Unsupervised learning in a black box

Wednesday, 21 February 2018
Melbourne, Australia
By Bernd Struben

  • 5,000% growth in eight years
  • This could see the economy booming
  • The lady doth protest too much, methinks

You should have received an email earlier today regarding Sam Volkering’s ground-breaking new research report.

If you’ve read the report already, today’s title should make some kind of sense.

If not, you may be envisioning a group of students fooling around in a dark space. Fortunately, Sam’s ‘Black Box Equation’ has nothing to do with locking children away to learn for themselves.

While the report is brand new, Sam’s been atop the near limitless potential of unsupervised learning for years over at Revolutionary Tech Investor.

That’s the same service where Sam recommended readers buy bitcoin back on 23 November, 2016. At the time bitcoin was trading for around US$740. And no other financial analysts I’m aware of were going anywhere near cryptocurrencies.

But Sam’s love of revolutionary technology always has him thinking 6–12 months — or more — into the future. And he’s constantly analysing which companies should benefit the most from tomorrow’s breakthroughs.

So what is unsupervised learning? And why could it see a select number of stocks’ share prices rocket?

We’ll get back to that right after the markets.

Or you can check out Sam’s complete report now by clicking here.

Markets

First, a quick mea culpa.

In yesterday’s Port Phillip Insider, I reported Friday’s closing figures for US markets, not Monday’s. US markets were closed on Monday for the President’s Day Holiday. They opened again on Tuesday.

And overnight, the Dow Jones Industrial Average closed down 254.63 points, or 1.01%.

The S&P 500 lost 15.96 points, or 0.58%.

In Europe, the Euro Stoxx 50 index finished up 27.29 points, or 0.80%. Meanwhile, the FTSE 100 lost 0.01%, and Germany’s DAX climbed 102.30 points, or 0.83%.

In Asian markets, Japan’s Nikkei 225 is down 26.37 points, or 0.12%. China’s CSI 300 is closed for the Spring Festival Golden Week holiday.

In Australia, the S&P/ASX 200 is down 2.05 points, or 0.03%.

On the commodities markets, West Texas Intermediate crude oil is US$61.90 per barrel. Brent crude is US$65.25 per barrel.

Gold is trading for US$1,329.78 (AU$1,687.97) per troy ounce. Silver is US$16.47 (AU$20.91) per troy ounce.

One bitcoin is worth US$11,347.52.

The Aussie dollar is worth 78.78 US cents.

5,000% growth in eight years

When you think about artificial intelligence (AI), what comes to mind?

Perhaps it’s the benevolent androids, R2-D2 and C-3PO, from the Star Wars movies.

Or maybe it’s Schwarzenegger’s Terminator, sent back in time by the decidedly non-benevolent Skynet.

AI has long had a starring role in the annals of science fiction. Sometimes to the benefit of mankind. Often to our detriment.

And while true artificial intelligence remains elusive, the race is on to unlock the key to the most revolutionary technology in the history of mankind.

The kind of technology that can see machines learn on their own, in what’s known as unsupervised learning.

The key to success lies in the coding. Sam calls this the ‘Black Box Equation’. And the big tech companies are all vying to be the first to crack this equation. Companies like Google, IBM, Facebook, Amazon, Apple, and Microsoft.

It’s already a US$640 million industry. And by 2025 it’s predicted to be worth US$36.8 billion.

That 5,000% growth is likely to see early investors in the right tech stocks pocket huge gains.

But as Sam says, we won’t be seeing this kind of growth from the tech titans. He believes a handful of smaller companies are best positioned to capitalise on this potential 5,000% growth spree.

Like the three revolutionary companies he recommends in his new ‘Black Box Equation’ report.

This could see the economy booming

As mentioned above, the industry involved with developing and manufacturing AI could well be worth upwards of US$36 billion by 2025.

But the potential wealth creation is far larger.

How much larger?

Consulting firm AlphaBeta estimates that harnessing this technology could add $2.2 trillion to the Australian economy alone by 2030.

Google, on the other hand, projects the boost to the Aussie economy from smart machines and automation may be ‘only’ $1.2 trillion by 2030.

From The Australian Financial Review (AFR):

‘[I]n its submission to a Senate inquiry into the future of work, Google claimed the Australian economy would reap economic gains of up to $1.2 trillion by 2030 from automation.

