All posts by neville

A good quote from Walter Isaacson

I think it’s wacky and outdated that we teach school math as a process leading up to calculus. That’s a relic of the Sputnik era, when were were all going to calculate rocket trajectories. Instead, starting in fourth grade, I think we should be teaching mathematical logic, proofs, and algorithms. We should also emphasize statistics and probabilities. Every kid should be able to do Boolean algebra and formal logic, rather than getting mired in just traditional algebra. We should also teach programming languages, especially C++, but we need to make sure that kids are also comfortable with the theory and concepts of algorithms, which underpins all programming language. Also, like Ada Lovelace, we should learn that math is a beautiful thing to be visualized, and not just formulas to be memorized. When we see an equation or algorithm or logical sequence, we should visualize it just as we do a line of her dad’s poetry, such as “she walks in beauty like the night.”

playoffPredictor.com Nailed It!

As if ever there was a doubt…

Couldn’t have got it more right, and got it right the instant the games went final.

In fact, the playoffPredictor.com site got every single top 4 for the entire season (with the exception of the initial poll, of course — that is needed to build the bias file between the computer ranking and the committee ranking).

 

playoffPredictor.com correctly predicted a lot of things the committe did this year, including:

  • TCU over Alabama in the October poll
  • Ohio State over TCU and Baylor in the final poll

Score 1 for big data and analytics!

Looking forward to keeping the site going next year.  I’ll probably also do some other stuff now that the math is coded — such as comparing all teams in the BCS era. Stay tuned!

My Halloween Trick-or-Treaters 2014

274 trick or treaters at our door this year! Here are all the costumes from most popular to least:

Row Labels Sum of count
elsa 14
ninja 12
batman 11
witch 7
mouse 6
princess 6
fairy 6
spiderman 6
power ranger 5
tenage mutant ninja turtle 5
zombie 4
cat 4
pirate 4
vampire 4
ghoul 4
anna 3
skelleton 3
fantasy girl 3
ironman 3
army skeleton 3
convict 3
bumble bee 3
cowboy 3
teenage mutant ninja turtle 3
mickey mouse 3
captain america 3
dracula 3
nerd 3
grim reaper 3
guardians of the galaxy 3
sport person 2
skeleton 2
thunder players 2
minion 2
snow white 2
monster high 2
lion 2
generic princess 2
scarecrow 2
baby 2
cat girl 2
girls 2
clown 2
dorothy 2
butterfly 2
balerina 2
thor 2
indian 2
general 2
regae 2
wolfman 2
angel 1
red riding hood 1
turtle 1
greek goddess 1
sharknado 1
basketball player 1
ghost 1
groovy girl 1
alice in wonderland 1
cat lady 1
robin 1
heart girl 1
smurf 1
hippie 1
supermodel 1
hot dog 1
gi joe 1
hulk 1
waldo 1
hunter 1
purge 1
incredible hulk 1
reindeer 1
cat woman 1
butcher 1
chef 1
bad surgeon 1
jelly 1
sophie the first 1
john lennon 1
supergirl 1
johnny bravo 1
swat team guy 1
joker 1
the purge 1
cinderella 1
toga 1
clone wars 1
giraffe 1
kit kat 1
wig creepy clown 1
batgirl 1
elmo 1
little red riding hood 1
raggadey ann 1
luigi 1
busted con— 1
marty mcFly 1
riddler 1
mermaid 1
santa claus 1
axe man 1
schoolthing 1
minecraft 1
shiner 1
minie mouse 1
fireman 1
cow 1
football player 1
black/brown guy 1
buzz lightyear 1
cross dressing girl 1
sully 1
mummy 1
superhero 1
muscle man 1
surper girl 1
deer 1
genie 1
doctor 1
texas chainsaw massacre 1
nothing 1
baseball player 1
optimus prime 1
tinkerbell 1
ou fan 1
transformer 1
panda 1
two faced ghost 1
peanut butter 1
vampire gypsy 1
piglet 1
whinnie the poo 1
pink lady 1
cat america 1
boba fet 1
jsaon 1
20′s girl 1
killer 1
Grand Total 274

 

Meraki Easter Eggs

So the Meraki dashboard is awesome.  In addition to doing things like manage wireless and wired networks, it can do several other things.   I know of 3. Add more in the comments if you know them:

In the make-a-wish field at the bottom of the dashboard type:

“unicorn”

“make me a sandwich”

“make me pink”

So who is the #1 IT company anyways?

John Chambers has given us a consistent vision over the past couple years – transforming Cisco into the #1 IT company worldwide.

Awesome!

During the breakouts I started reflecting on this vision in a little more depth. The first obvious observation is that if our goal is to be the #1 IT company worldwide then we can’t be #1 yet.

So if we are not #1 who is? And how far away are we from that position? How will we know when we get there?

Turns out there actually is a Wikipedia entry dedicated to this question.  Their criterion is annual revenue, which is a good start, but I don’t think greatest revenue equates to #1 IT company.  In my mind the #1 IT company would be a leader in annual revenue, market cap, and number of employees.   Market cap in particular would be the most compelling singe statistic to me.

So how do we (Cisco) rank among our IT peers in market cap?

As of August 2014 Cisco is the #41 largest market cap corporation in the S&P. That is #41 of all companies, not just IT companies.

