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Big issue this.
So, essential to know the facts.
Lots of misleading stories out there.
So, essential to know the facts.
Lots of misleading stories out there.
Part 2 here.
Here's a good place to start, scroll down to the video interview between John Authers, then at the FT, and Benoit Mandelbrot, the mathematician (father of Fractals) who discovered the flaw in the efficient markets hypothesis 60 years ago. https://paulclaireaux.com/adviser-understand-risk/
A great deal of the 'theory' of investment risk, rests on a 'Theory of speculation' written around 1900 by a French Mathematician, Bachelier.
The trouble is, he didn't have ANY evidence for his theory!
The only way to make it work is to hide troublesome reality under the carpet!
The trouble is, he didn't have ANY evidence for his theory!
The only way to make it work is to hide troublesome reality under the carpet!
Nottingham business school even wrote an amusing paper, (might we say poking fun at?) the CIO of Goldman Sachs about this naive theory of markets after 2009.
More here https://paulclaireaux.com/the-bankers-standard-deviations/
More here https://paulclaireaux.com/the-bankers-standard-deviations/
And given that we've known about the flawed theory of stock market price moves for 60 odd years - and were reminded about them again in 1999 and 2009...
Isn't it time the investment industry-accepted reality?
Isn't it time the investment industry-accepted reality?
Market moves are unpredictable but they do NOT follow a 'normal' random distribution.
The size of Market price moves follows a power law.
Similar to earthquakes.
What's more, like earthquakes, the big moves tend to cluster.
That's all we know.
End of thread
The size of Market price moves follows a power law.
Similar to earthquakes.
What's more, like earthquakes, the big moves tend to cluster.
That's all we know.
End of thread
