-
The Disruptive Active
Disruption is happening all the time. And it will happen in the active investing business too. What is active investing? Anything which starts from intraday trading to mutual funds to hedge funds can be bundled as active investing. Anything which is designed to conserve capital (even if it does not) and deliver absolute returns is…
-
The Short Inverse
Is there was a way to build a portfolio of non-leveraged short positions? This is new territory because industry’s focus on building models for a long-only focused market, but also because short, and long-short enter the alternative or hedge territory, an underrepresented segment globally. The idea of a short index does not exist while the…
-
The Data Universality
Building my case from last time (the fortune index), where I suggested databases should talk to themselves and if natural systems express universal laws like patterns, divergences, seasonality, and constants then the data generated or derived from these natural systems should also express this universality. And if the data also express this universality then the…
-
Nobel’s Interdisciplinary Connections
Somehow my Interdisciplinary mind registered Eugene faster than Fama. After all Eugene Stanley, the father of Econophysics could also get a Nobel. If Psychologists could get the biggest award for Economics, a physicist could have been there too. But then the surprise became bigger, not because it was Fama, not Stanley but because Robert Shiller…
-
The Fortune Index
Data models should work across regions, across nature, across data sets. This means “Data Universality”. If natural phenomenon exhibit universal patterns like geometry, outliers, 80-20 principle, mean reversion, fat tails etc. then the data these natural phenomena generate should also express a similar behavior; actually they do. But we still consider data sets as religious,…
-
Stock Market Science
Why is the stock market not a science? Today many elements of our life have a degree of predictability, consumption patterns, social behavior, earthquakes, etc. However, the predictive measure is lacking when it comes to stock markets. Behavioral finance highlighted this lacking measure and accountability. Even statisticians limit themselves to the prediction of stock market…
-
The Drunkard’s Walk
In 1827, Robert Brown saw a random movement of pollen particles in water. This was called Brownian motion, also the drunkard’s walk. In 1902, Einstein proved this and confirmed the presence of atoms and molecules. This was 100 years after the atomic theory was proposed by John Dalton and was the first attempt to reconcile…
-
Life of an average
Just like we don’t need to understand inflation for it to trouble us, we really don’t need to be able to spell statistics for it to rule us. The realization of an average lifespan could have pushed many saints towards the spiritual path, but for us simple material investors, our life moves around a statistical…
-
Jazz and Trading
Christmas is about making wishes. However, some wishes are not reasonable. For example, wishing for a universal database is wishful thinking, as such a database would need a lot of server space. I am not speaking of a smart stock market database but a database for every organic data from the stock markets to the…
