Posts Tagged ‘Efficient Market Theory’

Memes, Money, Madness

Memes, Money, Madness

Courtesy of Tim’s THE PSY-FI BLOG

New York Subway Train

Meme Machines

The appearance and disappearance of investment themes over time is a fact of life – remember “you can’t lose with the railways”? Me, neither, but in the 1840’s it was a guaranteed winner until it wasn’t.

Other dubious ideas have more legs, like the Efficient Market Hypothesis and the theory that most analysts can figure out which shoe goes on which foot. All of these ideas influence markets and participants and help move prices, sometimes with startling synchronicity. A popular theory of how this happens is based on the idea of the meme, a cultural equivalent of the gene, propagating itself through human brains and influencing group behaviour. So are we meme machines, buying stocks at the whim of transient ideas?

The Selfish Meme

Richard Dawkins introduced the idea of the meme in his book The Selfish Gene : 30th Anniversary edition in which the gene is imagined as a selfish replicator of itself, using the human body as a way of achieving its sole goal of continued existence. The idea of the selfish gene is a metaphor – genes don’t actually behave in mean, grasping and directed ways but the overall effect of natural selection at the genetic level is pretty much the same. By analogy the meme is an equivalent mechanism for spreading cultural ideas, so memes propagate using human brains and have a life of their own.

The idea of memes was elaborated into the broader subject of memetics, the study of how memes actually work. There’ve been lots of popular works covering the subject but the idea is, in fact, curiously hard to get a handle on. At root the memetic approach is an attempt to use Darwin’s Big Idea – that evolution occurs through natural selection and random mutation – to culture and thus argues that culture is itself a complex, adaptive system. This is not uncontroversial.

Econbiology and Memetics

However, the attraction for financial scholars is obvious. There’s a fair amount of work going on in the world of econobiology which also sees the financial ecosystem as a complex, adaptive system altering itself in response to both changes in its environment – interest rates, central bank liquidity, etc – and its internal state – securities prices, investor confidence levels, etc. So it’s not a particularly surprising leap to find that…
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Phil's Favorites

SNAP benefits cost a total of $85.6B in the 2020 fiscal year amid heightened US poverty and unemployment

 

SNAP benefits cost a total of $85.6B in the 2020 fiscal year amid heightened US poverty and unemployment

Some states make it possible to use SNAP benefits at farmers markets. AP Photo/Robert F. Bukaty

By Tracy Roof, University of Richmond

The government spent a record US$85.6 billion on the ...



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ValueWalk

World Bank-Cambridge Study Reveals The Impact Of Covid-19 On Financial Regulators

By Jacob Wolinsky. Originally published at ValueWalk.

World Bank and University of Cambridge report highlights increasing digitalisation of financial services has accelerated the pace of regulatory innovation during Covid-19

Q3 2020 hedge fund letters, conferences and more

The World Bank and the Cambridge Centre for Alternative Finance (CCAF) at the University of Cambridge Judge Business School have today jointly published the results of their Global Covid-19 FinTech Re...



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Zero Hedge

Illinois Gov Ends Indoor Dining Across 2/3rds Of State As Winter Cold Looms

Courtesy of ZeroHedge View original post here.

After imposing tighter restrictions in suburban Cook County and the populous Metro East region (the part of Illinois that includes the suburbs of St. Louis) on Monday, Illinois Gov JB Pritzker has imposed similarly harsh restrictions on the City of Chicago, expanding the number of regions facing the most restrictive measures to 7 out of 11.

Beginning on Friday, indoor dining will be closed along with bar service, and private gatherings will be li...



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Kimble Charting Solutions

Tech Bull Trend Could Change, If A Double Top Is Forming!

Courtesy of Chris Kimble

Is the bull trend in tech about to end? What Tech and its volatility index does in the next few weeks will go a long way to answer this question!

This chart looks at the NDX 100 and its Volatility Index (VXN) on a weekly basis over the past couple of years.

The trend for the NDX remains up/bullish. No price action of late has changed this trend! It tested its September highs two weeks ago, and so far those highs look to have held, formi...



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Biotech/COVID-19

In rural America, resentment over COVID-19 shutdowns is colliding with rising case numbers

 

In rural America, resentment over COVID-19 shutdowns is colliding with rising case numbers

Business restrictions early in the pandemic, when rural towns had few cases, triggered a backlash that haunts them now. Johannes Eisele/AFP/Getty Images

Courtesy of Lauren Hughes, University of Colorado Anschutz Medical Campus and Roberto Silva, University of Colorado Denver...



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Politics

How to track your mail-in ballot

 

How to track your mail-in ballot

Make sure you know when your ballot is arriving, and whether it’s been accepted for counting back at your election office. erhui1979/DigitalVision Vectors via Getty Images

Courtesy of Steven Mulroy, University of Memphis

Many voters who want to participate in the election by mail are concerned about when they’ll receive their ballot – and whether it will get back in time to be counted.

The pandemic has caused interest in ...



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Chart School

Dow Gann Angle Update

Courtesy of Read the Ticker

Time to see what happens to the Dow post US elections.

The Dow Gann Angle Target 3 (from 2007 top) is on the table, and what a ride that will be. The FED went BRRRRR is all the fundamental news you need to know. Gann angles are very good tool to see how the masses are pushing price.


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The last two US elections saw Bitcoin and the DOW rally well for 6 months, due to stimulus. The most bearish 2020 US Election case for the markets is a Biden win with the Senate and Congress controlled by the Democrats, somehow this blog feels that is very unlikely. So what could go wrong!


...

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Digital Currencies

Bitcoin: the UK and US are clamping down on crypto trading - here's why it's not yet a big deal

 

Bitcoin: the UK and US are clamping down on crypto trading – here's why it's not yet a big deal

Where there’s a bit there’s a writ. Novikov Aleksey

Courtesy of Gavin Brown, University of Liverpool

The sale and promotion of derivatives of bitcoin and other cryptocurrencies to amateur investors is being banned in the UK by the financial regulator, the Financial Conduct Authority (FCA). It is a...



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Mapping The Market

COVID-19 Forces More Than Half of Asset Management Firms to Accelerate Adoption of Digital Marketing Technology

By Jacob Wolinsky. Originally published at ValueWalk.

There is no doubt that the use of technology to support client engagement initiatives brings both opportunities and threats but this has been brought into sharp focus this year with the COVID-19 pandemic.

The crisis has brought to the fore the need for firms to enable flexibility in client engagement – the expectation that providers will communicate to clients on their terms, at their speed and frequency and on their preferred channels, is now a given. This is even more critical when clients are experiencing unparalleled anxiety from both market conditions and their own personal circumstances.

...

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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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Promotions

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Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

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