About the book.

 

Preface

I started my career as a capital market researcher on 9 June 2000. This book summarizes 20 years of my work and the one problem I identified and set out to solve. The fruit basket paradox as I called it during the MIT Fintech Program, earned me a top rank but left me with more questions than answers. There were a few things I knew before I enrolled in the program. First; Modern finance or investment management as we call it, the industry that manages money, and sometimes our pension was clueless about how to earn more than the market, which sometimes moved randomly like a lost beetle and sometimes seemed sure of itself. In both cases, the investment management industry trailed the market, was using Stone Age tools, and rarely showed the promise of intelligence. Second; Markets offered a complex problem, which could not be solved by the current Science as it suffered from a replication crisis and many times lacked the courage to have higher aspirations. Third; Solving the problem, was somewhere like understanding Nature, a step at a time. Nature allowed insights into how it worked intelligently but sometimes required a pincer grip to scale one of the infinite facets of the mountain called nature.  Science needs this rock climbing spirit to step out of its cargo cult status and impact the world if it has to progress faster than one funeral at a time. As an outsider, first operating from Mumbai, then from Transylvania, and currently from Toronto, I had the greenhorn’s courage, to ask the questions, challenge the statuesquo, and take my chance with serendipity to make a scientific impact on the world, which was burning with war, firestorms and madness of crowds.

The fruit basket paradox is a basket problem, a basket to fill up and consume. But as an economic man, there are limited resources, hence the need for a choice, what to fill the basket with, how to select optimally, how to consume efficiently, and reduce waste. At the heart of the fruit basket lies the value and the desire to maximize the value. Most economic choices involve three things, what to select, how much to select and how long to hold before consumption so that the value of the basket is maximized and it is replenished over finite periods over a lifetime or multiple generations. As simple as this may sound, it is a paradox because with all the Science in the world, society has failed to make optimal choices, driving extremities and imbalances which continue to threaten our existence as a civilization, be it climate or capitalism. Society has failed to show intelligence in the selection, proportion, and how long to hold on to a choice, to allow the sapling to become a tree. Human beings are stuck at the extremes of instant and delayed gratification unable to reconcile the two, allowing the waves of nature to validate or destroy a decision, and like flotsam take it up, bring it down. Despite all the progress, we are in some senses, back to where we started and even if the impending depression and consequent hyperinflation does not exert itself soon, we have a lot to do to repair the character of society before we adapt to the calamities of nature.

Solutions are not discovered, most of the time you stumble into them. They never appear standing taut, one has to look, tinker, experiment, research and develop a sense of what the solution could be. In my case, the simplicity of the problem and audacity of thinking of a solution worked well together. The problem was to determine “When” to buy or sell and the solution was Time. The first 10 years of my research were spent on structures, concepts, theories, history, tools, and science. The last 10 years were spent on understanding Time, its structure, architecture, mathematics, and probabilistic nature. I got emboldened, when like a child, I had the “emperor is naked” moment, publishing a paper, challenging one of the biggest mathematicians of our time, Benoit Mandelbrot. The challenge was simple. Mandelbrot said, “there was no law, there was only geometry”. My claim was that nature’s geometry is driven by the geometry of Time. This is as revolutionary as it sounds and I am prepared to stake my claim, even if it is for posterity.

The architecture of Time changes everything for society because it changes space-time, it is the key to unlock Nature. Anticipation is just a derived benefit. For a hypothetical moment assume time to be architectural. The building of “When” gives society something more than beating the market and making money. The building of “When” allows one to navigate into the past and future. This  book lays down a historical context spread across philosophy, history, mathematics, statistics, physics, economics, finance, psychology, and technology to explain how Nature intelligently manipulates the structure of Time, to replicate and regenerate. Ways of nature are the easiest path for us to evolve as a species.