1994-04-21 - Financial Markets

Header Data

From: “Istvan Oszaraz von Keszi” <vkisosza@acs.ucalgary.ca>
To: cypherpunks@toad.com
Message Hash: 2af1bf94fce99006fcf117d0d564bdc70f5f4f5fd48107a36f13c4b8089a828b
Message ID: <9404211215.AA71287@acs5.acs.ucalgary.ca>
Reply To: N/A
UTC Datetime: 1994-04-21 12:13:30 UTC
Raw Date: Thu, 21 Apr 94 05:13:30 PDT

Raw message

From: "Istvan Oszaraz von Keszi" <vkisosza@acs.ucalgary.ca>
Date: Thu, 21 Apr 94 05:13:30 PDT
To: cypherpunks@toad.com
Subject: Financial Markets
Message-ID: <9404211215.AA71287@acs5.acs.ucalgary.ca>
MIME-Version: 1.0
Content-Type: text/plain

I thought I'd follow up on the Dirty Laundry Posts:

One matter must always be considered.  The market is influenced
by an infinite number of variables.  There is no magic formula,
no perfect multiple regression that will unfailingly predict the
market's direction.  The guy with the fool proof black box does
not last, or you would have read about him by now.

Although no one has discovered El Dorado, certain people do
emerge as consistent winners in the stock market or futures.
They are outnumbered by losers.  Fifty years ago, those
consistent winners may have been the people who had the most
access to inside information.  There is virtually no inside
information today that will dramtically move the market as a
whole.  Yet there are still consistent winners in the markets.

Can market feel really help if stock prices do indeed take a
random walk?  Consider a migrating goose.  It may appear to be on
some sort of random flight, but an ornithologist who has studied
the behaviour of geese in similar circumstances might feel
comfortable makinf certain predictions about a particular bird.
If it's October, that goose is flying south even if it
temporarily changes direction for no apparent reason.  Maybe it
tends to fly at between 1,200 and 1,800 feet.  It usually follows
a leader.  The more you study the more you know.  Even the
experts won't know where the thing will land.  But to them its
flight odes not appear quite so random.

So what is this mysterious market feel?  Developing a sense of
how the market has reacted to similar circumstances.  Assessing
what is different about this situation.  Talking to eople because
they may have thought of something you overlooked.  Assimilating
new information quickly.  Adhering to rules to keep losses small
enough to minimize the amount netted out from the gains.  Playing
the percentages.  Maybe a facility for numbers.  Maybe a dash of
luck.  Perhaps ten years of experience, rather than one year of
experience repeated ten times over.

I'd be happy to continue discussions with interested parties
since I have copious amounts of spare time.  Right now though,
it's write code time.