Daily Speculations

The Web Site of Victor Niederhoffer & Laurel Kenner

Dedicated to the scientific method, free markets, deflating ballyhoo, creating value, and laughter;  a forum for us to use our meager abilities to make the world of specinvestments a better place.

 

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8/11/04
Conservation of Energy by Daniel Flam

If one looks at the second law of thermodynamics, it is easy to see an interesting "sort of kelly's investment law of physics": To bring the world to the lowest energy level possible. Obviously this is not possible at once, one need smart beings that can help extract the energy. The smarter these beings are, the better they will squeeze the last drops of energy out. Sort of what specs are doing in the market.

Think about it for a second:
If all energy is wasted as fast as possible the untapped energy would not have any means of being consumed. Nature invented us to dig out all the pure carbon out of the ground burn it and then produce nuclear devices that will enable the further diffusing of the universe. The "economy" just serves a purpose as imposing a "budget" on the "bet" (try to waste as much energy as possible but stay alive to try to waste more).

That is why IMHO the oil will be a factor for a long time 'till its almost all gone. Economy and physics... Has anyone done a kelly physical system analysis based on the kelly money management stuff?

BTW, It seems to me that the next card up natures sleeve is the computer. Its like a virus - has no life on its own (!) it depends on us - yet it has attained its own life. We cannot pull the plug anymore... billions will die - no food, medicine, control, transportation... and it is forcing us to make it better 'till the point they will be able to cultivate the ultimate meme: "Self awareness", and there are many things that computers do better than us already.