Newsletter 6

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Thanks everyone who sent me links and recommendations this week. If you stumble across something interesting, send it my way! You can send any recommendations to links@houstonp.com.

Books

Pitch Perfect by Bill McGowan - I love public speaking, but it can be nerve wracking. McGowan lays out helpful tips to hone your craft. He strays away from his main message throughout the book and tried touching on other areas of life and business. I wasn't a fan of that. I would read a summary if you're wanting to know what he recommends. It's not worth spending the time to read the entire book.

The Ride of a Lifetime by Robert Iger - This book needs to go on your reading list. Eiger has led Disney to be a modern juggernaut in the entertainment industry. He has a winding path to CEO and had large shoes to fill after Eisner. Valuable insights are dropped everywhere along the compelling retelling of his career and major acquisitions. Read it.

Podcasts

Some extraordinary episodes from this week:

Starting Greatness Podcast - There's only five episodes so far, but the premise and content have been great.

Ben Horowitz Discusses Culture and Success - Masters in Business - I'm itching to read Ben's newest book.

Rock the Voter - Your Undivided Attention - A talk with Brittany Kaiser about Cambridge Analytica and elections. There are a lot of similar talking points to the Netflix documentary she is in.

Vaughn Tan – Quality and Innovation – Invest Like the Best

Software in Context with Zach Tellman- Corecursive

Beth Long: Maintainable Code Prioritizes How Humans Interact With It. - Maintainable

Slot Flaw Scofflaws - Planet Money

All Founders Have a Trojan Horse - Masters of Scale

Selfish Ideas - Akimbo

Argentina Entrepreneurship, Endeavor, and Global Lessons with Wences Casares and Reid Hoffman - Greymatter

Venture Capital and Control with Dave Teare - Rework

Using machine learning to predict drug approvals - Linear Digressions

Facial recognition, society, and the law - Linear Digressions

Videos

The Classic Tetris World Championships Explained - I confess; I'm obsessed with Tetris, and I spend an embarrassing amount of time watching CTWC videos.

USENIX Security ‘18-Q: Why Do Keynote Speakers Keep Suggesting That Improving Security Is Possible? - This talk focuses on security, but the message generalizes to many other functions in business.

Customer Showcase: Perform Real-time ETL from IoT Devices into your Data Lake with Amazon Kinesis - I misplaced this video from the other week. Once you get past the AWS sales pitch, this video demonstrates what actual “Big Data” is and how difficult it is to handle. The volume and velocity is orders of magnitude more than the current state of the financial services industry.

Articles

Don’t Learn to Code — Learn to Automate - I want this to be a more common opinion in actuarial. People don't realize how much of their job can (and should) be automated, or perhaps they do but can't accept it.

Bloomberg Beta Investment Documents - I haven't gotten through this, but it's pretty awesome to see something like this open source online.

The Lesson to Unlearn - I completely agree with Paul on this. Learning and getting good grades are very different.

The Product-Minded Software Engineer - Actuaries can fall into a trap of focusing on the process and not the end customer. There are a lot of helpful tips in this article to keep in mind.

Insurance industry influencer Rob Galbraith on who will be future winners of insurtech - I see this across the insurance and financial services industry:

“There’s a lot of desire to put out press releases, offer awards and talk about things that are really innovative — but if you peel back the layers, oftentimes there’s not a whole lot of substance there.”

He pivots at the end of the article:

A key strategy that could define the successful insurtechs of the future, according to Galbraith, is the ability to cultivate “blue ocean territory” — the term given to a no or low-competition area of the market – and pivot the use of technology to capture existing insurance markets with more opportunity for profit.

This is classic Christensen Disruption Theory. This is the only path for an insurance startup to be successful, and the main point I agree with him on. I don't envision it happening any time soon – not nearly on the timeline others would like you to think.

Artificial Intelligence: The Gap between Promise and Practice - I wonder if expectations will be met for AI. In its current state the hype far exceeds the returns in most industries, especially in financial services. Long term is more uncertain to me; the technology may eventually catch up to the hype some day.

The pattern is typical for an emerging technology: Expectations run ahead of reality, and only later align as initial expectations are met, exceeded or disappointed.

This Is Why A.I. Has Yet to Reshape Most Businesses - This article is a worthwhile reality check to the amount of investment and skill needed to drive machine learning in the enterprise. You should take the time to read the entire article, but some notable quotes:

This doesn’t necessarily mean that A.I. is overhyped. It’s just that when it comes to reshaping how business gets done, pattern-recognition algorithms are a small part of what matters. Far more important are organizational elements that ripple from the IT department all the way to the front lines of a business. Pretty much everyone has to be attuned to how A.I. works and where its blind spots are, especially the people who will be expected to trust its judgments. All this requires not just money but also patience, meticulousness, and other quintessentially human skills that too often are in short supply.

Last September, a data scientist named Peter Skomoroch tweeted: “As a rule of thumb, you can expect the transition of your enterprise company to machine learning will be about 100x harder than your transition to mobile.” It had the ring of a joke, but Skomoroch wasn’t kidding. Several people told him they were relieved to hear that their companies weren’t alone in their struggles. “I think there’s a lot of pain out there — inflated expectations,” says Skomoroch, who is CEO of SkipFlag, a business that says it can turn a company’s internal communications into a knowledge base for employees. “A.I. and machine learning are seen as magic fairy dust.”

