“Any sufficiently advanced technology is indistinguishable from magic.” – bestselling science fiction writer and futurist Arthur C. Clarke
To some, the work of Meraglim might seem like magic. By using predictive financial data analytics software, this cutting edge company aims to improve investor performance in complex financial markets, which is a quantum leap forward for a field that until recently, was stuck in the dark ages. Meraglim founder and CEO Kevin W. Massengill likens this transformation to what happened with alchemy in the 1500s.
“Five hundred years ago, alchemy was the science of the day,” Massengill said. “There was a vast body of knowledge around this subject, but it was all wrong. The people who devoted their lives to this subject didn’t know that – they thought they were right. When the thermometer was invented, everything began to change. With the ability to take measurements, alchemy began to morph into chemistry and metallurgy. The alchemists weren’t stupid people; their models were just wrong.”
In Massengill’s mind, what happened with alchemy is the perfect metaphor for what’s happening with modern economics. Educated people rely on textbooks loaded with elegant equations, but anybody who knows anything about Austrian economics, for example, knows those equations are often times antiquated and irrelevant.
Massengill’s company, Meraglim, doesn’t rely on textbooks. It obtains data from IBM Watson, which can read 9 million books, articles or transcripts a day. Compare this with the average financial analyst who would most certainly feel overwhelmed with hundreds of headlines on their Bloomberg terminal each morning, and it’s easy to see the advantage of supercomputing when it comes to data analysis.
“We’re not God,” Massengill admitted. “It’s too much depth. How can analysts be expected to open those headlines up, figure out which ones matter, and integrate what happened with everything else that’s occurred and what they already know?”
The future of data analysis
That’s where a system like Meraglim’s RAVEN comes into play. With RAVEN, an analyst can map out the nodes that matter to them and task Watson with evaluating the world’s inputs to each of those nodes and updating them in real time. This makes the financial analyst’s morning routine look far different than it does now.
Let’s say you are an analyst and you worry about a potential Chinese yuan devaluation. When you arrive at the office on a Monday morning, you ask: “RAVEN, what happened over the weekend?”
RAVEN, which has been optimized for the nodes you selected, would respond: “Of the four things you're tracking, two had notable impacts that we judge to be significant. Would you like to hear them?” You’d say “yes” and RAVEN would continue: “Deputy central bank governor gave a speech in Beijing. We judged it supportive of the thesis. Would you like to hear the text?” If you want to hear it, RAVEN would read it to you.
Massengill says that even if you disagree with RAVEN’s analysis of the data and what it means for Chinese yuan devaluation, you’ll still have better real-time intelligence at your fingertips than you’ve ever had before. Even if you had 100 analysts working for you, there’s too much data for humans to sift through. Using predictive analytics allows investors to make smarter decisions and improve their performance in global markets.
Threats and predictions for 2018
So here’s the million dollar question in all of our minds -- with that kind of computing power, what does Massengill and his team at Meraglim see on the horizon for 2018? To start, he advises anyone in cryptocurrency to get out.
“There will be some winners, but it will take time to figure out who that’s going to be,” Massengill shared. “Bitcoin absolutely won’t produce winners because it’s a flawed technology platform. Bitcoin is the Neanderthal in this game—they’re already dead.”
In Massengill’s opinion, income-producing assets such as real estate are still safe bets. What will get wiped away are tertiary assets, paper assets, 401Ks and anything else tied to fiat currency. Governments, Massengill argues, will destroy their debt obligations by destroying their currency. They don’t want to destroy the life savings of all their pensioners, but sadly they won’t have a choice.
“My co-founder, James [Jim] G. Rickard, would say to have at least 10% of your assets in hard assets like gold and silver,” Massengill shared. “I’m closer to 80%. The other 20% you can reserve for the most high-flying speculations you can find. I’d tell investors to stay away from tertiary assets. That’s what gets wiped away when storms come.”
Massengill also advises people to keep a box of silver in the house in case they find themselves in a situation like what happened in Puerto Rico after the hurricane they recently suffered. The people there can’t buy or sell because they don’t have electricity, but with a box of silver, they can keep their family alive. If you need funds to buy silver, get them from your Bitcoin investment.
“Bitcoin is a Ponzi and a fraud and a bubble all at the same time,” Massengill posits. “That is not going to end well for folks. So, if you’ve got some assets in it, get them out and get a chunk of your assets into primary wealth: gold and silver bullion or agriculture or multi-family apartment complexes, things that will spin off revenue for you.”
