October 30, 2014

Why you need a better recommendation system

I've just finished the first version of a new project currently called August Shield 743. The idea behind the name is simple: it was generated by Google when I created the API-key I needed to complete the project. But as the name sounds like a secret Navy Seals operation I decided to keep it.

August Shield 743 is a blog-article-recommendation-system and it took about a week to complete the first live version. The idea behind a recommendation system is to recommend x based on a,b,c,... where x could be a movie, a book, or as in this case a blog article. If you have visited Amazon and at at the bottom of the page saw the heading "Customers Who Bought This Item Also Bought," you will know what I'm talking about. For example, if you want to buy the Steve Jobs book, you will notice that other people also bought the book Einstein and Benjamin Franklin. Amazon is finding these suggestions with the help of a recommendation system. 

Last year I read the book The Everything Store, which is a biography on Jeff Bezos, who founded Amazon. The section from the book I remember the most is the section where the author talks about the first version of Amazon's recommendation system. It goes like this:
Eric Benson took about two weeks to construct a preliminary version that grouped together customers who had similar purchasing histories and then found books that appealed to the people in each group. That feature, called Similarities, immediately yielded a noticeable uptick in sales and allowed Amazon to point customers toward books that they might not otherwise have found. Greg Linded, and engineer who worked on the project, recalls [Jeff] Bezos coming into his office, getting downed on his hand and knees, and joking, "I'm not worthy."
According to the book Big Data, a third of all of Amazon's sales are said to result from its recommendation and personalization systems.

So a recommendation system is a really powerful tool you can use to increase sales. With this thought in my mind I had earlier installed another recommendation system om this blog called LinkWithin. I've used that system for a while, but I realized that it didn't give any good recommendations. You don't need just any recommendation system - you also need a recommendation system that generates good results. 

Improving a recommendation system is actually very complicated. When Netflix wanted to improve their recommendation system they decided to make a competition out of it called Netflix Prize, where the winning team would win 1 million USD. Despite the reward, it took no less than 3 years before the competitors had developed an improved system.

But improving LinkWithin took about a week, and the solution looks like this:
  1. Read the blogger-data with JavaScript
  2. Clean the data to remove strange characters and unneeded words
  3. Find recommendations by using a similarity measure called Jaccard distance. I've here found the distances between the title, text, and labels and then added them together, so articles can get a score between 0 and 3, where 3 means that it's the same article. The system is general and will work for all blogs because I didn't specialize it to just this blog 
  4. Store the data in a database
  5. Read the data and add recommendations to blog articles

This was the result:

Recommended articles with the LinkWithin system:
  • The Random Show with Kevin Rose and Tim Ferriss (has nothing to do with the article)
  • Experiments with Blender (has a little bit to do with the article because I developed the car model in Blender)
  • Quote: Edward Tufte (has nothing to do with the article)
Recommended articles with the August Shield 743 system:
  • Tesla Motors Simulator Update (has everything to do with the article)
  • Tesla Motors Simulator (has everything to do with the article)
  • Tesla Motors Test Track Simulator (has everything to do with the article)
  • Catacomb Snatch 3D  (has a little bit to do with the article because both Catacomb Snatch 3D and the simulator were developed in Unity)
  • The Engineer Update 3 (has a little bit to do with the article because The Engineer is a biography on Elon Musk, who co-founded Tesla Motors)

If you are interested in learning how to develop your own recommendation system, you should read the following books:

October 21, 2014

Tesla Motors Simulator Update - GTA Style


I've updated my Tesla Motors Simulator. Before this update you could only drive the red Model S, but now you can change car like in Grand Theft Auto. I've also improved the performance by using custom collision meshes. Next step is probably to add another model, maybe the Roadster or the Model X?

Looks interesting? You can test it here: Tesla Motors Simulator

October 14, 2014

The best daily rituals from the book Daily Rituals

I've read a cool book called Daily Rituals - How Artists Work by Mason Currey. The book has summarized in very short chapters what more than 100 artists were doing when they created art. Famous artists in the book include the authors Stephen King and Isaac Asimov, and the painters Andy Warhol and Pablo Picasso. You can also find a jazz-player, an architect, and some lived in the 17th Century. Stephen King has written his own book on how to write books called On Writing, but most other artists haven't done it.

