Feb

26

Two Fun Things, from Alston Mabry

February 26, 2019 |

 Something with market implications: Significant Wave Height

And an interesting bio: Walter Munk

Jim Sogi writes: 

As a surfer, I expect at least one wave on any given day to be 10x the size of the smaller sized waves. The idea of the "rogue" wave is also misguided since in the open ocean there will be waves, 10x the smaller sized wave on any given day. We call it the wave of the day. Lucky is the guy who waits for it and doesn't get caught inside and thrashed and can ride the crest to the inside.

It's the holes created in the water, not just the peaks, that can be as dangerous as the breaking crest. I've been in rough water when the boat just drops below the surface in a terrifying moment as the water sucks out under the boat. Not intuitive at all. These can be terrifying market moments when it happens, but it's definitely part of the ocean and market physics. 


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  1. Michel Olagnon on March 1, 2019 1:38 pm

    Significant wave height is a statistical characterization of sea conditions, not a predictor, and as I point out in my Rogue Waves book (https://www.bloomsbury.com/us/rogue-waves-9781472944429/), Victor himself wrote that being a statistician is not up to being a speculator, at least for conversations at parties! Science agrees with Jim Sogi that the “normal” highest wave of any day is quite impressive when compared to the average waves, themselves much smaller than the significant wave height.
    Rogue waves are often defined as those that are unexpected when predicting them from significant wave height only. On many occasions, they reflect a change in regime, for instance the arrival of a new wave train corresponding the cold front in a pressure low, to a very localized patch of high winds within a storm, to the sudden overpassing of a shoaling barrier with rising tide, and so on. They are just a sign of how inadequate predictions using significant wave height are…
    Holes in the sea do exist, yet they are much rarer out in the ocean than rogue crests, it might be appropriate to compare them to surges in the markets rather than drops.

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