Nov

19

Much has been written on Daily Speculations about the correlation of music and markets. I've found quite a lot of literature comparing charts with the notes on a musical score. Vic and Laurel have written extensively about this, and quite a number of articles have appeared in Daily Speculations comparing music with markets and trading. I, myself happen to be blessed/cursed with perfect pitch. I was diagnosed with this affliction/talent at a very early age, and my parents always attributed it to the amount and variety of music we had around the house. Later on, I did some reading about it and found much so contradictory information regarding perfect pitch as to render it useless. The curse of it has been that I simply cannot listen to things like beginning orchestras, or bad karaoke singers, which are like fingers on a chalkboard to me. I find myself out of my comfort zone when listening to "less than perfect" pitch which appears quite frequently in day to day living…

I've noticed that perfect pitch also can help me stay out of a bad situation when I'm in the market, and all of the sudden where it's trading effortlessly in what could be compared to a C-Major scale, then it suddenly shifts to a to a C-sharp minor. Such shifts are often a good indicator of the ever changing cycles in the market, especially when a flat note appears out of the blue. It has been my observation that my perfect pitch has allowed me to keep from stepping on the many landmines that the mistress of the market spreads in our path, however this is anecdotal and cannot be proved… I would be interested if any psychologist has ever studied the prevalence of traders with perfect pitch (sometimes referred to as absolute pitch), and the effects of such. I would also be interested in any anecdotes from Vic and Laurel, or any readers of their experiences with perfect pitch. Perhaps I'm going up another blind alley, but this is a subject that should, or ought to be quantified. One blessing of perfect pitch is that I can tune any stringed instrument by ear, which amazes my friends.

Nigel Davies writes:

N DaviesStrong chess players are similarly pained when they see a move which isn't in keeping with the position. And coming from a musical family I've long been fascinated by the connection between music and chess, outstanding practitioners of both having been Mark Taimanov (GM and concert pianist), Lajos Portisch (GM and singer), Vassily Smyslov (GM and singer) and Andre Philidor (the leading player of his day and operatic composer).

One theory I have is that whilst music represents harmony within differentiated sound, chess has a similar kind of harmony within differentiated space. Is it too fanciful to believe that markets are similar in having a harmony within differentiated price? I don't think so, and it's interesting to speculate that many list members have an interest in all three disciplines precisely because of this similarity.

Jim Sogi adds:

The physics of many musical instruments do not allow them to be in consistent tune on the various octaves. For example, a guitar is not perfectly in tune along its neck and for open strings at the same time and requires some fiddling with the nut and bridge to get the notes to be consistent along the length of the neck. The Buzz Feiten tuning system is a corrective measure to address these issues. I submit that the mechanics of the market do not allow perfect tuning and harmony, and some discordance is inevitable.

Laurence Glazier writes:

Seeing the similarities between music and market is bound to be helpful, but is unlikely to be predictive. They remain two different fields. An analogy in music would be to take the first several chords of a Bach Chorale and try (without sight of them) to predict the next few chords. Or likewise to predict the next few moves of a great chess player. So while the Market may walk with a recognizable gait, that might be as far as it goes.

I'd also suggest that while it seems that the rules have broken down, it is just that things are playing out faster, Volatility nudges the metronome setting - but interference by government is stirring the pot. When writing music one may adjust the harmonic rhythm for dramatic effect, perhaps there is are equivalents in the market to changes in the durations of chords in a chorale, or to a series of measures on a dominant pedal.

Laurel Kenner writes:

I play a lot of chamber music, and learned recently that string players tune to A=441. Pianos are tuned to A=440. The strings tune to the higher frequency for more "presence."

The market abounds in such slippage, and sometimes it pays not to argue over a the odd quarter-point.