Here I've tried to summarize with short sentences the findings from the book. I've already read a few books on how to write when I wrote a biography on Elon Musk, so it was interesting to complete my knowledge.

  1. Military discipline, drugs
  2. Extreme chaos, an excess lifestyle
  3. 2-3-month vacations, work above all
  4. Non-sexual exploration of the penis until inspiration arrives, large quantities of coffee and tea, standing up 
  5. Manic work, cigarettes, doughnuts, a bottle of vodka, pet snails
  6. 3 hours of sleep at a time, use the social network
  7. Out of 8 hours of hard work, it's only 10 minutes of actual creation, periods of isolation on a distant island, almost no drugs or alcohol, music
  8. Live like a monk, only work before lunch, copy what you have written to find new ideas, a good chair
  9. Only a few hours a day of work, but be busy the rest of the day with other tasks
  10. Exactly 60 beans per cup of coffee, take breaks to walk outdoors (bring paper and pen if you find an idea), take long baths
  11. Write - take a walk and find new ideas - write until evening
  12. Work in bed until noon - then work until evening for a total of 18-20 hours a day
  13. If you have a virtue - focus on it for a week - then it will become a habit, take a cold bath (sit in a cold room without any clothes for an hour)
  14. Begin at 5.30 AM by reading what you wrote the day before, then eat breakfast, then go to your normal job. 3 hours of writing per day is enough - if you work more than that you will not be effective - and use this time effectively
  15. Live like a normal person
  16. Let the initial ideas come to you automatically - then isolate yourself for whole days and work hard to realize the ideas. It can take 6 weeks to finish 1 page
  17. Write during the night because it's more quiet, take a short break when you are stuck. 2 pages can take 1 week, and 1 book can take 5 years
  18. Work at night, drink alcohol constantly, and don't sleep much (and die at 36)
  19. Wake up at 8 AM, isolate yourself from visitors, family and telephone and work until noon, then do something else
  20. Work in a museum reading-room all day until it closes, then go home and continue working. It may take 20 years to finish 1 book
  21. Focus on your work and let someone else do everything else (including putting toothpaste on your toothbrush), smoke 20 cigars per day, take a 3-month summer vacation
  22. Isolate yourself in a primitive house without electricity or water and work for 2 hours per day - but only on holidays because you've kept your regular job
  23. Art is a part-time activity - but give your neighbors opera tickets so they keep their dogs quiet
  24. Wake up at 8 AM, have a bath and breakfast, work between 10 AM to 1 PM
  25. Enjoy everything and never be bored - exotic birds in cages might help you
  26. Exercise is important if you want to avoid depression, avoid commercial social events
  27. Force yourself to drink coffee, write for 30 minutes per day, look at cows when you are not writing
  28. Wake up by the first light of day - even if you have an hangover - then write (while standing up) until you are out of ideas
  29. Write as much as you can. But if you discover that you can't write after noon, then don't write. 2-3 hours per day may be enough
  30. Write in brief bursts of concentrated activity when you can write 8,000 words in one session, avoid alcohol
  31. Adapt to various schedules as necessary, then you can write up to 10,000 word per day
  32. Wake up early, write, tear up what you've written, repeat until you produce something good
  33. Dedicate your life to your work, don't wait for inspiration to strike
  34. If you feel like working during the night, then do it - if you feel like working during the day, then do it. Don't force it - it may take months before you can continue writing
  35. It may be easy to write during the night - but make sure to read it because easy doesn't mean good results
  36. Chain yourself to your desk
  37. Wake up at 4 AM, write for 6 hours, physical strength is as important as psychological strength
  38. Have a 9-5-job and write when you can
  39. Write, write, write until you have produced one single page per day. The first draft is always difficult, but once you've figured it out, the rest is easy
  40. 3 hours in the morning, 3 hours in the afternoon, working more is counterproductive because you are producing garbage, keep your TV or radio on in the background
  41. Write whenever you can and have something to write
  42. Do it all by yourself, do it regularly to avoid writer's block, switch off in the evening, don't plan too much
  43. Concentrate for a few hours and take a break when you've done something good
  44. Work from different places and change your routines whenever you begin to work on a new piece of art. If you are a good writer in the morning, then you can simulate having 2 mornings by first waking up and write, and then go to bed and wake up again
  45. Set the alarm clock a few times during the night when you are sleeping and work a little
