Howdy all,
Have finally had some time on my hands so have started setting up a new Kriece Music and Production Website which will include -
- production tips
- free downloads
- loops & presets
- other random musings
It is still a work in progress but check it out -
For those who have been messaging me asking where you can buy the track which plays in the background on this page, it is now up here on Itunes –
http://itunes.apple.com/au/album/toothpaste-ninja/id441340960?i=441341068
It is still also available on Beatport (www.beatport.com)
Hey Guys,
I have finally got around to setting up my artist & record label pages here -
http://www.facebook.com/pages/Kriece/15099440441?sk=app_178091127385
http://www.facebook.com/pages/Kindred-Sounds-Label-Group/132863680123999?sk=app_178091127385
Make sure you ‘like’ so it gives the deceptive appearance of some semblance of popularity
Have been a bit busy lately to update so thought I would at least keep the ball rolling by putting up some links to some funny sites I have been digging –
Perhaps the greatest example of man’s ability to deceive himself and not act in a rational manner lies in the world of Investing and Trading (stocks, derivatives, commodities etc – not physical trade).
This topic has been extensively covered by Nassim Nicholas Taleb in his books The Black Swan and Fooled by Randomness so there is no need to go over old ground – rather, I wish to add my own perspective based on experience.
I have been conducting various experiments across different fields over the last year or so and it is my intention to illustrate some of the more interesting findings on this blog. However the one which has undoubtedly consumed the most time has been my experiments in Share & CFD Trading.
Firstly, let me look at the controversial issue of Technical trading – that is, using various technical indicators to guide aspects of trading such as when to buy or sell and the correct position size.
Over the last year I have obsessively dedicated myself to studying various aspects of technical indicators and trading strategies such as Bollinger Bands, Stochastics, RSI, Trend Following, Parabolic SAR etc (to LITERALLY name but a few).
On the surface, the concepts extolled by technical trading are rather seductive on a logical/rational level. For example, the gold standard advice given to all “cut your losses short and let your profits run”. So you may reach the following conclusion (as I did) – assuming only a 50/50 ratio of picking the right direction in your trades, if you quickly exit your losing trades, your winning trades will be larger – therefore negating the need to be “right” more than 50% of the time. What I didn’t realise at first was this did not take into account the probability of hitting a relatively tight stop-loss versus hitting a much wider profit target.
So what happened in practice for me? My losing trades would get stopped out and my winning trades would reverse before hitting my profit target (based on technical levels). I had to QUICKLY end this strategy as I was in danger of blowing up just weeks into this experiment. Naturally, many readers familiar with this area will claim I placed my stops at inappropriate levels. However, these stop levels were also placed based on technical indicators.
So I changed my strategy to one which goes completely against all advice – I cut my winners short and let my losses run (in the hope of them reversing to a profitable position). Amazingly, this proved to be quite profitable (especially in comparison to the gold standard strategy I tried initially). There have been surprisingly few trades that I got wrong and continued to go against me (risking a massive loss).
However, when all is said and done, after a year of basing trades on my own analysis and taking the advice of various respected technical traders, I have yet to see anything which appears to significantly improve the probability of success.
More interestingly however, when I went through all my trades I found something extremely interesting which further supports the hypotheses of Nassim Nicholas Taleb. Over the course of a year, my trading result was predominantly determined by Black Swan-type events – that is, unpredicatable events which are impervious to technical analysis.
Let me give a few examples -
1. CSL – recently, CSL started a nice uptrend, looking attractive from various technical aspects. The day after going long CSL, their US competitor, Baxter, announced a profit downgrade. On the same day there was also media reports of adverse reactions to a Flu Vaccine they had developed. Two days after going long, they are down 10%. This is my second slaughtering at the hands of CSL – I was long CSL when their US takeover of Talecris was blocked.
2. Worley Parsons – I thought this company were looking a little overbought so I went short. The very next day they announced a profit downgrade, making me a nice (lucky) profit.
3. Dubai Debt – the day the potential Dubai (World) default issue broke was my biggest trading day – big profits on my short positions and big losses on my long positions
4. Telstra – had a big long position the day the government announced tough conditions regarding the NBN. They subsequently dropped around 15%
I could go on and on.
