Feb
19
The Hidden World of Microbes, from Victor Niederhoffer
February 19, 2008 |
The greatest diversity of genes and life forms appears to come from the microbial world among bacteria and archae, according to an article titled The Undiscovered Planet in Harvard Magazine. Everywhere they look, they are seeing new species and new sources of curing disease as most of the hundreds of millions of species that live within our body or within the soil are beneficial. Now scientists are learning how to cultivate them and trying to turn them into microbial medicines. One wonders if the microscopic tick data contains hundreds of millions of forms that could be used to analyze the macroscopic movements. The work of Larry Harris and of Niederhoffer and Osborne contains many interesting microscopic patterns that have not been tapped or exploited, I believe.
Easan Katir adds:
One theorizes certain tick data patterns plus trade volume could give early indications of institutional accumulation or distribution. This weekend my son and I completed an analysis of the algorithms we have used this past year to screen for investment opportunities, to determine which worked the best. Results indicate certain large trading volume increase patterns to be the most reliable of the eight or so screens we've developed. Similarly, I've read that in 16 hours, a single e. coli cell, given the proper nutrients, can multiply to equal the human population count of the planet. Its exponential growth looks a bit like a one year platinum chart. If we're comparing microbes with finance, one cannot help but notice similarities between mad cow disease and the subprime mess: gruesome massive culling of herds and portfolios.
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Drilling down even further beneath the microbial species level to the genomic level, it is only a matter of time until some of the pattern recognition techniques associated with metagenomic sequencning make their way into finance (if they haven’t done so already). At this granular level, patterns that connect the base resource material (capital) before speciation (market segmentation) start to become apparent to the observer well before higher order cognition enters the picture.
Once when I had a soft stool, I took a large B multivitamin and soon developed explosive diarrhea. I think the Federal Reserve could take note when it over-reacts to economic problems; it could be feeding the speculative bug.