Re: "...markets are fundamentally chaotic, not efficient"?
By that definition, markets, whether for capital or assassins, are distinctly _not_ chaotic*, since most people's decisions [* Unless Life, The Universe, and Everything are really deterministic, but fate has decreed that I don't believe that...] about what stocks to buy/sell, and particularly the timing, are influenced by lots of random events - when they hear what information, whether they were busy doing something else when they heard, whether they'd just blown their disposable income on a new car because that freak windstorm dropped a tree on their car the same week the Post Office ate their car insurance payment, whether Alan Greenspan had a bad pizza the night before the quarterly interest rates came out or too much caffeine before his latest speech....
I don`t really want to get into this discussion/flame war too deeply but I will post on this thread once... Any of the events described above are completely determined by the initial conditions of the system, just because a system is too complex for us to measure its initial conditions in enough detail does not mean it is random, it simply means we see it as random. Hence a market`s behaviour is labeled chaotic, because it appears random. It is, however, completely deterministic however we cannot know the initial conditions because they are too complicated. End of chat, chaotic behaviour is NOT random, it simply appears so unless one can accurately measure the intial conditions. Datacomms Technologies web authoring and data security Paul Bradley, Paul@fatmans.demon.co.uk Paul@crypto.uk.eu.org, Paul@cryptography.uk.eu.org Http://www.cryptography.home.ml.org/ Email for PGP public key, ID: 5BBFAEB1 "Don`t forget to mount a scratch monkey"
market efficiency and chaos are not necessarily mutually exlusive - Igor.
On Fri, Apr 11, 1997 at 06:34:48PM -0500, Igor Chudov @ home wrote:
market efficiency and chaos are not necessarily mutually exlusive
- Igor.
True. Also, there are two kinds of efficiency. The "efficient" in eg, "efficient market hypothesis" is different from the "efficient" in "markets are more efficient than planned economies". -- Kent Crispin "No reason to get excited", kent@songbird.com the thief he kindly spoke... PGP fingerprint: B1 8B 72 ED 55 21 5E 44 61 F4 58 0F 72 10 65 55 http://songbird.com/kent/pgp_key.html
participants (3)
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ichudov@algebra.com
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Kent Crispin
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paul@fatmans.demon.co.uk