Aug

4

1. Darwin in the Origin pictures the twigs of a tree at all times trying to crowd out and overtake those surrounding it. How can this be applied to market moves?

2. The theory of maximum pain would predict that options end up at the price that maximizes the value to the option sellers. What other moves can cause maximum pain to the lower levels of the market ecosystem and how can hope be maintained and new energy be taken in if maximum pain is inflicted on a regular basis.

3. The stocks are at a 2 month low relative to bonds and this is bullish for stocks.

4. Before a market is ready to spring back it will pretend to recap the old woeful path.

5. The system of digital records for doctors is much less friendly to the patient than the old way where a patient would call the Dr. To get his results and diagnosis.

6. The bank stocks supped with the Bad One in the 2008 period, and now they must carry a long spoon. However, the more the facade of penalties on them is inflicted with one hand, the more they must wallow in the oblivion of unfavorable publicity, thereby keeping man small, the greater the likelihood of the helping hand on the other side. I like buying back below the constructal number of 15.

7. The upside down man disseminated bearish remarks on fixed income, at just the right time to create maximum level of selling at just the wrong time. For example, the bonds went down to 126 and are up almost 10 percentage points since he told everyone the gig was up. The flow of funds man at the Brothers, who held the same position as the upside down man in esteem and followship in his day was more helpful to the public when he changed from bearish to bullish in 1981 when interest rates were 16% or so.

8. Europe has been incredibly weak relative to the Us in recent weeks down about 5 percentage points more than us stocks.

9. The best book on physics for the layman is Knowing: The Nature of Physical Law by Michael Munowitz. I have not read his book Principles of Chemistry but many reviewers and esteemable academics say he has also written the best book on chemistry.

10. The book Design in Nature by Bejan and Zane proposes that the tree like structure occurs in all things that move and this is the structure that minimizes the loss of energy during the movement.

11. The book Survival Analysis with Long Term Survivors by Maller and Zhou should be required reading for all those who say that the longer the market has gone without a great catastrophe, the greater the chance that it will die.

To be continued.

Peter Grieve writes:

To expand on the Darwinian twig idea, visual processing centers in the retina also compete for brain space during a "plastic" period.

Kittens were placed in an environment which contained only vertical stripes (with an unpleasant sounding head clamp to make sure the stripes remained vertical with respect to their heads). The result was they responded less to other patterns in learning experiments, presumably because the vertical stripe receptors won the competition for brain support during the developmental period.

Now that I've written this, it occurs to me that the head clamp might be the most useful analogy for aspects of strategic learning.

Gary Rogan writes: 

I read this interesting book a couple of months ago: It's a Jungle in There: How Competition and Cooperation in the Brain Shape the Mind. According to the book the entire nervous system is always Darwinian on multiple levels:

"He argues that the overarching theory of biology, Darwin's theory, should be the overarching theory of cognitive psychology, the science of mental functioning. He explores this new and intriguing idea by showing how neural elements compete and cooperate in a kind of inner jungle, where only the fittest survive. Competition within your brain does as much to shape who you are as the physical and figurative competition you face externally."
 


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