much of the pie for its own greedy little ends. It’s often referred to as a “tax on stupidity” by preying on wish-fulfillment fantasies or on people that are in dire need of cash.

This weekend however, odds are that I’ll buy two tickets.

Here’s how the numbers break down (and thanks to the secret statistician that helped me with the numbers):

There are 49 possible numbers, and you must pick a set of 6 numbers from those 49 that exactly match what the lottery randomly selects to win the jackpot.

To get a unique sequence of 6 numbers you have 49 choices for the 1st, 48 choices for the second, etc. Therefore there are 49x48x47x46x45x44 unique sequences, or 10,068,347,520 (that’s about 10 billion) unique sequences of 6 numbers out of 49.

The lottery however is not based on unique sequences, otherwise you would not only be picking the numbers but the order they came out of the Ryo-Catteau Tulipe ball machine that the lottery uses to randomly select the numbers. Put another way, there is no difference between the set (5, 10, 15, 20, 25, 30) and the set (30, 25, 20, 15, 10, 5).

How many unique sequences, or permutations are there in a set? There are 6 possibilities for the 1st number in any set, 5 possibilities for the 2nd, and so on. Therefore there are 6x5x4x3x2x1 sequences in each set, or 720 sequences per set.

If we divide the 10,068,347,520 total unique sequences by the 720 unique sequences for each set we get the odds of 1 in 13,983,816 (that’s about 14 million). Those odds are approximately the same as flipping a fair coin and having it come out heads 24 times in a row (2^24 = 16,777,216).

We can use these numbers to calculate the “expected value” of each ticket by taking the estimated size of the jackpot (about $55 million) and dividing it by the odds (about 14 million). This results in an expected value of $3.93 per combination set. The price of a ticket is $2.00 - so the odds are in your “favour” because you are paying only $2.00 for a ticket combination that is statistically worth almost $4.00.

But there’s a catch. If there is more than one winner, the prize is shared by all of the holders of that particular combination set. If there are two winners for example, each person will receive half of the pot, or about $27.5 million. The expected value per combination set in this scenario is now only $1.96 per ticket. This is less than the $2.00 price of a ticket, and so the expected value of your ticket is less than the price:  a losing proposition.

One way around this is to buy multiple tickets WITH THE SAME NUMBER COMBINATION. In this way, if there is one other winner, you will hold two winning tickets to her one, and thereby receive two thirds or 67% of the pot. 67% of $55 million works out to about $37 million. This works out to an expected value of $2.63 per combination set and $5.26 for the two ticket set vs. a price of only $4.00 for the combo.

Bang, the odds are in your favour, and statistically speaking, this is a better wager than buying two tickets with different combinations.

So that’s what I’m going to do. Wish me luck :-)

Estimize: Q1 2013 Estimize Community Stats and Winners

The Iron Lady: The Greatest Leader of the 20th Century?

Margaret Thatcher was a transformation leader. The Baroness rescued Great Britain from socialism, helped to defeat the Soviet Union in the Cold War without firing a shot and stood up against tyranny around the world. I would concede that the point is debatable, but she may well be the greatest leader of the 20th century. 

Thatcher was also imminently quotable. Here are some of my favorites:

“I am extraordinarily patient, provided I get my own way in the end”

“The problem with socialism is that you eventually run out of other people’s money.” 

“There can be no liberty unless there is economic liberty.”

“No one would remember the Good Samaritan if he’d only had good intentions; he had money as well.”

“If you just set out to be liked, you would be prepared to compromise on anything at any time, and you would achieve nothing.”

 “If my critics saw me walking over the Thames they would say it was because I couldn’t swim.”

And perhaps my favorite:

‘To those waiting with bated breath for that favourite media catchphrase, the U-turn, I have only one thing to say. You turn if you want to. The lady’s not for turning.’

Microsoft to Facebook: We invented the "people first" phone in 2011! $MSFT $FB

Facebook Home? Prepare for Google Now +, eBay Together, Twitter Land and a wave of others. $FB $GOOG

Many of you may have heard or watched Facebook’s announcement yesterday of the launch of Facebook Home - an Android overlay that will make Facebook the center of your smartphone universe (see here for a funny but unfortunately all too true article).

