Bits and Pieces
Idiot Savant vs. Bessel
Occasionally one reads of a person like Bessel that taught himself mathematics so he could calculate the distance of the solar system and invented Bessel functions as a result. or Newton similarly in physics. There are a google of such greats with no training that one comes across who pioneered in mathematics in an attempt to gain incite into their own field. and one should not leave Galton unmentioned here or even Pearson. On the other end of things are the people like Bill James, Wilder, Arthur Merril, and David Sklansky. They have a mathematical bent, but they are untrained and relatively careless and lack humility. When one reads the latter group, Sklansky in particular, one wants to throw up his hands a million times and say "that's not true, you're missing the point". The Romantic Professor Miller, I believe, has made a similar point; and the poker players in my office agree. This is not to say by any means that one has to be a mathematician to make a contribution of a quantitative nature. Indeed, I found many of the topics treated in Sklansky quite applicable to our own field, and with a bit of simulation, and working out of examples, they would be most useful.
11/29/04 Mathematics of Juggling
There is an excellent article in Discovery Magazine, Dec. 2004, on the mathematics of juggling. Jugglers must throw balls in order so they don't hit each other; there occurs a "mathematical freezing point" between randomness and predictability like a phase transition that separates a liquid from a solid. And, there is much counting of intersecting lines in multidimensional space and use of a relatively simple language called Siteswap based on the height a ball is thrown, and whether the ball is caught with the same hand or opposite. Much application to juggling different markets and sizes of positions one would think.
11/12/04 A Strong Beginning
One has always found it a little too pat when the beginning of a period goes straight in one direction. Also, when a pat seasonal like the tendency to rise in the first two months of the year is realized to the full extent of the average in the first 5 or 10 trading days. Also, when more than 15 days has gone by without a serious decline. All such factors seem applicable now, and one has his statistics on the table in a Franklinian spirit to maintain a proper humility and perspective amidst this seeming abundance of riches.
11/22/04 The Body Snatchers
So many of our institutions, our common pastimes have been taken over by imposters and makes the putative goal of the activity completely at odds with the output. Yes, of course, all the propaganda we receive about the stock market is part of it. And the government regulators are snatched by the companies being regulated, as public choice theory teaches us. And we know that in most cases, the legal fees are greater than any possible benefits of a legal trial. And similarly, the medical system is in the main part of the imperial triangle of co-pay, preclude competition from new companies, and maintenance of the pari passu of the medical interests, and education has in the main become a system of spreading the idea that has the world in its grip by unionized forces, and the newspapers and TV and other second-hand disseminators of culture..... the list can go on.
And, yes, one feels superfluous about it all. But even I was surprised at the recent Harvard weekend honoring Jack Barnaby the greatest tennis and squash coach in history, a warm and noble man, the consummate teacher of the 20th century, and a person who was better at his profession than any I know. What surprised me was that I could have been so naive to fail to realize that now memorials at institutions are mainly fund raisers rather than efforts to honor the deceased. The memorial came almost 3 years after he died and had to wait until it could be fitted around a fund raiser for the tennis team and a program to honor past givers of tennis and squash buildings at Harvard. While these programs are very good, and the donors very honorable and charitable and good men, I felt a palpable uneasiness as I went up to the podium to praise Jack, and remember him. How could I have been so naive to fail to realize that the snatchers had taken over the dead as well as the living.
1 . The beaten-down companies in the Dow and S&P seem like very good candidates before the palookas come in to buy them in force at the beginning of the new year.
2. The movie "The Aviator" about Howard Hughes almost presents a heroic picture of a businessman trying to produce and create against the backdrop of corrupt government trying to buy votes through redistribution and bribery. Like "The Untouchables," this touches on the problem . But of course the filmmakers limn this as examples of special veniality rather than a natural function of robbing Peter to pay Paul. The only way they are able in their collective consciousness to praise a businessman is to present him as a freak or a nutcase. Or else people might actually feel big and this would be against the idea that has the government in its grip.
3. One has been brushing up on his polar coordinates and complex numbers lately and sees many areas where this could be fruitfully used in describing the moving time series relations between two markets in a simplistic way.
4. I am going to an area where much shuffleboard is played shortly and will hope to find the many strategies employed there of blocking and then going for a high number and throwing with a spin, applicable to forecasting the shuffleboard game of the market in a week.
5. So often, one finds that the insights that one has in a field he knows the most about are directly applicable to the market. And I encourage you to think about what you know the best, and relate it to making money in the market as much better than following the ideas of gurus in books such as the "Doc" promised to hide from us when not perfecting the shuffleboard or other games here.
11/10/04 A Bee in the Bonnet
I've had a bee in the bonnet since the Friday, Nov. 5 release of the employment numbers was so drastically greater than expected, so clearly imperative if previously released to the outcome of the race as it would have totally defused the one of the two points that the Repubs were weakest on.
But it wasn't that the numbers would have been particularly so important and had such an impact if released just one month earlier that caused the buzzing to reverberate. It was the power of it all. The total nonchalance and aplomb and celerity that the operatives displayed in the timely release.
Yes, it's sort of like the spouse that lets you know of infidelity after it's too late, as the geologist said, and yes, it's like the horse's head if you don't hire Johnny Fontane in the Godfather.
But I felt that something was quite right -- to capture the sheer power of it all. Finally, I think I hit the right note and it was there all along. When Wynand comes back after two months on a cruise with Roark to learn the philosophy of self esteem.
"..finally, dear. For the first time I feel I can talk to you as an equal. That I understand that being interested in one's own happiness is not evil. That self esteem and self reliance is the key to all the good. I could stay up all night just talking about these ideas. Please can we just talk. And then perhaps for the first time... "
" "But , honey, I already bought tickets for tonight for a play and we'll be having cocktails with your friends from the paper and the club after."
" You already bought them? What play?"
"No Skin off your Nose. It's all the rage."