A Wardley map of the company NVIDIA 2020

This map tries to visualize the situation of this company in 2020. Focusing on trying to understand its current situation and where its investments are going.

The map

The Players

I’ll use this 2018 and 2019 billing table as a reference to see who the top players in the industry are.

NVIDIA is in position 10 of the ranking

We can see that companies like AMD are not in this table of 15 companies. And that others like TSMC are doing very well and are not known.

Well, let’s focus on NVIDIA, the tenth on the list.

Point 1.- Area where the market is mature, war zone

In this market for computers and graphic display and video games are in a high degree of industrialization and maturity.

The war is focused on:

  1. Be the fastest to release the next versions of chips with less size (now the struggle is to get the 7nm one in a stable way and producing massively).
  2. The struggle to shrink lithography always fills the media covers, but this is not a definite competitive aspect (there are many others).
  3. Note that TSCM plans to release the 3nm lithography at the end of 2021, which is when Intel plans to release the 7nm one.
  4. To continue to be a benchmark differentiated from competitors (Intel, Samsung, Micron, Qualcomm, AMD).
  5. Continue to work with large, higher-order manufacturers and shield these large customers from other competitors.
  6. It is in this area where companies are making the most money right now and where margins are slowly falling.

The computer market is a market in decline due to the use of tablets and mobiles. That’s why the focus for billing growth is on data centers.

Point 2.- Data centers

The number of services and the volume of data processing continues to grow exponentially and it is recognized that the data center business is one of the areas that still has the capacity for growth with a not negligible volume.

This is where the entire industry is making a lot of effort, both organically and through acquisitions.

To consider:

  1. Acquisition of Mellanox Technologies , which provides end-to-end connectivity solutions for servers and storage that optimize data center performance. (2019 – 6.9B $).
  2. Acquisition of SwiftStack  , its innovations power private cloud storage for enterprises, offering the benefit of the public cloud, but at the IT controls of the infrastructure.
  3. Acquisition of Cumulus Networks , a software company, designs and sells Linux operating systems for network hardware.
  4. Amazon acquired Annapurna Labs in 2016 to be able to dispose of its semiconductor area, recognizing the need to be present in this area of ​​the business that is critical for them. Facebook announced intentions to make investments in this regard in 2019, but at least I have not read more about it.
  5. Google and NVIDIA have announced improvements in the execution speeds of their Machine Learning systems, these types of close collaborations are very relevant and provide value, billing and brand image.

By comparing with Intel (the leader in the market), they acquired Habana Labs , which is a semiconductor company that focuses on developing disruptive solutions for the data center and cloud efficiency. They also acquired Rivet Networks , which is a technology and products company focused on creating the best possible network experience for users.

AMD for its part has not made any acquisitions since 2017 and Qualcomm since 2014 (I know, I’m just focusing on US market, and I’m ignoring Asian players).

3.- Emerging market, innovation programs

In a market that evolves as fast as that of semiconductors, it is necessary to pay attention to the quality of the innovation programs that companies are doing. The software giants are making great strides on things like bid data, machine learning, neural networks, and artificial intelligence. For this software to be able to function in a reasonable time, it is necessary that there be electronics that allow the massive treatment of data and computing needs.

Points to consider:

  1. Business development in artificial intelligence is the final goal to be achieved by all companies.
  2. The development of artificial intelligence depends on the final objective: cars, genetics, retail … here NVIDIA is already developing activities in the automotive sector and the acquisition of Parabricks  provides development capacity in genomic analysis (they analyze the complete human genome in less of an hour compared to other competitors who do it in days).
  3. Development in simulation activities is important for the automotive industry and for video games. Here NVIDIA is carrying out important developments.
  4. By comparison, AMD is not investing as much in these areas as NVIDIA is. There is a lot of talk about the 7nm competition between Intel and AMD, but in a period of 5 – 10 years, there will be a very wide market in these areas of Artificial Intelligence where the combination of software and hardware is key and where Intel and NVIDIA are key. they are doing much better than AMD.

