How behaviors are disrupting markets and #PriceDiscovery. Why Middlemen and experts are being disintermediated, expertise #Unbundled

1. https://www.cbinsights.com/research/disrupting-banking-fintech-startups/
#Experts are being #Disintermediated, Expertise #Unbundled
Disrupting Banking: The Fintech Startups That Are
Unbundling Wells Fargo, Citi and Bank of America

2. https://www.ft.com/content/e139d940-977d-11e6-a1dc-bdf38d484582
https://www.cnbc.com/2017/04/12/bad-times-for-active-managers-almost-
none-have-beaten-the-market-over-the-past-15-years.html
http://finance.wharton.upenn.edu/~vglode/WMFU.pdf
#Predictably Irrational Behaviors – 99% of funds Behaviors loose money!

3. In 2007, legendary investor Warren
Buffett made a $1 million bet against
Protégé Partners that hedge funds wouldn't
outperform an S&P index fund, and he won.
Buffett's choice fund, the Vanguard 500
Index Fund Admiral Shares, returned 7.1
percent compounded annually, while the
basket of hedge funds his competitor chose
returned an average of only 2.2 percent, the
Wall Street Journal reports.
https://www.ft.com/content/4594f554-ba1a-11e7-9bfb-4a9c83ffa852 https://www.ishares.com/us/literature/whitepaper/four-
big-trends-to-drive-etf-growth-may-2018-en-us.pdf
https://www.cnbc.com/2018/01/03/why-warren-buffett-says-index-funds-are-
the-best-investment.html
#Passive or #IndexInvesting Behavior growing, growing, growing,…

4. https://www.ft.com/content/4594f554-ba1a-11e7-9bfb-4a9c83ffa852 https://www.cbinsights.com/research/robo-advisor-global-
fintech-map/
https://www.ishares.com/us/literature/whitepaper/four-big-trends-to-drive-
etf-growth-may-2018-en-us.pdf
#Algorithms driving new Behaviors, new Business models
Jamie Dimon: Silicon Valley startups are
coming to eat Wall Street's lunch
A Wealth Tech World: Mapping Robo-
Advisors Around The Globe
•April 21, 2017

5. https://www.moneycontrol.com/ https://www.cbinsights.com/research/robo-advisor-global-
fintech-map/
https://www.macrotrends.net/1358/dow-jones-industrial-average-last-10-years
#Values across the board not based on #Fundamentals
Dow Jones - 10 YearDaily Chart P/E Ratios By Country
Sep. 5, 2017

6. https://yourstory.com/2017/02/no
bel-laureate-eugene-fama/
https://www.theguardian.com/world/2017/oct/11/richard-thaler-
nobel-prize-winner-behavioural-economics
https://www.marketwatch.com/story/robert-shiller-passive-investing-is-a-
pseudoscience-and-its-bad-for-markets-2017-11-14
#Nobel prize winners, what are #RationalBehaviors
Robert Shiller: Passive investing is a
‘pseudoscience’ andit’s badfor
markets
Nov 15, 2017
Richard Thaler is a controversial Nobel
prize winner – but a deserving one
Robert Shiller
Oct 2017
The winning investment strategy
according to Nobel Laureate, Eugene
Fama, 14th February 2017
Fama is always seen scoffing at active
managers – “I’dcomparestockpickers
to astrologers but Idon’t want to bad
mouth astrologers”

7. https://charlesduhigg.com/the-power-of-habit/ https://www.amazon.com/The-Clash-Cultures-Investment-Speculation/http://danariely.com/books/predictably-irrational/
#PredictablyIrrational and #BoundedRationality are clear signals
Misguided behaviors are neither
random norsenseless. They're
systematic and predictable—making us
predictably irrational.
Recommended Reading by Warren
Buffet in his March 2013Letterto
Shareholders
Focusing on the patterns
that shapeevery aspect of
ourlives.