  46. Write 1,000 word before breakfast
  47. Work for 13 hour per day, but take breaks
  48. Write when everyone else is sleeping
  49. Drink green tea and wash your feet in warm water. Write a pep talk with solutions to common problems you can read to yourself when you need it
  50. Live like a machine with standardized routines
  51. No habits and a life never really under control
  52. Work until noon, prepare the next day's work in the evening
  53. Have a regular job where you can work despite that you are tired because you've written all night
  54. Work when your mind is at its best, drink alcohol to clear your head, 1 sentence can take 1 day, and 1 book can take 7 years
  55. Withdraw from society, work at night, go out only when you need to gather facts, live on 2 croissants and 2 glasses of boiled milk a day 
  56. Isolate yourself in a room, use your depression to find inspiration
  57. 3 hours of work per day is enough
  58. Walk 12 miles (19 km) a day, work in cafes - not restaurants if you love food
  59. Go to bed late and wake up late, isolate yourself, surround yourself with your work and animals (including a monkey), drink water and milk, dedicate Sundays to social life
  60. Work too much and sleep too little, use drugs, cigarettes, coffee, and alcohol to stay awake
  61. Work in the evening
  62. Do all the work in your head and write it down when it's finished
  63. Have a normal job to get day-to-day stability and experience you can use in your writing
  64. All you need is a typewriter and a desk
  65. Work for 4 hours and before you begin you should know the first sentences, face your desk against a blank wall
  66. Rent a studio and keep the location of the studio as a secret so no-one knows where you are
  67. Work at night at the kitchen table
  68. Struggle with writing all day, use sleeping pills to fall asleep, wake up, write until your children wakes up, repeat
  69. Put on a suit as a normal worker, take the elevator to the basement of your apartment building, take off your suit and work in your boxers until lunch, put on your suit again and take a break the rest of the day
  70. Experiment with self-medication that will make a doctor horrified
  71. No matter what, write for 2 hours a day, 5 or 6 good sentences a day is enough
  72. Have a normal job so you don't have to worry about money, find ideas while walking
  73. Stop writing when you know what's going to come next - then it's easier to start the next day
  74. Write for 2 hours a day
  75. There is no rule so you don't have to follow a writing routine, always think about what you are going to write - while waiting for the elevator, swimming, etc
  76. When you know the story, it's easy to write it down, you need to be obsessive when coming up with the story, try to change something when you are stuck - like changing room, take a shower, etc
  77. Eat something with sugar in it or meditate to find new ideas
  78. Write in hotel rooms - not at home, push yourself to the limits of your ability
  79. Find new ideas while ironing
  80. Work in the night and improve the work the next day, use your dreams to find solutions
  81. Write for 4 hours during the day, go though what you've written in the evening, always work in your bed
  82. Go to the park (even if it's raining) and write there for 4 hours, discuss with someone what you've written, then improve what you've written in your home
  83. Work for 12-14 hours, have fun in the evening
  84. Work all day, get drunk in the evening, almost never go out
  85. You find the best ideas when you wake up, so use that time effectively, complete everything in your head before you write it down
  86. Have a normal job and begin a new "day" of work at 10:30 PM where you write
  87. Work for 12+ hours a day
  88. Have a normal job, work for 2-3 hours in the evening, and you will have a book after 8 years
  89. Have a normal job and your own office where you can close the door. Finish your scheduled "normal" work in 1 hour and work on your own project the rest of the day
  90. Work from 10:30 AM to 5:00 AM, work in the dark
  91. Isolate yourself, communicate only through phone, 1 meal a day is enough
  92. Insomnia is good because you can work more
  93. Continue to write while you can, otherwise stop writing and continue the next day
  94. 3 hours and as many pages a day is enough
  95. Writing is hell so 200-300 words a day is enough, alcohol might help to find new ideas
  96. Writing is a nightmare because it's uneventful and never ends, live alone
  97. Exercise, make a draft with a pencil and improve what you've written with a machine
  98. Write in bed
  99. Meditate while taking a morning walk, write notes in the morning and the complete text in the afternoon
  100. Even an author can be blind
  101. Idleness is essential to good mental work
  102. 1 page a day is enough and you need to have inspiration, so don't force anything
  103. Have rotten apples in your room to feel the urge to write
  104. Work in the morning while smoking pipes