 

This review is not all that you could do. If you know specific aspects that could improve this map and the analysis (or correct something that is not right), please tell me, there is no perfect map and talking about a map, is how you can improve the understanding of the context and improve details if proceeds.

WAKE THE F*CK UP, my dear: Stop. Rethink. Second chance.

I read this book as I know the author and I was sure it was going to be as funny as she is.

And the read was valuable and funny, so what else?

some notes for my poor memory:

  • Stop being a zombie
  • IRRELEVANT
  • update your dogmas

 

 

Last but not least, I loved this one:

Watch your thoughts, they become words;
watch your words, they become actions;
watch your actions, they become habits;
watch your habits, they become character;
watch your character, for it becomes your destiny.

Permanent open market operations (POMO)

When the US stock market began to fall in the spring of 2020, the Federal Reserve (FED) announced a stimulus plan of about 2.3 trillion dollars. The press called it a “liquidity injection from the Fed.” Interesting concept, money injection.

But how is liquidity injected into the market? How is all this executed?

Permanent Open Market Operations (POMO)

POMO refers to when the Fed (or any central bank) constantly uses the open market to buy and sell securities in order to adjust the money supply. All these operations go to a portfolio called: “system open market account” (SOMA), which is, in a nutshell, the FED’s portfolio.

This mechanism and these practices have existed for decades, but depending on the moment they become more noticeable or invisible.

When does the Fed buy?

I do not know knows, at least I have not found out, what the FED buys, that is if there is a calendar of purchase days and the estimated quantities that the FED intends to put into circulation. The  calendar looks like this:

It is important to understand how much positions they open and finally how much are completed (since not all trades are ccompleted). On this page you can see the data of operations launched and executed:

Several purchases a day

As can be seen in the image below, the situation may arise that there are several shopping packages per day, such as May 27, 2020. During the worse days of the market they were opening 6 or 7 packs of operations per day.

What is happening this spring / summer of 2020?

Well, a lot is happening, but focusing on POMOs, what is happening is that there are many people looking at this data and operating based on these money flows (considered “free” by some specialists).

The general opinion is that there is a correlation between the money that is put into circulation by the FED (the daily injection). With this, on the day before a liquidity injection there are people who operate in certain values ​​seeking the rise of the day of the “big injection”. How do they operate and what do they operate on? … well, I don’t know.

I am trying to get data and draw it to understand if this correlation exists or is a simple bias.

This graph is the only interesting one I found but it is from previous years:

FED money to major traders relative to S&P 500

FED money to major traders relative to S&P 500

Regarding 2020, the only graph I found is this, which doesn’t tell me much:

FED daily purchases August / 2019 - May / 2020

FED daily purchases August / 2019 – May / 2020

 

All this “free” money plugged into the market has made many rich, and at a time when COVID-19 has been affecting the economy in very significant ways, Wall Street is doing its own particular August.

This vignette summarizes very well what has happened:

Is 2.3T $ a lot of money or a just a tip?

Well, I don’t know, the GDP of the US in 2019 was about 21 trillion US dollars (9 zeros).

Another important piece of information is to know the impact of the debt, where Trump is not doing so badly:

If you add Ronald Reagan, the data gets very distorted.

If you add Ronald Reagan, the data gets very distorted.

The immediate questions come to my mind are:

  • How long can the Fed be injecting this huge amount of money?
  • Is it really that much money?
  • What will happen when the numbers of POMO trades drop consistently?

More detail

The data in the green graph above where the Fed purchases in 2020 is visualized is very simple and does not tell me much. I took some time and dumped the data into a spreadsheet, and of course, you see more things.

1.- March 12 was when the serious daily injection of money began.

2.- In the first half of June there was a decrease in purchases by the FED, and it caused a correction. This correction was followed by an increase in the dose.

3.- The number of purchase packages is normally 0 or 1, between March 13 and April 7, it was always 5, 6 or 7 packages released. Then the FED spent a few days with 3-4 packages and returned to 1 package per day.