That’s if businesses properly redeployed workers when their tasks are automated, and if the government developed effective policies to retrain 3.5 million at-risk workers…

Despite the investment in artificial intelligence and the advent of technology solutions like robotic process automation, Google estimated that the average amount of automation across Australian jobs will be a further two hours a week through to 2030.’

The potential here is greater than the early days of the microchip…which helped enable the internet.

It’s even greater than the internet, without which decoding the Black Box equation would be far more difficult.

Machines capable of teaching themselves — and each other — could change the world we live in faster than any development in history. The type of work you do and how you do it. The types of games and sports you play and how you play them. Your level of healthcare. Your means of transportation…

Everything.

And the really exciting — and frightening — thing is that this technology can and will be applied in ways no one has even thought of yet. No one.

The first companies to crack the code will set the wheels in motion for what could be the biggest period of technological innovation ever. And their share prices should shoot the lights out.

Over the past few weeks, Sam Volkering has narrowed the broad field of competing companies down to his favourite three stocks.

As he writes, ‘They have their finger right on the pulse of this fast-moving industry, and are aggressively striving to innovate.’

Sam will also be the first to tell you that there are no guarantees when it comes to investing in revolutionary technology stocks. Some go up 1,000% or more in a matter of months. Others can lose half their value or more just as quickly. That’s why we always remind you never to invest more than you can afford to lose.

Not that Sam expects his three ‘Black Box’ stocks to flounder.

You can get all the details here.

The lady doth protest too much, methinks

In yesterday’s Port Phillip Insider, we had a look at Australia’s mountainous $2.47 trillion in household debt. A figure that includes debt-free households.

As noted by Your Mortgage, that works out to a 200% debt-to-income ratio. Even with welfare payments counting as income.

Data from the Australian Bureau of Statistics shows that home loans make up 56% of total household debt. Or $1.4 trillion.

That’s a heck of a lot of debt tied into homes. Especially when property values are starting to come down. Dwelling values fell 0.9% in Sydney in January, according to CoreLogic. That leaves Sydney’s home prices down 2.5% over the last quarter.

Putting two and two together, I sounded a note of caution yesterday. But apparently without reason. Everything is just fine. Nothing to see here. At least according to the Reserve Bank of Australia (RBA).

This headline comes from today’s Australian Financial Review ‘RBA pushes back against debt doomsayers’.

Not me, certainly?

The article continues:

The Reserve Bank of Australia has hit back at warnings about the ability of debt-laden households to weather higher interest rates, expressing renewed optimism that wages growth will gradually firm and renew consumer spending appetites.

Revealing fresh research into how few households are struggling to pay their debts, Reserve Bank assistant governor Michele Bullock said the financial risks thrown up by the nation’s debt load is relatively modest…

“Indeed, the debt-servicing ratio (defined as the scheduled principal and interest mortgage repayments to income ratio) has remained fairly steady at around 10 per cent despite the rise in debt,” she told a responsible lending and borrowing conference in Sydney.

“This suggests that, as recently as 2016, mortgage repayments were not at levels that would indicate an unusual or high level of financial stress for most owner-occupiers.”

Well there you have it. The financial risks from the debt load are ‘relatively modest’.

And thanks to record low interest rates the ‘debt-servicing ratio has remained fairly steady’.

And surely wages will rise…eventually.

Then households will be able to meet their debt obligations without an ‘unusual level of financial stress’ even faced with higher interest rates. Or at least, according to the RBA’s assistant governor, ‘most owner-occupiers’ should be able to.

Maybe so.

But for some reason William Shakespeare’s Hamlet comes to mind. In particular the line spoken by Hamlet’s mother, Queen Gertrude while watching a play based on her own life.

The lady doth protest too much, methinks,’ she says.

Me too, Gertrude. Methinks so too.

Now before you log off, have you seen this story from The Australian Tribune?

Tasmanian Police Minister Makes Frightening Proposal

It’s one more sign of the dangers 21st century technologies pose in the wrong hands.

In this case those hands belong to the Tasmanian police force.

There was a time, not long ago, when police officers themselves enforced speed limits on Australia’s roads. Real people, interacting with other real people.

That enforcement has largely been handed off to cameras, which now contribute to the bulk of revenue police derive from traffic infringements.

But Tasmania may be upping the ante in the very slippery slope of government surveillance…’

If you’re fed up with sanitised, politically correct dogma cut and pasted from one mainstream source to another then The Australian Tribune is for you.

And it’s absolutely free.

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You can visit our website at https://www.theaustraliantribune.com.au/ to read the complete article above now.

Cheers,
Bernd