Facebook phone is basically an app (or perhaps “skin” is a better word) for your android phone that takes over your home screen to display status updates. It integrates chat functions through Facebook messenger (they call them “Chat Heads”!) as well as SMS and MMS functions. It effectively pushes your other apps into the background (though they are still accessible) in favor of having a Facebook front-end on your phone. 

It’s not a bad idea - though it’s hardly earth shattering - but it may gain some traction with a certain audience and it will be interesting to see just who that audience will be. The hardware will need to be powerful enough to be able to run Facebook Home plus all of your other apps in the background - many casual users with phones more than one or two years old will likely not be able to run the app. Battery life will likely be compromised - and people with larger screen phones that already suck the juice out of the battery may also choose to uninstall the app if it doesn’t offer enough of the benefits to justify the battery suckage. In my household - we have a mix of Android, iPhone and BlackBerry phones. Clearly the non-Android users are not going to be able to use Facebook Home (at least for now) while on the Android side, we have a Galaxy Nexus that is 24 months old and unable to run Facebook’s program, and a GS3 that can - but my teenage son recently lost the phone and we haven’t bothered to replace it. If he’s the target market (and it may be) - it’s not a good sign.

Here’s another problem. Facebook Home is a good idea - I’ll grant them that. What’s to stop Google from expanding their Google Now system to be more like Facebook Home? That would certainly fracture the market, particularly if Google incorporated this (let’s call it Google Now +) into the next soon-to-be-released version of Android (dubbed Key Lime Pie). I take this prospect as a given. But let’s take it another step. Why not release an eBay version and call it eBay Together to make your eBay market the center of your phone universe? Twitter can develop a skin-type app to convert your phone into a Twitter phone with Twitter Land! On and on it goes because Facebook has no proprietary advantage here - even with it’s one billion user base - that other’s can’t copy to fracture the market.

Agree, disagree… what do you think?

What the Hell? #Brony #MyLittlePony

Gold Price Depression or Gold All Time Highs? Pick the Latter. $GLD $XGD.ca $VIX

Many investors are concerned as the price of gold and gold stocks continues to decline to multi-year lows in absolute terms. The $GLD ETF gold fund on the NYSE is presently trading in the $152 range, a level last seen in 2011. This appears to fly in the face of world events, European financial problems, untenable high US debt and high unemployment levels and on-going geopolitical problems in Asia and the Middle-East. Is gold a dead asset class? Is the bubble now bursting?

Not in my opinion.

Gold is an asset that provides among other benefits a hedge against currency declines, particularly declines in the USD, it provides a hedge against future inflation and it provides a hedge against “risk” as marked by market volatility. Equity market volatility, as measured by the $VIX volatility index is currently at all time lows. This means that equity market participants are very confident in the future to the extent that they are not willing to pay very much for insurance against future market declines. Gold is a hedge against risk - and when the market believes that there is little risk in the future, the absolute price of gold should and will decline. However the absolute price of gold is one part of the equation - the other part of the equation is the relative price of gold vis-a-vis the implied risk in the market. In other words - what is the “risk adjusted” price of gold relative to market volatility?

If the price of gold is declining by more than the implied risk in the markets, then we can safely say that gold’s decline is “real” and that there is a momentum shift away from gold as a standard of value. If the inverse is true, then we can say that gold, on a risk adjusted basis, is more expensive today. So what do the charts tell us?

The dark line above represents the absolute price of gold as measured by $GLD and the dark line below the chart displays the price of risk as measured by $VIX. The middle chart displays the relative price of $GLD relative to $VIX, or $GLD/$VIX. I consider this to be a proxy for the “risk adjusted price of gold - or how much gold can I buy per unit of market risk.

We can see that gold has remained relatively stable against a dramatic decline in the price of risk. This three year chart in the middle shows us that on a risk-adjusted basis the price of gold relative to the price of risk has maintained a steady upward trajectory and continues to trade at all-time highs. The 200 day moving average (in red) (roughly equivalent to a one trading year period) is at an all time high, as is the 72 day moving average (in blue) (roughly equivalent to a three trading month period) and the 20 day moving average (in green) (roughly equivalent to a one trading month period).

While some investors moan about the decline of gold, gold is in effect hitting all time highs relative to the risk priced in to the market. This is an important indicator and one that I will continue to keep my eye on in future months.

PS - this is my opinion. See disclaimer here: http://adamadamou.tumblr.com/post/45912312034/disclaimer.