The fact that became blindingly obvious is that my trading has been 95% driven by Black Swan type events. That is, unpredictable events impervious to any kind of technical analysis.
I realised that I had been blinded by a kind of positive bias I had formed in my head. There is no better feeling than, for example, buying at ‘support’ and selling at ‘resistance’ – utilising various technical indicators to drive decision making. The feeling of perceived control over events that this gives is intoxicating.
Before you write to me telling me why I am wrong and why technical indicators work, please let me clarify that this is simply the conclusions I drew from my own experimentation. The great flaw in a single experiment is the tendency to believe in the results of the experiment as it is your own personal experience. For example, by pure chance (or, if you believe in technical indicators, by superior technical skills) I may have had all my trades conform to my expectations formed by technical analysis. If that had happened, I would no doubt be explaining the virtues of technical analysis.
As with most aspects of trading and investing, there is an (un)healthy dose of survivorship bias as work. “Person x” was able to make millions using their secret combination of technical indicators and now they are willing to sell it to you via a course or a book. You don’t see the other x% of people who have found the market to be unpredictable and either blew up their account or gave up. As mentioned above, if you happened to be one of the people who made money using technical indicators you will passionately spring to its defense.
I guess my point (yes I do have one!) is that all the indicators can point one way but mean squat if Nigerian Rebels decide to bomb an oil pipeline or someone decides to hijack a plane. There can be certain circumstances where technical indicators must surely help (especially simple ones like support and resistance or trendlines), but to base any trading strategy on the predictive ability of them would be folly in my opinion.
Recommended Reading -
Unfortunately due to massive amounts of comment spam I am disabling comments for the meantime.
Today I would like to get a little controversial and highlight something that I have found quite worrying.
A few years ago I saw something on TV which got me thinking a lot about the Global Warming debate. It was an interview with Danish writer Bjorn Lomborg on the subject of Climate Change with an open panel format to encourage debate.
Bjorn Lomborg is the author of The Skeptical Environmentalist and was probably the first example of what are now known as “climate sceptics” – that is, those who argue against the man-made global warming theory. Lomborg’s position has long been that the funding which is allocated to solving global warming should be diverted to proven, tangible humanitarian and health issues such as malnutrition and disease in third world countries
In this particular debate/interview, Lomborg gave his views on why he did not support the idea of man-made global warming. He was subsequently painted as the anti-Christ by other panellists and audience members in what struck me as an extraordinarily emotive evisceration. The general theme of his attackers on this show was “if you deny climate change your are in the pocket of big-oil” or “climate sceptics are going to destroy the earth”.
I was quite bothered by this and have thought about it ever since – particularly when I see ‘climate sceptics’ mentioned in the media. The thing that worried me is – if there is a debate about a particular issue and one of the sides of the debate is labelled ‘morally wrong’ for having that opinion, how rigorous can the debate be and how accurate can the opinions formed out of this debate be?
So you are probably wondering what my personal take on climate change is? Well, I think the earth definitely appears to be warming at the moment – but is it a result of man or just part of natural long-terms fluctuations in weather? I haven’t got the slightest clue! I have read arguments on both sides of the debate which I have found equally compelling. Either hypotheses could be proven tomorrow and I would not be shocked.
However, as you would have probably also surmised, if I was forced to take a stab, I would probably side on the sceptic side. The main reason being, like with Bjorn Lomborg, if you publicly announce yourself to be a climate sceptic, you are labelled ‘anti-environment’ or painted as a fringe-dwelling nutcase. Hell, even the fact that the expression ‘climate sceptic’ has become a pejorative should set off alarm bells for any free thinking person.
The thing I find most fascinating about the state of affairs is that, whenever the subject of global warming has come up with people I have met, the majority indicate that they are ‘climate sceptics’. However, based on the coverage of climate change in the media, you would assume that the public has reached a consensus that man made global warming is a reality. Naturally, my sample size is too small to claim any statistical significance however it never fails to intrigue me how private opinions differ from what is taken as public consensus.