  105. Sleep little, go to church, smoke and drink constantly
  106. Your imagination is exciting enough, so you don't need coffee, drugs, or alcohol
  107. Work a lot by drinking 50 cups of coffee a day - then relax a lot
  108. 2 raw eggs for breakfast, isolate yourself in the morning, then have a cold bath, bring a notebook so you never forget any ideas
  109. Install an extra door to decrease the noise around you
  110. Divide up the work by taking breaks where you can take walks, sleep, read, etc
  111. Live in a farm so you can relax with the animals and vegetables when you are not writing, live in an environment that resembles the environment you are writing about
  112. Write only during the colder months
  113. Writing is a routine, isolate yourself
  114. Isolate yourself, read a book you can learn something from, take a 2-hour walk
  115. Isolate yourself between breakfast and dinner, get feedback on your work in the evening, Sunday is no-work-time
  116. 3-4 hours of sleep is enough
  117. When you have inspiration, work nonstop
  118. Chop wood for 1 hour a day, tape a piece of cardboard to you glasses if you can't concentrate because you are distracted by something in the room, never work in artificial light
  119. Isolate yourself in a desert and begin the day by killing all the rattlesnakes you can find 
  120. It's always difficult to find uninterrupted time
  121. Picture the complete book before you begin writing it, use index card to organize the story
  122. Pray and meditate in-front of what you are working on, sometimes this may take up the entire working-day, smoke
  123. Maintain a rigid schedule - but don't work too much
  124. Experiment with your body, sleep 40 minutes after each 6 hour period of work
  125. Use drugs so you can work 19 hours a day, give away almost all your money, own only a suitcase with clothes, travel the world
  126. Drink tea and carrot juice
  127. Pack a lunchbox and hide somewhere for 4-5 hours, take vacation for months
  128. Write in the morning, afternoon, and evening - but don't forget to take breaks
  129. Order 6 martinis and drink them one after another, then wake up at 9 AM and work, set a goal for each day and stick to it, 6 pages a day, write only what you care about
  130. Rent a office and write for 3-4 hours a day
  131. Keep a simple routine
  132. Find a hobby, like gardening, and divide your time equally between your hobby and your writing
  133. You find the best ideas just as you wake up 
  134. Work 2.5-3 hours a day
  135. If you are using drugs, you can write day and night, sometimes 30 hours before you need to sleep. Don't leave your desk even if you are stuck
  136. If you have a job and no time to write, then quit that job and find one where you have time to work and write
  137. Live in a hotel room, use drugs, work for 24 hours in a pajamas
  138. If you are drinking more alcohol than you are producing art, try to move to a smaller city where you will be less motivated to drink
  139. If you don't want to write and work at the same time, then find a partner and one of you can write while the other work. After a year has passed, you can switch roles
  140. Strong coffee, long walks when you are stuck
  141. 4 hours of writing a day is enough, spend the rest of the day drinking alcohol, cleaning, and taking care of the cats
  142. Make a schedule and stick to it 7 days a week, smoke constantly, read what you've written aloud to yourself, try not to rush - 0 sentences a day might happen
  143. Write when the children sleep
  144. A 4-hour sleep in the afternoon and a 4-hour sleep before waking up at 8 AM might be better than one 8-hour sleep
  145. Wake up at 5 AM and work as long as you can, do this every day, including holidays
  146. Write at a standing desk and keep to your schedule, but if you are really inspired, throw out the schedule and write for 36+ hours
  147. The most important thing is to change routines, clear all distractions
  148. Doodle to find new ideas
  149. Photograph in the morning before you begin to write, be angry to work well
  150. Keep a schedule when the work is going badly
  151. Let the work take over your life, but make sure you have another life when you are not working on a project
  152. You should form good, consistent work habits
  153. Write every day, including holidays and your birthday, and don't quit before you've reached 2,000 words
  154. Insomnia is good because it feels like you have a 28-hour day
  155. Recruit a typist and dictate what you've come up with the night before
  156. Weeks can pass when you don't get anything done, then you find an idea
  157. Eat out only once a year, live on rice and chicken, isolate yourself in a dark room with earplugs, and it will take 4 years to complete a book
  158. Have only music and work where your work - no email, phone, or food
  159. You don't have to work every day - intense bursts of work that lasts for a few weeks might be enough
  160. Work all the time, but only if you like it
  161. You can always find a little bit of time to write 

