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The tightrope of the random walk
We’re really interested in markets, but we’ll start with a series of coin tosses. If the coin lands heads, then we go up one; if it lands tails, we go down one. Figure 1: A coin toss path.Figure 1 is...
View ArticleBoris The Banker explains efficient markets
Amy Anyone: What is EMH? Boris The Banker: That’s the Efficient Market Hypothesis, or sometimes the Efficient Markets Hypothesis. Amy: What’s that? Boris: It says that all available and relevant...
View ArticleFinancial instability
Instability in the economy seems to be the zeitgeist of the week. Counter-intuitives Science Daily has a story on a mathematical model of extinction. Apparently a key finding is that the most effective...
View ArticleMarket beliefs
Friday was a day to fool others. Every day is a day to fool ourselves. Primed to know The video gives a great example of how knowing what to expect makes the expectation come true. The entire 13.5...
View ArticleMarket efficiency versus stability
Mark Buchanan has a piece on Bloomberg called “Sand in the machine the key to stable markets”. This is an introduction into the idea that market efficiency is at odds with market stability. A couple of...
View ArticleEfficient Atmospheres Hypothesis
Mark Buchanan in The Physics of Finance has another great post called “Of hurricanes and economic equilibrium”. The Efficient Market Hypothesis has been beaten up quite a lot lately, but this is quite...
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Review of “Models. Behaving. Badly.” by Emanuel Derman
Why confusing illusion with reality can lead to disaster, on Wall Street and in life. Note that the cover is more clever than you might at first notice. Ceci n’est pas une pipe. You might also have a...
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