As a side note, the other reason which makes me nervous about the global warming ‘industry’ is that we have to rely on interpretations of complex data and modelling by those people whose very livelihood depends on the perpetuation of the ‘global warming’ problem.
Despite all this, some fantastic stuff has come out of the general fear surrounding global warming. Many of the tangible things people have begun doing at an individual level – such as – conserving electricity, reducing gasoline usage, planting trees, cleaning air etc – as a result of this, are tangibly beneficial for the human race – irrespective of whether man made global warming is proven correct or otherwise.
So, whats the link between Global Warming, GM Food and Big Pharma?
The debate around GM Food and the actions of Big Pharma are eerily similar to the global warming debate.
GM Food (particularly the prime promoter of GM Food – Monsanto) and Pharmaceutical companies have been painted as ‘evil’. However, like anything in life, I think the truth is not so black and white.
Lets start with GM Food. Firstly I will declare my personal opinion. I think there are some major question marks over SOME GM Foods – particularly I think more research needs to be done on the rise of food allergies (which are mainly triggered by proteins in certain foods – with proteins being the storehouse of DNA among other things). Furthermore, companies like Monsanto are clearly forcing GM food on to the public without any particular concern for potential negative consequences.
But are GM foods all bad? I am not so sure. For example I have SERIOUS doubts about the potential hazards which have been attributed to GM Canola/Rapeseed. As several plant genetics Phd’s have pointed out to me, there is no DNA in the oil component.
I think there may also be fantastic potential benefits for third-world countries if particular drought and herbicide-tolerant crops are developed.
However, the problem I have with the anti-GM debate is that, like global warming, it has lost focus on science and has now become a simplistic equation – GM Food = Evil.
Taken to an extreme, I worry that one day GM Food may be outlawed based on emotive, rather than scientific reasons – potentially robbing third-world countries of a vital instrument to improve cropping yields.
Likewise, Pharmaceutical Companies are now simplistically lumped into the ‘evil’ category. Also, like Monsanto, much of the bad reputation enjoyed by Big Pharma is of their own creation.
The actions of Big Pharma have been, on regular occasion, nothing short of deplorable. I would need pages and pages here just to outline some of the morally bankrupt actions of Big Pharma.
But viewed against a backdrop of the net effect which various medicines have had on society, it is difficult to stick to the default position that Big Pharma is simply ‘evil’.
Yes, Big Pharma develops medicines with only profit in mind and it would be disingenuous for them to claim otherwise. However, this is one of the strong points of capitalism – the quest for dollars is a powerful advancer of civilisations. The lust for profits by Big Pharma has resulted in the development of medicines such as – chemotherapy drugs, statins, anti-cholesterol drugs, anti-depressants, pain relieving drugs and the like which have saved countless numbers of lives.
This is why I get angry when I stumble on some random site telling people to avoid chemo drugs or anti-depressants and instead rely on Bach Flower Essences or Homeopathy (or some other equally ‘placebo-controlled trial’ resistant hocus pocus).
Like climate change sceptics, one of the common themes I see on the internet is that if you express a pro-pharmaceuticals or pro-GM opinion, you are painted as being ‘evil’. The one which particularly gets me is when someone expresses a pro-GM or pro-pharmaceutical opinion they are accused of being employees of Monsanto or Pfizer or paid by them to post positive opinions. This is not the stuff of healthy debate.
When opinions are categorised as morally ‘right’ or ‘wrong’, the resultant suffocation of healthy debate is not a particularly fertile breeding ground for free thinking.
Please feel free to express your own opinions in the comments section 
Without a doubt, the key definining topic of Electronic Dance Music (EDM) over the last few years
has been the dramatic plunge in income earned by EDM producers. The prime culprit is invariably identified as being the spread of illegal downloads and file sharing. Whilst I believe this is definitely a major factor, there is another key driver which is rarely mentioned. That is, EDM, along with many other types of entertainment, has become a classic “Long Tail” market.
Firstly, what is a “Long Tail“?