This begs the question “Of the 40 companies with a larger market cap, which companies are IT companies?”  As we have articulated all companies are IT companies now (Ford is an IT company that sells cars, Coke is an IT company that sells soda) – and that is very true. There are no companies large or small that can survive this market without a strategic vision enabled by technology. However, for the purposes of this article let’s just agree that IBM is an IT company and Exxon is not an IT company, OK?

So pulling out the Exxons, Proctor&Gambles and Pfizers of the world I get that we are currently the IT #10 company by market cap. This is based off of S&P data – so only US companies considered here.  Here is the list:

it1

OK – so how long reasonably would it take us to get from #10 to #1?  Well, let’s say the Internet of Things is that vision of every tree and cow is an internet connected tree and cow and the growth engine for us to get to say ~15% revenue growth a year for the next 5 years . On top of that say we can grow total earnings a year by 20% and say we even get P/E multiple expansion from where it is now at 15 to 20 – the math comes to

it2

So that gets us to $431B market cap. Note that projection is waaaaaay optimistic. Everything would have to go right and then some to get to those kinds of numbers.  Consider that 5 years ago in August 2009 we were at $130B market cap and $36B in sales – so in the last 5 years we have grown market cap by donuts and sales by a total of 25%.  To think we will grow sales 100% in the next 5 years when we only did 25% in the last five is definitely stretch thinking.

Well, even at $431B five years from now, that still 30% smaller than Apple is today.  Could Apple decline significantly?  Sure. The iPhone is getting older and who know if the iPhone phablets will be a big bust? So sure they could decline over the next 5 years.

How about Google, currently in the #2 position right now?    $431B would be bigger than Google right now, but it is real hard to see how Google would decline over the next 5 years. In fact, 5 years from now there will be more ad spending on digital media than TV media. Could they lose advertising dollars to Facebook?  Sure, but the point is someone will win – weather it is Apple vs Microsoft   or   Google vs Facebook.    So the short answer is no, even in a best case scenario we will not be the #1 IT company in 5 years.

These aren’t the droids you are looking for. If you look at the list closely, I’d argue that the top ones on the list are all consumer companies (Apple, Google, Facebook), leaving less enterprise challengers in our path (IBM, Oracle, Cisco).   So, if you take the vision is to be the #1 Enterprise IT company in the world (which actually I think is the vision JC has) then things get more possible.

Here is the list again with the enterprise focused companies called out in green

it3

I think IBM and Oracle are well within our sites.  There is no reason we can not have an Advanced Services arm like IBM and I don’t see what propels names like IBM, Oracle and HP forward over the next 5 years.  We have Internet of Everything and growth in mobility.  They have— old technology.

So yes, even at a more reasonable 5% annual revenue growth and 10% annual earnings growth with no P/E expansion, that math gets us to

it4

So yes, if IBM and Oracle stagnate and we execute, in 3-4 years we will be a bigger market cap player than either of those.

Microsoft however is a different story. We would need the optimistic scenario to play out to overtake them. If they grow at expectations and we grow at others’ expectations of us then we will not surpass Microsoft in the next ten years.

 

So here’s to double digit revenue growth and 20% earnings growth! I personally am looking forward to the journey of becoming #1!

 

If you have made it through the article to this point then tweet me back (@nevilleaga)  I am curious to see who you think is the #1 IT company right now and who we are going to take down when we achieve our vision.

Why I’m changing my Twitter handle

So I have decided to change my handle from @nevilleaga to @CiscoNeville.  Why?  I tend to push work related content on twitter and I tend to do personal content on Facebook.   What can I say? Scott Hanson inspired me!

So I probably will not change my style — that is– still tweeting only about a couple times a week and trying to back up my tweets with more in-depth analysis on this blog.

Will I be tweeting about IT Security? Cisco Security?  Probably just a little bit. After 6 years now in a generalist role I have lost a little of the pure play around security, so my tweets tend to be everything Cisco sells (which is quite a lot). But I’ll always have the Security first perspective things (it touches every point of the network) and that’s where my hat lies.

Why not @CiscoSecurityGeek?  Too many characters. Twitter only allows 15 :(

So catch me at @CiscoNeville

Volatility is much lower today than it was when I was born…

This was so non-intutive to me that I deemed it worthy of a quick blog post.  Take historical prices from yahoo finance (or another website) and look at the daily high and low quoted prices of the S&P 500 during any handful of days from 1972 and compare them to a handful of days from 2014.

For all 1972-1975 the lowest daily volatility was 1.05%  (October 9, 1972). The highest was 6.47%  (interestingly October 9 again, this time 1974) and the median was 1.85%. An average day during that period would be Feb 26, 1973 where the S&P500 high was 113.26 and the low was 111.15 for a daily volatility of ~1.86%.

Contrast that to 2014. Over the last 90 days the lowest volatility has been 0.31% (April 23) and the median has been ~ 0.7%.   In fact, 80% of the trading days had volatility below 1%, where as pointed out in the paragraph above zero trading days from 1972 to 1975 were below 1%

Conclusion: Even with all the internet trading and cheap commissions, daily volatility has gone down significantly over the past 40 years.  You would think the free-er flow of capital would increase volatility, but it has not.