Jan

10

I would like to toss an idea regarding the post Sampling Without Replacement, from Victor Niederhoffer.

I'm thinking of signals and receptors. There seem to be no receptors for these alleged signals. One thought, assuming an agent, is signals are being polluted by governments or just an abnormal amount of uncertainty. Have the opposing Quants finally gained enough complexity and control to nullify what once were signals, leaving nothing in their place? Then this is a rational enterprise on their part, generating randomness (as Sam Marx posited). Assuming this purpose driven agentic randomness would presume something of a very large player, concerted or homogeneous group. Purposeful randomness should fail, unless the catcher knows where that "random number" is being thrown. But now I think otherwise in that a random system could help the vig. Also possible is non purposeful randomness arising from a high level of uncertainty.

The world markets recently seemed to be largely acting in one direction across asset classes, thereby ruining ideas of diversification. This was the means of those without means to hedge. This would mean that countervailing elements (values) gold, oil, stocks, dollars etc. do not support the traditional means of valuation in a growing world economy, as I derive from your posts. In other words, I’ve understood you to mean that value is derived from the value of other things (circular, yet valid). Opposing forces have been reduced for now. However, you say that bonds have offset some of the stock losses.

I would simply suggest that the lack of good valuations in bonds has created a temporary random environment. A virus? Arguing against myself, isn't this always the case for oil?

But to test:

1) macro test — deductive: When in the past were there no discernible predictive sequences? I’m respectfully submitting that there may have been periods when history stands alone and unrelated to history. How long did this last, what were the world markets like, was there a large market of something without a good valuation, or very fragile, possibly random, and when and how did sequences reemerge?

2) micro tests — inductive: Another idea is to search for intervening events that altered usual sequences, as in the weather.


Comments

Name

Email

Website

Speak your mind

Archives

Resources & Links

Search