So, in other words, there's not one daily ritual you should adapt. Maybe the last quote in the book summarizes everything:
"Eventually everyone learns his or her own best way. The real mystery to crack is you."

October 12, 2014

How to hack the art market

A few days ago I decided to sell some old coins I had found deep down in a drawer. It turned out the old collectibles were worth about $5 - not that great. But the expert in the coin store told me he would sell these coins to a guy who bought all of those particular coins. My theory is that this guy will try to buy all of these almost worthless coins, and then melt down all of them - all of them except for one coin. This last coin will now be very rare and thus very valuable because of the supply and demand effect. 

But what about the art market - like paintings and sculptures. Why are some paintings very valuable while other paintings that might look similar are almost worthless. We can can't apply the supply and demand effect here because almost all paintings differ from all other paintings, so we can't generally buy all paintings from one artist and destroy all of them except for one. It might work if the painter is a famous artist - but what if we are stuck with a painting by an unknown artist?

Why are these stools by Ai Weiwei worth at least $500,000? It's not because of a potential future increase in the price of the art - because in the long run your investment in art may only do about as well as your holdings in bonds. And art comes with greater risk.

Grapes by Ai Weiwei. Source: AGO

According to a few articles I've found, this is how you can hack the art market and increase the value of your art collection:
  • Scamming and faking. There's a veteran art dealer who believes there are people who keep the Andy Warhol market hot by manipulating his auctions. There's also people who pay a lot for unknown artists, but these artists will now become famous because someone has bought their paintings, so more people will jump on the bandwagon
  • Previous owners. You tend to pay a premium for a piece once owned by someone famous
  • Famous. Something that has been shown in a museum is worth extra
  • Prestige. One art dealer is famous for saying, "If I can't sell something, I just double the price." Some people prefer to pay more than makes sense because they want to show the world that they can afford it
  • A collection. People want a collection of art by one artist. The demand for old artists with fewer paintings has cooled down, but the demand for artists with many paintings and sculptures, like Andy Warhol and Pablo Picasso, has increased 
  • Improve the work of art. You can add value to any work of art, thus increasing its perceived significance (and price) in the eyes of a collector, by adding:
    • Signature
    • Title
    • Date
    • Number
    • Explanation
    • Documentation
    • Ingredients - so future art collectors can conserve it
  • Other aspects.
    • Paintings of beautiful young women and children are more expensive than ugly old men. But widows in black or sick children are very hard to sell. For example, an orange Marilyn Monroe by Andy Warhol is worth $15 million, but Richard Nixon sells for just $700,000
    • The places in paintings are also important - Venice is more expensive than France
    • Calm weather in paintings is more expensive than stormy weather
    • Paintings with death in them is generally less expensive than paintings with life in them
    • Paintings of eagles are more expensive than sparrows - and this rule can be applied to other animals as well
    • In general, paintings with bright, bold or pale colors are far more expensive than dark works
    • A bigger painting is generally worth more than a small one

Source: Newsweek, ArtBusiness, The Art Newspaper

October 5, 2014

The secret to who is a good trader or investor is meditation

Two of my favorite books that are related to the stock market are Market Wizards and The New Market Wizards by Jack Schwager. What distinct these books from most other books related to the stock market is that they include chapters about psychology. If you didn't know it, it's very important to be aware of your own psychological limits if you are traveling the ups and down of the stock market. 

One of the traders interviewed in the book Market Wizards is Richard Dennis. He understood the importance of psychology if you want to become a better trader or investor. According to another book about Richard Dennis, The Complete TurtleTrader by Michael Covel, Richard Dennis never read any stock market news, such as crop reports or the latest unemployment numbers. What he read was the magazine Psychology Today to keep his emotions in check and to remind him how overrated intuition is in trading. While other traders woke up as early as possible so they had the time to read the latest news, Richard Dennis stayed in bed until the last minute before arriving to the exchange just as trading started. 

