Artificial Intelligence Swarm Algorithm Correctly Predicts Top Four Derby Superfecta, and Why all Degenerate Gamblers Should Care

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UNU–  …That’s why the holy grail at the racetrack is the Superfecta, where bettors are asked not only to pick the winner, but the second, third and fourth horses to finish the Derby. This is fiendishly difficult task that, not surprisingly, defeated every expert at Churchill Downs, where no one predicted the top four horses correctly, much less in the correct order. In the world of AI, even Bing Predicts blew it, picking only heavily favored Nyquist to win the race, but missing the other 3 picks entirely.

So, when Hope Reese, a reporter for Tech Republic and the Atlantic, challenged Unanimous A.I. to use UNU to predict the winners of the Kentucky Derby, “we were reluctant to take on this challenge,” says David Baltaxe, Chief Information Officer at Unanimous. “Nobody here knows anything about horse racing, and it’s notorious for being highly unpredictable.  Still, UNU surprises us again and again, so we recruited a swarm of volunteers through an online ad. The whole thing took 20 minutes.”

During an initial 10-minute session, the group used UNU to answer questions as a unified Swarm Intelligence, narrowing the field of 20 horses down to four winners. The swarm was then asked to order the four winners into Win, Place, Show, and Fourth. Then, a week later the Kentucky Derby announced the post positions of the horses, which impacts the potential outcome. So, the Swarm Intelligence was convened again, and asked if any changes should be made. One of the four picks was replaced by an alternate. This process took another 10 minutes.

Over the weekend, the “UNU” team successfully predicted the top four finishers in the Kentucky Derby, leading the team to cash in on almost $13,000 dollars on a $20 bet. UNU, or Unanimous Artificial Intelligence, develops technologies for Swarm intelligence. This software allows users to put together their intelligence in a swarm-like fashion to combine emotions, thoughts, and feelings in real time. This process can be used to make decisions, answer questions, or to help answer debates. For those of you familiar with the Swarm concept in drone technology (..crickets), this technology works in a similar fashion.

Swarm is not just a simple aggregate of opinions as a survey is. The technology actually works to avoid biases by creating a real-time dynamic system, constantly changing with each additional person’s input. The participants in this case of the Kentucky Derby were not horse racing experts, just regular fans working with the same goal in mind. The easiest way to understand the swarm is that it is a collection of everyone’s brain making a decision all in the same time frame.

Having said that, I know your local degenerate gambler does not give a shit about swarm technology. However, what I think they should pay attention to is how this system correctly predicted the Superfecta this weekend, and what this means for the future of sports betting. Based on my calculations, the odds of correctly picking the top four correct in the Derby are 1 in 116280 (20*19*18*17, avoiding handicaps). The fact that the algorithm correctly picked not just the favorite to win, but Exaggerator, Gun Runner, and Mohaymen to follow in that order is something else.

Although sports have a certain degree of randomness to them, what you need to understand is that over time, results are not random. The reason why sharps make lines that are almost always spot on is that they use the resources of statistics and probability to make accurate predictions over the long-run in sports. Algorithms like this one will allow bettors who do not necessarily have the means to make these determinations to pool their collective resources together. As sports become more and more predictable as our computational abilities become more and more advanced, sports betting will forever change as we know it. Although odds do change to reflect accuracy over time, the winning margins will become smaller and smaller. Listen, I’m not saying that this bot will be correct forever. In fact, the race broke as many had predicted, resulting in the top four finish. But over time, no one can argue that these technologies will help bolster the abilities of bettors around the world. The only thing that won’t be affected will be March Madness, because I don’t think any computer predicted Middle Tennessee State to knock off the Spartans this past March (had the Spartans winning the whole thing…).

-KJ

Carl Icahn Sells his Entire Stake in $APPL, Is it the Next Nokia?

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The Guardian– Carl Icahn, the billionaire activist investor who has long been one of the most prominent voices declaring the company to be undervalued, says he has sold his entire stake in the technology firm, citing the risk of China’s influence on the stock.

After years of high growth, reaching triple-digit percentage points in 2015, Apple now sells more in China than it does in the whole of Europe. But sales in the country are now shrinking, with revenue dropping 26% year-on-year in the company’s latest quarterly earnings. Icahn’s concerns aren’t related to the China slowdown, however. Instead, the investor is concerned with the barriers to trade that China’s authoritarian regime might put in place.