“Long Tail” is a kind of statistical distribution for a given variable. The type of statistical distribution you may be most familiar with is Normal Distribution or The Bell Curve -
A typical Bell Curve model would be the average weight of human males. There would be a few Gandhi-like wraiths in the sub-50kg category, a few “Its my metabolism, not the 10 Snickers Bars I eat each day” in the 120kg+ category, with the remainder concentrated around 70-90kg.
Whereas a Long Tail looks more like this -
The “Long Tail” concept has been popularised by Chris Anderson’s fantastic books The Long Tail and the updated version The Longer Long Tail. (The Long Tail: Why the Future of Business is Selling Less of More
)
So what characterises a “Long Tail” market? The perfect example is today’s music industry. In the ‘olden days’ (up until, say 2000-2001), the majority of all sales were concentrated in the head of the graph. You basically had albums by Michael Jackson, Madonna, Britney Spears etc and then the graph fell away dramatically to virtually nothing. The market was essentially defined by a retailer’s inclination to stock or not stock a particular release. As much as “The Best of Kriece Volume 1” is punctuated by understated, timeless, perhaps paradigm-changing production flourishes, it would have been highly unlikely to ever be stocked in Walmart.
Nowdays, the head of the graph is still dominated by the big names, however due to the exponential increase in choice available to the consumer, the graph has flattened and elongated – to reflect the consumer’s ability to access previously obscure genres and titles. In simple terms, in a Long Tail market, Britney sells say, for argument’s sake, 40% less units than previously and that 40% is re-allocated to, say, 10,000 different artists making obscure genres such as Bolshevik Anti-matter Death Chillout or equivalent.
Why has this happened? One reason – the internet. The distribution of music over the internet via Itunes, Beatport etc has dramatically reduced distribution costs. There is virtually no additional cost (hard drives, servers & bandwidth aside), for Itunes to stock such obscure gems as “The Best of Kriece Volume 1” (a cracking listen by the way – get your copy now!). In the past, the retailer or wholesaler needed to have confidence that they could shift the CDs or vinyl produced before they would commit working capital or shelf space to a particular piece of music.
Due to two key reasons, EDM has become a classic “Long Tail” market. These reasons are -
1. The change in performance/listening media from Vinyl & CDs to mp3′s – Distribution
2. The democratisation of music production - Production
Traditionally, DJs used vinyl as their preferred medium. A producer or a label wishing to release music would have to get a minimum number of copies pressed at a vinyl pressing plant at considerable expense. There would have to be a degree of comfort that you would be able to shift all the units produced. Vinyl was (and still is) expensive to make, expensive to transport, expensive to stock at a retail level, expensive to buy for djs, heavy to cart around – but sounded great!
With the advent of the internet came the gradual shift from vinyl to cds to now, where mp3 format dominates distribution. The most relevant result of this for this discussion has been the deluge of release quantity now that the barriers to physical production and distribution have been removed. In the past, an EDM artist or label had to chose carefully which tracks to release due to the cost of production. Now that there are virtually no additional costs involved (aside from promotional expenses), there is no incentive for artists to sit on their “b-side” material. As long as the material is not so bad as to negatively impact the ‘brand’ built up by the artist, there is minimal harm in releasing borderline material. If the artist believes that the material will have a negative impact on their ‘brand’ they can simply release it under an alias.
The net effect of this has been (all other things equal) the spreading of available EDM-buying dollars across a massively larger pool of possible individual track purchases. For example – a middle of the road (neither a massive hit or a stinker) Progressive or Tech-house vinyl release averaged around 4000-5000 units about 8-10 years ago. In my experience, nowdays the average release (say 3-4 tracks on average) in the same genre would total about 200-300 (mp3) units across all outlets. Whereas 10 years ago my DJ friends and I would all buy a reasonably similar range of releases each month (save for the odd obscurity picked up overseas at a small record shop), nowdays near-infinite choice has seen dj’s disappear into the Long Tail, sifting through pages and pages of mp3 releases, resulting in highly disparate music purchase choices.
Unfortunately (or fortunately depending on your point of view), this phenomenon has been further compounded by changes in EDM production and composition.