4.- If we divide the accepted quantities of purchases among the launched ones, it gives you the ratio of accepted purchases. I have also made the average of the last 5 days to see if there is something interesting. And if there is, when the average goes down, in a few days the market goes down (as it happened in June). Now at the end of July it has happened again, with what we see what happens during the first fortnight of August.

5.- On April 9th FED announced the 2.3T$ stimulus program. If we sum up the amount between March 13th, the first day with massive purchases, and August 6th, that is Today, then the total amount injected is 1,71T$, that supposes 75% of the original 2,3T$ budget announced.

Evolution during last 18 years

I have found this table published by Charlie Bilello, where he summarizes the annual changes in the Fed’s balance sheet since 2002. Take into account that 2020 is just till 22/October.

Imagen

My opinion about the POMO

This type of operation is very well known in the US. There are traders doing things with this information. For me it is something that requires data, knowledge and time that I do not have, but I always find it interesting to understand what others do, learn and understand the context where we move.

This is not, in any case, a method of saving or investing in the long term.

If there is something that I have not mentioned or is of interest, let me know!

Los mapas de Wardley

Que son los mapas de Wardley

Los mapas de Wardley es una técnica que lo ayuda a examinar un entorno dado, identificar los próximos cambios que van a ocurrir y ayuda a elegir adecuadamente las acciones a tomar. Al examinar qué se necesita, qué componentes se utilizarán, cuáles son sus dependencias y características, se puede construir una representación visual de su mundo, jugar a juegos hipotéticos y elegir su dirección y las mejores acciones para apoyarlo.

Hace poco me di cuenta que llevo usando esta técnica desde 2013 y que conozco los planteamientos básicos de su uso, pero que echo en falta dos cosas fundamentales:

  • Ahondar más en los detalles de la técnica.
  • La inexistencia de una comunidad en español que conozca los mapas de Wardley.

Con ello, me he propuesto traducir parte del contenido de los mapas de Wardley al español, para tratar de mejorar los dos puntos mencionados anteriormente.

Principios y partes de la traducción

  1. El libro, que originalmente está en publicado en medium lo trataré de traducir lo más cercana posible al original, solo adaptando situaciones personales y contenido relevante para aprender sobre esta técnica.
  2. Mapas de ejemplo, herramientas, otros recursos: documentaré algunas cosas que existen e iré añadiendo cosas conforme las vaya usando (mi falta de tiempo es un impedimento importante, ….bueno, como a todos).

Actividades (Kanban)

1.- A realizar

  1. Buscar plug-in sobre rutas o completar cursos.
  2. Buscar plugín sobre conversaciones.

2.- En progreso

  1. Creación de mapas específicos.
  2. Divulgar la página por las redes y contactos
    1. Linkedin
    2. Twitter
    3. Slack English
    4. Slack Spain

3.- Completadas

  1. Hablar con Simon acerca de llevar a cabo este proyecto (hecho).
  2. Crear un entorno donde colgar la documentación (aquí).
  3. Crear contenido y traducir el libro (aquí).
  4. Creación de mapas específicos (Apple+Epic Games, Nvidia)

Tabla de contenido del libro hasta ahora (Simon continúa escribiendo capítulos)

Recomendaciones?

Si tienes alguna recomendación sobre lo que debería hacer o mejorar, dímelo.

Year 3, Learning about Raspberry PI and Wardley Maps Q3

A change of content

I feel I need to rest of the financial investing journey I’m doing. I have been thinking about an alternative and I found out that I have a Raspberry Pi in a box that I have still not used. So for this quarter I will try to learn about what can I do with it.

A friend that is going to help me with the Raspberry told me that it will not take so much time, so I should look for other things to learn. I’m not sure about it, but let’s start with something and let’s look for another initiative, just in case.

The alternative learning thread will be focused on Wardley maps. I have used for a long time (I started with them in 2013), and I have the feeling that in the Spanish word it does not have more impact because the language is still a high barrier for some people. I have been thinking about it since some while ago: it’s to translate Wardley maps content into Spanish.