“You can’t go into that business unless you’re like Samsung which is really like a country backing it,” Icahn told US cable television network CNBC. “A lot of people tried, a lot of people failed … In China, for instance, they will come in and make it very difficult for Apple to sell there. They could theoretically, you know … They’re basically in some senses I would say, perhaps benevolent but a benevolent dictatorship. I don’t know if benevolent is the right word.”

For those that do not know, Apple released their Q1 earnings report this past week. Analysts had been warning that this quarter would be the one where Apple finally falls from its insane climb, and the earnings seemed to match this sentiment. This is the first quarter in 13 years that Apple has recorded a YOY negative growth, in part because of declining sales for their iPhone line and troubling outlooks for their new Apple Watch line. The Guardian reported today that Carl Icahn, a mega-investor worth over $23B, has pulled out his entire $APPL position over scares of Chinese influence over the stock.

This is big news for APPL investors because when Carl Icahn pulls out of an investment, you pull out of an investment. It will become increasingly difficult for Apple to gain more traction in China, one of their biggest potential market growth areas. Fear of government regulations combined with declining interest of Apple products in favor of cheaper and more “fashion-friendly” phones have begun to gain market share. All technology shares seem to follow the Nokia bell curve of dominance, where they slowly rise to an insane market growth and maintain for a few years, only to then quickly fall out of grace. Although Apple has become synonymous with the cell phone and computer industry, do not think for a second that they can maintain this growth forever. Sales dropping over 26% on the quarter is a big signal that $APPL can no longer just put out another marginally-changed product and rake in billions. Without another huge innovation on Apple’s part, perhaps into the VR world, Apple may fall from its spot as world’s top tech stock. All I know is that I don’t think I have ever pulled out of something as fast as I have $APPL (Cromartie could learn a thing or two here).

-KJ

 

SunEdison Files for Chapter 11, Gamblers Rejoice (Or Cry)

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WSJ– Solar-power company SunEdison Inc. filed for bankruptcy protection on Thursday, pledging to curb a debt-fueled global expansion that pushed the company’s stock to great heights before fueling its rapid collapse.

The filing caps a dramatic decline for a company that was worth nearly $10 billion last summer, when it nurtured plans to become a global clean-energy giant. SunEdison used a combination of financial engineering and cheap debt to buy up renewable-power projects around the world before the market turned sour last summer and investors soured on its business model. 

SunEdison said it would use the bankruptcy process to reduce its borrowings, which stand at more than $16 billion, including the debt of two publicly traded subsidiaries, TerraForm Power Inc. and TerraForm Global Inc. Those subsidiaries—separate entities known as yieldcos that buy operating projects from developer SunEdison and pay out cash flow to their shareholders—didn’t file for bankruptcy and said in statements that they have sufficient liquidity to continue to operate, though much of SunEdison’s value is derived from its controlling stake in them.

In a move predicted by almost everyone, SunEdison ($SUNE) filed for Chapter 11 Bankruptcy Protection today in hopes of saving its bloated debt and sinking equity. For those of you that frequent high-volatile stocks, $SUNE should be almost all too familiar to you. Investors have been riding the highs and lows of this stock for much of the past four years. From a high of over $30.00 to a low of $0.30 today before the SEC halted trading, $SUNE has been an absolute clusterfuck of a stock to own.

Investors have been weary recently as $SUNE released their financial numbers to the public, showing that they have been hiding a large amount of debt that almost seemed insurmountable to sell off or mitigate. However, wall street bettors have been clamoring over both shorting and picking up stock, flipping their mind back and forth as news from the company shifted. Between 2013 and 2016, the company acquired over $18 billion in assets from various companies in an attempt to become the world’s leading solar power conglomerate. However, over the last 12 months, their stock plummeted to lose over 99% of its value. The SEC is currently looking into the company to see if SunEdison was honest with their investors in their financial assessments.

Some are arguing that once the stock returns to the market under the $SUNEQ designation, it will quickly plummet to zero dollars. Others are arguing that the company will be able to get enough outside help to cover its initial debts and get through the tough times. Personally, I am running the hell away from this stock as soon as it comes back, but only because I have been burned so badly in the past. Only time will tell.

P.S. Prince and $SUNE on the same day… I’m going to need a minute.

-KJ