Until about 8-10 years ago, EDM production was an expensive business. It required racks of gear such as synthesizers, compressors, eqs etc. Furthermore this gear was often difficult to learn to use without hands-on tutilage. This created a huge barrier to entry for new producers, keeping the active pool of producers in any given genre reasonably limited. This, along with the costs of releasing material, meant that if you had the means and aptitude to acquire and master production gear and release vinyl, you stood a strong chance of being able to make a modestly lucrative living.
However this all changed with the popularisation of computer-based production. Today it is possible to create music from initial concept through to production of a master recording, all in the average home computer. Being computer-based, naturally the programs are also able to be cracked (pirated) – resulting in the potential to make music for no upfront cost (assuming the computer as a sunk-cost). This put bedroom producers in third-world (and first-world) countries who were previously excluded from EDM production due to the high cost, on a virtually equal footing alongside established players with expensive, cutting-edge gear.
So the net-effect of all this has been an increase in the quantity of music released by each producer along with a massive increase in the pool of producers releasing music.
Accordingly, the ultimate effect (and the key point of this article), has been the demise of EDM production as a viable vocation. The “Long Tail” is so long that it is becoming increasingly unlikely that someone can earn a decent living from releasing music. Many producers have adapted and adjusted their model to rely more and more on performing to make up the difference. However it could be said that the majority simply move on to reliable, stable, 9-5 employment. From a personal perspective the most disappointing aspect of this has been the disappearance of my favourite producers who could no longer make a living out of dance music production.
As mentioned earlier, this would be bad enough without the ever-looming spectre of piracy. EDM piracy is a perfect example of classic Buddhist “Karma” in effect (ie – the law of cause and effect, rather than the cliched “Hippy Karma” involving some magic universal leveling force). If enough fans of “Producer X” decide to steal, rather than pay for his/her tracks, there is a strong chance that “Producer X” will not be able to continue producing music for a living and decide to do something more lucrative, such as street busking for example.
So is piracy a complete negative for producers? Strangely, I don’t think so. There are some positives. Let me give an example. A few years ago I was flown to Paraguay for a DJ gig during a South American tour. Over dinner, one of the people present told me he was a big fan of my music. In a moment of refreshing candour, he indicated sheepishly that he couldnt afford to buy my music so he downloaded illegal copies. This did not bother me for two reasons. Firstly, in countries such as Paraguay, it is simply not possible for the average person to spend US$1-2 to download a track. Secondly, it could be said that one of the reasons I was invited to Paraguay was that enough people had (most likely illegally) downloaded my music to create the critical mass to justify bringing me to the country to DJ.
I am very curious as to how the EDM distribution and monetisation model will evolve from here. My own feeling is that sources of income for producers which are not tied to a single music purchase will develop. For example, a monthly subscription to a particular artist or label which confers certain exclusive benefits (such as unreleased music, dj sets, merchandise) may become one of the new ways producers eek out a living.
As this is a complex topic I have not attempted to cover all key issues. As this issue evolves I intend to eleborate on this initial article. Please feel free to add your own comments or correct any factual errors.
This article has been heavily influenced by several books, particularly Chris Anderson’s The Long Tail. You can also check out his fantastic blog (which I only stumbled upon yesterday actually!) – www.thelongtail.com
Recommended Reading –
Japanese Business Etiquette
Today’s seemingly random topic is the minefield that is Japanese Business Etiquette. It is one of the areas which can reduce a confident Western businessman to a bumbling mess. I always get asked this so I thought I would put it up for those who are interested. For those who are not, just file under “useless”.
* these expressions to be used judiciously and in the correct context
As many of you may know, I spent the better part of 2006 and 2007 touring the world doing DJ gigs.
Periods of extended laziness were occasionally punctuated by bursts of industriousness, resulting in the creation of a travel blog to document some of my experiences.
In retrospect I wish I had done some more – there are whole chunks missing like Argentina, Brazil, Paraguay, UK etc. I think the memories will be a little too hazy and inexact to try to do them retrospectively now.
Here is the link if you are interested in a rollicking, page turning (or ‘page down’ button inducing for Gen Y readers) read.