Jim Sogi adds:

J SogiOne more comment on this subject. Playing music, one never really hits a perfect pitch. There's no emotional content to it. That's why those funky Kmart keyboards sound so bad, they are in perfect pitch. A good singer, a guitar player, a violin player, all waver around the note with vibrato, or bend up to the note or bend down to the note, and move it around, stretch it, giving it much more powerful feeling of discomfort and resolution in a subtle manner.

Let's take today, Friday, in the market. A straight run up after the gap would not have had nearly the emotional impact the midday drops to new lows, the wavering about the bottoms, and the strong surprise finish. That's emotion.


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8 Comments so far

  1. gaston monescu on November 19, 2008 9:28 pm

    cool post. while anecdotal, your opinion/theory will go into my mental files.

  2. Robert on November 19, 2008 11:12 pm

    As far as I know I don't have perfect pitch. I do, however, have a strong aversion to watching shows like American Idol wherein contestants butcher songs. To hear someone sing out of tune feels like nails on a chalkboard. I always told myself I just didn't like to see someone embarrass himself. How do you know if you have perfect pitch?

  3. George Parkanyi on November 19, 2008 11:34 pm

    I’ve bought toys for my kids in the past that a guitar or some such thing with buttons representing notes that all work in a particular key. No matter what you press and in what sequence it still comes out sounding “musical”.

    I play and compose some music myself, and sometimes have thought about what it might sound like if you translated trades into musical notes that work in certain keys. For example you might assign notes to absolute prices or to price increments and perhaps audio volume to trade size. It would be an interesting experience to literally “listen” to the market, and perhaps with some practice and a trained ear, that too could become information.

    I’ve often also thought that trading (assuming you’re doing it reasonably successfully) is something you can do till your last breath if you desire to - even if you are infirm. For example, how would a blind or a deaf person trade?

    With synthesized digital music and computer horsepower these days, it shouldn’t be all that difficult to create an audio or kinesthetic experience of the markets. Perhaps it’s already been done.

    GP

  4. Mark Candon on November 20, 2008 10:35 am

    One of the Vic and Laurel's best insights in Practical Speculation was the market's "music", notes going up and down just like the Dow. Right now we're in bass clef. Wouldn't perfect pitch be easier to achieve in bass clef, since the waves are longer? Good boys deserve fudge always.

  5. Mr. Skeptical. on November 20, 2008 5:11 pm

    It is at times when the market is about to hit its highest pitch that I wonder what the likes of Mr. Fama and company have to say about market efficiency. One can only wonder the extent of "efficiency" in market information when Ma and Pa are desperately calling their financial advisor and telling him/her to "…just get me out."

    "Beware when the great God lets loose a thinker on this planet." — Ralph Waldo Emerson

  6. KR Duncan on November 22, 2008 4:55 am

    Is this a case of two talents and one great metaphor? Or, does the physiological properties of the brain that allow perfect pitch also allow higher order non-linear filtering in real time? Maybe a bit of both.

  7. Stephanie Q on September 23, 2009 4:42 pm

    I have perfect pitch and I can't listen to bad singers or out of tune instruments. Even when I went for an a capella concert in school, it was hard to listen because I kept criticizing their pitches throughout the whole concert. It would be really cool if different numbers in the market could be tuned to pitches. For example, as the DOW goes up, the pitch goes up, and then as the DOW goes down, the pitch goes down. Then people who have perfect pitch can simply "listen" to the market instead of watching their screens!

  8. Andrew on January 19, 2011 7:03 am

    Yes, tuning stringed instruments by ear is a good party-trick: it gets me some strange looks from my children’s music teachers when they run up to me just before a concert is to start with their violin, or their friend’s double-bass or whatever. It also means that I used to be able to set the idle rate on my car perfectly, in the days when such things were adjustable.

    However, perfect pitch is also sometimes a curse. I can’t listen to music played on “period” instruments tuned to old pitches. Once I paid extra to have a tape player installed in my car instead of just a radio, but the tape player ran too fast and, again, I couldn’t listen to it. Imagine trying to explain that problem to the garage! I didn’t bother …

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