Year 3, Quarter 3

As usual these are the goals for this quarter, following the V2MOM model:

For the Raspberry Pi:

  • Vision: start using the Raspberry Pi.
  • Values: have fun, learn a lot, do practices and more practices.
  • Method: set it up, find a couple of use cases and make them work.
  • Obstacles: Time.
  • Measures:
    • Install OS on Raspberry PI.
    • To have a couple of use cases that are implemented at home: pi-hole and another one to be defined.

For the Wardley maps translation:

  • Vision: have a place with Wardley maps content in Spanish.
  • Values: have fun, learn the details of the different chapters published.
  • Method: set up a place,translate and adapt the content when required, publish some of the maps I did.
  • Obstacles: Time.
  • Measures:
    • Build a place to document about Wardley maps.
    • To have at least 5 chapters ready for publishing.
    • Complete the initial content of the website.
    • Add at least 3 maps I have done to Spanish.

Death line = 30/September/2020

Results (October, 2020)

  • Raspberry PI.
    • Install OS on Raspberry PI (not done).
    • Pi-hole up and running (not done).
    • and another one to be defined (not done).
  • Wardley maps (specific updates here (in Spanish) ).
    • Build a place to document about Wardley maps (done).
    • To have at least 5 chapters ready for publishing (done, 18 chapters completed of a total of 19).
    • Complete the initial content of the website (done).
    • Add at least 3 maps I have done to Spanish (done).

So basically I completed the Wardley Maps goal in the right way, thanks to the right focus I had on it, but I completely failed on the Raspberry PI side.

As an extra, I completed a set of training courses for renewing my PMP certification.

tradingview pine limit

I am trying to write a script on Pine (related to a Tradingview strategy) where I want to use the series and take the previous value or past values to make a set of operations.

Something as:

a = if(Alerta1[-1] == 5, 10,0)

the pine script is saved without error, but during the execution, an error is shown:

Index can’t be a negative value (-1)

Is there anybody that could let me know how to solve it?

I would like to use “[-1]” and other “minus” such “[-20]” for a script.

many thanks in advance

The answer

The answer is as simple that I’m embarrassed of not being able to see it:

https://www.tradingview.com/pine-script-docs/en/v4/language/Operators.html#history-reference-operator

Value Line Geometric Index

The american market (I focus on S&P 500) has recuperated 40% of the value since March where it touch the minimum value.

It’s an impressive “come back” while the macro economy data is showing terrible numbers about unemployment, consumption, industrial production….

The economy and the market are driving themselves in the opposite direction. So, so many questions come to my mind:

  • Is the market crazy?
  • is the market completely disconnected from the economy?
  • are we looking at the right numbers?

Well, Mr. Market does what he wants, and we cannot do anything about it. Disconnected from the economy? I do not think so, maybe there is a bubble, but sooner or later it will adjust. Well, my answers are poor, and it’s basically because I have not a concrete answer to these questions.

The last question: “are we looking at the right numbers?” makes me to go to Value Line Geometric Index

Value Line Geometric Index

This index includes all the american market. For more information the Wikipedia.

“All companies in the Value Line Composite Index are publicly listed on one of the major exchanges listed below. The number of companies in the Value Line Composite Index fluctuates based on factors including: the addition or delisting of the companies on the exchanges themselves, mergers, acquisitions, bankruptcies, and the coverage decisions made by Value Line for the Value Line Composite Index. Value Line’s decisions as to which companies to include are undertaken with the intention to create a broad representation of the North American equity market.

Exchanges in The Value Line Composite Index are:

  • American Stock Exchange
  • NASDAQ
  • New York Stock Exchange
  • Toronto Stock Exchange

Well, comparing the VALUG (blue) with SPX (red), you can see that Value Line Geometric Index is more closed to the reality that I had in mind that is that we still have not recuperated.

