Issue #1 - 5 stocks, Motivation, NoSQL and a Growth Opportunity
Hey, I need to start by saying a huge ‘thank you’ for signing up to my newsletter.
When I decided to have a go at writing a newsletter I wasn’t sure if anyone would sign up - but you did, and I can’t express how much I appreciate that.
This is my first newsletter ever, and I’ll work on the content as we go.
For this week I have written about…
Finance - applied the Sharpe Ratio and discussed 5 stocks
MBA - talked about motivation and introduced a concept
Data Science - touched on my experience with NoSQL
Personal Growth - linked to a very low-cost course
Finance
For this first iteration of the newsletter, I have done some calculations on stock data from the S&P 500. In short, I calculated the Sharpe Ratio for 500 shares and had a quick look, this is what I found. (Also, there is a nice tutorial if you want to have a go using Excel [link])
Of the top 20 shares with the highest Sharpe ratios, 9 companies were from the energy sector which isn’t surprising due to the ongoing concerns and media coverage around the energy crisis. The FT reported that they expect the energy crisis to go on for several years [link] with the IEA stating that the crisis is caused by disruptions to the supply chain, weather, low investment, and Russia’s invasion of Ukraine [link].
When looking at companies with the highest Sharpe ratio which are not in the energy sector we can filter the data to show high Sharpe ratios and also high ‘1-year targets’ (based on analyst data from Yahoo Finance).
As shown in the image, UnitedHealth Group Incorporated is expected to increase from $523 to around $590 (+14%) based on 22 analysts. Iron Mountain Incorporated is expected to increase from $52 to between $55 and $60 (up to +13%). Analysts are showing these stocks as ‘buy’ along with also CF Industries Holdings, Inc., W. R. Berkley Corporation, and General Dynamics Corporation. All of these shares had high Sharpe ratios.
Remember - this is not financial advice - just a data scientist who looked at some data.
MBA Bitesize
Maslow’s Hierarchy of Needs - I was first introduced to this on a business course around 22 years ago (I’m getting old). It didn’t mean much to me back then. I knew of its existence since that point but it didn’t really hit home until I was reintroduced to the concept while studying towards my MBA.
In short, the ‘model’ shows five levels starting at the bottom with the physiological needs, then moving up multiple stages/levels up to self-actualization. The concept is that like a pyramid you must build and be secure at the lower levels before you can move up to the next one.
One example is - you can’t focus or attain a sense of connection with family and friends if you are not able to breathe. Makes sense right?
So why is this relevant to the MBA? Or to Business? Or leadership? - the simple answer is that it is a model which can describe what motivates people. Lori Goler, et al talk about the higher levels stating that people want Career, Community, and Cause above all things (at work) [link]. However, look at what’s happened in Big Tech recently - 11,000 redundancies at Meta, 3.5k at Twitter, plus many more - are people really focused on Career, Community, and Cause (which are higher levels of the pyramid)? Or are they focused on things like - will I be able to pay my rent/mortgage? What will happen to my healthcare coverage?
And while the answers might be obvious for those who have been made redundant, it could still be of concern to those who remained - are they worried about their basic needs being at risk?
Just one example of how understanding Maslow’s Hierarchy of Needs and how things influence people.
There’s a more detailed writeup here by Simply Psychology
Data Science
I’ve spent the last 20 years working with data and databases, more specifically relational databases. I even taught database development for a short while including the whole - what is normalisation, the work of Codd (1970) and getting students to develop a database to third normal form [link]
I now do normalisation without even thinking about it - not saying I’m great at it, but it’s pretty efficient.
So every time I’ve looked across at NoSQL databases they just frustrate me - it seems to be the exact opposite of how my brain thinks about storing data.
But recently I’ve been forced into using NoSQL for a personal project I am working on (I’ll share more soon). In short, I had two options - create my own backend for my project OR use Firebase including Firestore.
My few takeaways and lessons so far…
No tables, instead it’s just a huge document repository with everything in each document (JSON style)
Firestore has a 1mb document size limit so you can’t put everything in
Firestore has 50k document reads per day (on Free Tier) which might not go as far as you’d expect
Documents can include arrays - which have been pretty useful
Querying seems easier in SQL -and maybe I’m wrong but it seems like you can’t do a WHERE and SORT on 2 different fields (i.e WHERE name = ‘bob’ ORDER BY age) [maybe I missed something]
You really have to plan your data and storage structure carefully to minimise document reads (no joining of records)
The transition from SQL to NoSQL isn’t as straightforward as I would have expected - but once you get there it’s pretty good.
I’d love to see a good example of Twitter or Instgram done with NoSQL - the ones I’ve seen don’t seem to scale very well. I’m sure you can do it - I’d just like to see the examples.
More recently (today) I installed MongoDB and used it to store my financial data and some analysis (used earlier in this newsletter). To be fair it was a smooth process, and you can use MongoDB Compass as a GUI.
Anyways, to the point of NoSQL as a Data Scientist - none of my previous companies have used NoSQL - everything has been SQL, and the flavour is often MySQL (some MSSQL or Oracle). For large offline data, I have typically used HIVE and PrestoDB.
So you can probably get away with not learning NoSQL but at the same time, it might be a good opportunity to learn something new.
Personal Growth
This guy is running a course for $1 (discounted until 29th Nov 2022).
I don’t know if it’s any good, but it’s $1 - so I bought it and put it on my list of things to do.
TBH - I had a quick look at the content and it prompted me to start a newsletter (you’re reading it) - so I’ve had my $1 worth already.
I’ve followed Noah for a while now, mainly for 2 reasons…
He seems to be doing alright and I like his content and style.
But most importantly, he looks and sounds like my old judo-throwing buddy from back home.
Final thoughts
If you open up this email and read parts of it, I’d like to thank you so much and I really hope it has given some value to you.
For me, it took a lot longer than I had planned and I had planned on having more sections, but time and space limited that - so I need to work on that.
Feel free to reach out to me and offer any suggestions - probably LinkedIn is best.
Wishing everyone a great weekend.