When Genpact, an IT services company, helps businesses launch what they consider A.I. projects, “10% of the work is AI,” says Sanjay Srivastava, the chief digital officer. “Ninety percent of the work is actually data extraction, cleansing, normalizing, wrangling.”

AI and Economic Productivity: Expect Evolution, Not Revolution - AI will have its benefits in the future, but the hype makes it out to be something it's not.

What’s Behind Technological Hype? - Wow. You should take the time to read this – many valuable insights.

Start-up losses are mounting and innovation is slowing. We need less hype and more level-headed economic analysis.

Actuary of the Future – November 2019 - I only read the python mortality article. I'm very hesitant to apply machine learning algorithms like this. It requires significantly more data than most actuaries think. The lack of code in an article about code is disappointing; the lack of clarity or explanation of just about every graph and algorithm is equally frustrating. I would have liked less charts and name drops of algorithms and a more thorough and compelling use case.

October 2019 SOA Board of Directors Meeting -

The SOA Board reviewed and approved the 2020 budget and five percent membership dues increase.

I'd like a board member to extrapolate on why the SOA needs to raise dues. I'd find it more acceptable if they were using extra cash to reduce initial exam fees, but I've never been satisfied about how the SOA uses their budget.

Emails from R: Blastula 0.3 - RStudio continues to impress me with the development they're doing.

Hash - Seems like this could be super interesting.

A new way to make quadratic equations easy - The quadratic equation is taught to just about every high school student. Who would have thought there could be a discovery like this in 2019.

Stochastic rounding and privacy - I'd be interested to hear what actuaries who have dealt with experience studies think about this concept. I hadn't really thought about the potential consequences of cohorting in certain ways.

How busyness leads to bad decisions - Yikes.

You churn through the day at work under deadline pressure, racing to meetings, dashing off emails, feeling busy, purposeful and a little breathless. Yet as the end of the traditional workday draws near, you realise with a sinking feeling that you haven’t even begun the big project you meant to tackle that day.

So you bring work home, or decide not to and can’t stop feeling guilty about it. Either way, your work is spilling over into the rest of your life, stealing time and mental bandwidth away from family or rest or fun, and leaving you feeling exhausted and a little resentful. You resolve that tomorrow will be different. But come morning, you inevitably find yourself back on the treadmill of busyness.

Why ‘Find Your Passion’ Is Such Terrible Advice - I've shared similar articles to this with others in the past. You don't ‘find your passion’; you develop one over time.

Don’t Let a Lack of Self-Awareness Hold You Back - Something to be mindful of:

It’s that particular behavior, habit or mind-set that is self-destructive but that we’re completely blind to. Personally, professionally or otherwise, it’s something that’s holding us back from achieving our full potential, but for whatever reason, we simply can’t see it ourselves.

Metaflow - I love all of the recent work that Netflix has been open sourcing lately. This looks like it could be useful for data scientists.

McKinsey & Company: Capital’s Willing Executioners - A long read about McKinsey. If this quote sounds interesting, it's worth the read:

We are now living with the consequences of the world McKinsey created. Market fundamentalism is the default mode for businesses and governments the world over. Abstraction and myth insulate actors from the atrocities they help perpetuate. Businesses that resisted the pressure to rationalize every decision based on its impact on shareholder value were beaten out or eaten up by those who shed the last remnants of their humanity. With another heavyweight on the side of management, McKinsey tipped the scale even further away from labor, contributing directly to the increase in wealth inequality plaguing the world. Governments are now more similar to the private sector and more reliant on their services. The “best and the brightest” devote themselves to client service instead of public service.

Symptoms of Groupthink - My first manager talked at length about biases that arise in decision making. This is a brief introduction to groupthink.

Portability and Interoperability - I'll always recommend reading Ben Thompson. There is a lot going on right now with data privacy, governments, technology firms, and regulation. I don't think their is a right answer, but it will be interesting to see how it plays out in the near future.

What happens when you add a new teller? - A neat article on queuing theory.

Floating Point Math - Actuaries take note.

Troubling Trends in Machine Learning Scholarship - I'd argue similar criticisms for those that preach the ML/AI hype.

In this paper, we focus on the following four patterns that appear to us to be trending in ML scholarship:

  1. Failure to distinguish between explanation and speculation.
  2. Failure to identify the sources of empirical gains, e.g. emphasizing unnecessary modifications to neural architectures when gains actually stem from hyper-parameter tuning.
  3. Mathiness: the use of mathematics that obfuscates or impresses rather than clarifies, e.g. by confusing technical and non-technical concepts.
  4. Misuse of language, e.g. by choosing terms of art with colloquial connotations or by overloading established technical terms

Polyhedral Compilation and Polytope model - I wonder if any actuarial projection software uses these concepts to optimize nested stochastic loops (or if that's even possible). My money is on no, but I'd love to be proven wrong.

That's it for this week. Again, if you have anything you want to share or have any comments, shoot me an email at links@houstonp.com.