8. https://www.fastcompany.com/3052703/the-secrets-of-ubers-
mysterious-surge-pricing-algorithm-revealed
https://www.fastcompany.com/3060803/algorithmic-pricing-is-
creating-an-arms-race-on-amazons-marketplace
https://www.bloomberg.com/news/articles/2018-08-
08/trump-says-drug-prices-will-drop-really-really-
substantially
https://www.bloomberg.com/graphics/2018-drug-spread-
pricing/
#Pricing driven by #Middlemen OR #IntermediaryMimicingAlgorithms
Algorithmic Pricing Is Creating An
Arms Race On Amazon’s
Marketplace
But the consumer is often the one
who loses.
Is the way Uberchanges its prices fair?
And, maybe more importantly, does it
actually work? Researchers just
reverse engineered the app to find the
answer

9. http://knowledge.wharton.upenn.edu/article/the-promise-and-
perils-of-dynamic-pricing/
https://www.researchgate.net/publication/220340225_Dynamic_prici
ng_of_electricity_in_retail_markets
https://mpra.ub.uni-
muenchen.de/76977/1/MPRA_paper_76977.pdf
#Pricing driven by #Middlemen OR #IntermediaryMimicingAlgorithms
Dynamic pricing of electricity in
retail markets
The Promise —andPerils —of
Dynamic Pricing
Feb 23, 2016
“Many moreindustries areawareof
dynamic pricing, and customers are
becoming aware that these things
happen and it’s gaining social
acceptance.”–Senthil Veeraraghavan

10. https://gerardjrego.com/2014/01/30/profit-pool-101-and-google-sells-handset-business-to-lenovo/
#ProfitPool fundamentals are #Rational

11. https://www.shellfoundation.org/ShellFoundation.org_new/media/Shell-
Foundation-Reports/shell_foundation_transforming_agricultural_supply_chains.pdfhttps://assets.kpmg.com/content/dam/kpmg/pdf/2013/06/agricultural-and-food-value-chain-v2.pdf
#ProfitPool Agriculture
#Upstream #Midstream #Downstream

12. 1.Upstream – IP?
2.Midstream – Scale
3.Downstream
1.Trade
2.Finance
3.Distribute
4.Retail
#ProfitPool clear where the economics are

13. #ProfitPool beat #theMarket (#PredictablyIrrational)
http://financials.morningstar.com/ratios/r.html?t=AAPL

14. #Stood on #Rationality world #PredictablyIrrational
Warren Buffett just made
more than $2 billion in
Apple
https://www.cnbc.com/2018/08/01/warre
n-buffett-just-made-more-than-2-billion-in-
apple.htmlhttps://money.cnn.com/2013/01/24/investing/apple-
stock/index.html
http://financials.morningstar.com/ratios/r.html?t=AAPL

15. Fortune 500:
A study by planners at Shell found that by 1983, ..That’s an average
mortality rate of 12 companies per year, or one per month.
Forbes 100
In 1917, from the largest 100 US companies. By 1987, 61 of those
companies no longer existed. Over the seventy year span, in other
words, an average of about one company per year disappeared.
S&P 500
The S&P 500 list provides a third reference point. In 1957, the S&P
listing of 90 top companies was expanded to 500. By 1997, only 74
of the original 500 companies remained, an average mortality rate of
more than 10 per year.
#Behaviors accelerate Company #Mortality
http://www.innovationlabs.co
m/BusModelWarfare.pdf

16. #Trust not benefitting #Prosumers will be #Disrupted
https://www.fastcompany.com/3052703/the-secrets-of-ubers-
mysterious-surge-pricing-algorithm-revealed
https://techcrunch.com/2016/12/08/microsoft-officially-closes-its-
26-2b-acquisition-of-linkedin/
https://www.bloomberg.com/features/2018-palantir-peter-
thiel/
Microsoft officially closes its $26.2B
acquisition ofLinkedIn.
FacebookCambridge Analytica
Scandal: 10 Questions Answered
Data-mining company is using Waron
Terrortools to track American citizens.
The scary thing? Palantiris desperate
fornew customers.

17. #Takeaway
1. We are all #PredictablyIrrational
2. #IndividualBehaviour will be the new #Currency (we are all
#Prosumers)
3. #Trust is New Gold (Collateral on #Behaviors)
4. All #Intermediary (#IrrationalBehaviour) lead industries
#Disintermediated
5. #Algorithms with #Marketplace business models create #Trust
6. #Experts #Disrupted, #Expertise #Unbundled
7. #Longtail winner takes all