If we look the comparison of the indexes from February 12th, the result is that draw-down is bigger for VALUG, and that the recuperation is below than S&P:

Update on 07/August/2020

  1. The Value line has crossed over the 200 days SMA for the second time. This is an interesting point of intersection.
  2. This event happened in June and the market reacted for few days. These days the FED did not use big amount of money on POMO.

To do: I will add this index to my reviews, I have first to learn from it.

Spanish market issue: script dividend as extended policy

One of the big issues of the stock market in Spain is the one represented in this picture.

Dividends? No, “papers”

Some of the popular investment methods is based on dividends, some others at least recognize that dividends is an incentive to invest on a company.

The main companies in the IBEX-35 market, so many times, instead of cutting the dividend or ask for money to the market, they have created a mechanism to do two things at the same time: script dividend.

They define a process with different steps that you have to follow. Mainly there are 2 options:

  • you grab the dividends and run.
  • you grab a set of new stocks (a new amount of stocks published to inject extra money into the company).

The process to do it

Once that is declared the “script dividend” you have to learn how to go through the process of claiming the new stocks or to take the dividend itself. This process is not straight forward, it’s a very complex process that requires you time to understand it, and then you have to pay attention the key days where you have to make a decision.

In a nutshell, so many small investors fall in the trap and they capture more stocks that they really do not want, diluting the value of the company.

My opinion

is that an incentive turns into an obligation to the investor, making him to decide on something that is not initially their responsibility. The result in the long term is not working well for the companies that are following this policy.

 

 

 

Design Thinking Process

A process cycle based in a 5 stages:

  • Empathize
  • Define
  • Ideate
  • Prototype
  • Test

Empathize

Objective:

  • Understand customers’ needs
  • Deep insight into what they need and expect from the solution/product

Activities

  • Engage with stakeholders
  • Use innovative methods to collect information
  • Understand the problem/need
  • Record observation to answer what, how, and why

Guidelines to follow:

  • Adopt appropriate method to gather relevant information
  • Engage stakeholders positively
  • Experience the problem to understand the impact

Define

Objective:

  • To create a well-defined and meaningful problem statement to focus on

Activities

  • Information analysis
  • Collaborating observations that help define the core problem
  • Provide clarity and scope to the problem

Guidelines to follow:

  • Focus on the positive aspects of the customers’ needs
  • Eliminate negative aspects identified in their needs
  • Identify connectivity between problems by identifying similar context
  • Break down the problems into sub-problems
  • Define each problem to create meaningful problem statement

Ideate

Objective:

  • To generate and define multiple ideas

Activities:

  • Collect as many ideas as possible
  • Think, think, think…
  • Brainstorming
  • Use tools like charting, mind maps, boards
  • Gather all solutions suggested by the team of thinkers

Guidelines to follow:

  • Don’t get into details, feasibility, and viability during this phase
  • Don’t evaluate ideas
  • Focus on generating ideas
  • Always create visualization of ideas

Prototype

Objective:

  • To testify an idea
    • Verifies whether an implemented solution is successful
    • Identify further problems with the implemented idea to refine
  • Gathering feedback from the users about their experiences with the product

Activities:

  • Identify the type of prototype needed to illustrate the ideas
  • Capture all the key aspects of the idea and solution with the prototypes

Guidelines to follow:

  • Don’t spend too much time on the prototype always build prototypes with the intended users in mind
  • Checking feasibility and collecting feedback is the primary objective of prototypes.
  • Don’t focus on internal problems

Types of prototypes:

  • Basic prototype model: provide limited tested features, it’s inexpensive, may not be useful for some cases, you will get limited feedback.
  • Operational prototype model: operates like finished products, they are expensive, users can visualize how they will operate, you will get deep feedback.

Test

Objective:

  • Return to your users and test the prototype for obtaining feedback

Activities:

  • Engage with stakeholders
  • Understand if the needs are covered
  • Collect as much feedback as possible

Guidelines to follow:

  • Focus on assertive and defined feedback
  • structure the test activities with the user stories.
  • explain what was implemented and not implemented in the prototype (set expectations)
  • Don’t focus on internal problems