One common psychological mistake most novice traders and investors make is that they are buying stocks and other assets when "everyone" else is buying, like during the so-called tech bubble at the turn of the century. When the stock market began to fall, after the burst of the tech bubble, they who had earlier bought expensive stocks were now afraid of buying cheap stocks because everyone else was as afraid of losing more money as they were. 

Another common mistake is called confirmation bias (Wikipedia has the full list if cognitive biases). Let's say you've invested in gold. It's common that you will read information saying gold is a good investment and you confirm what you already know, but you also tend to reject all articles saying gold is a bad investment. 

So how can you control your emotions? It's super-easy to read about psychology, but it's much harder to remember and apply what you've read when you are losing all the money you've saved throughout your life. One solution to this problem can be meditation. 

According to the podcast The Tim Ferriss Show, where Tim Ferriss interviewed Joshua Waitzkin, the secret to who is a good trader or investor and who is not is actually meditation. Joshua Waitzkin is coaching the top hedge fund managers. When Tim Ferriss asked him the question "What are some habits that you've observed that you find interesting?" Joshua Waitzkin answer was: 
"First of all, meditation. Meditation is as deep and as powerful tool as I can possible describe. Maybe six or seven years ago when I was first talking about meditation with guys in the finance world it seemed like some strange thing for them to take on. But as more and more people are integrating it into the process, you wouldn't believe how many of the most powerful players in the world are meditating very deeply."

According to this Bloomberg article, hedge fund managers like Ray Dalio, Paul Tudor Jones, and Michael Novogratz, are fine-tuning their brains with meditation. But what's meditation? Meditation used to have this reputation as a hippie thing, but Samurai practiced meditation to become killers that are more effective. You've probably seen those Buddhist monks who are sitting with their legs crossed and their eyes closed. They are not praying and meditation is not a religion – what they are doing is they are trying to focus on the present. Focusing on the present is actually very difficult. Next time you are brushing your teeth, try to focus on brushing your teeth. But you will probably notice that your mind will wander away and you will think thoughts unrelated to brushing your teeth. 

If you can focus on the present, you will be able to move away from your other thoughts and make better decisions. If the stock you've bought is falling through the floor, you have to ignore your bad thoughts to not panic and try to remember the cognitive biases to not sell the stock just because it's falling.

October 4, 2014

How to turn a blog into a multi-million-dollar business with the help of Tim Ferriss and Ramit Sethi

My latest addiction is a podcast by Tim Ferriss called The Tim Ferriss Show. We have earlier met Tim Ferriss on this blog since I'm also addicted to his YouTube-show called The Random Show. Anyway, the latest podcast chapter featured Ramit Sethi who runs the blog I will teach you to be rich

It's super-important to have a popular blog because you can market your thing (product, service, or whatever you have) by writing articles and marketing by blogging is free - and marketing your thing through ads is far away from free. Here are a few lessons learned from the podcast on how Ramit Sethi and Tim Ferriss grew their respective blogs:
  • Ignore haters. The people who are hanging out on the Internet mirrors the people who lives in our society. We all know that some people in our society are mentally unstable so it's natural that there will be some mentally unstable who visit your blog where they criticize you.
  • Focus on quality. One good article can change your life forever.
  • Don't focus on everyone all the time. You can never write an article that everyone will enjoy reading. A rule Tim Ferriss has says that an article he has written should appeal one group of his visitors once every 2 months.
  • Collect your visitors e-mail. Ramit Sethi explained that one of the biggest mistakes was to not set up an e-mail list and he estimated that this mistake has costed him millions of dollars because e-mail lists generate 90 percent of his revenues. And don't forget to e-mail those who have signed up. It took Tim Ferriss seven years before he decided to use e-mail lists! 
    • Don't forget to make the e-mail you send look interesting - they are not newsletters.
    • Make sure your users can respond to the e-mails they get and you should read all of the replies. This will make it more personal and your users will reveal more information about themselves that you can use.
  • Use data to improve. Analyze how your visitors are using your blog and how they are reading your e-mails.
  • Avoid ads when you are new. The first 3 years, Ramit Sethi decided to not have ads on his blog because he didn't want people to believe he had started the blog just to make money.   

That's it! Oh, and you need to invest a few years of your life as well...