[psychohistory] (fwd)

[Jim Choate]

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           Before a larger group can see the virtue of an idea, a
           smaller group must first understand it.

                                           "Stranger Suns"
                                           George Zebrowski

       The Armadillo Group       ,::////;::-.          James Choate
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---------- Forwarded message ----------
Date: Fri, 5 Jan 2001 03:06:26 +0200
From: George Pappas <vagelford at yahoo.com>
Reply-To: psychohistory at egroups.com
To: psychohistory at egroups.com
Subject: [psychohistory] 

Here is a mail I received and I think will interest the group :

STOCK MARKET: FOLLOW THE LEADER
To make money in the stock market, you have to understand risk.
Physicists have been using statistical physics methods to analyze
markets in order to better understand market risks, such as the
probability that a large shift in market value will occur during a
year-long interval. Real markets have a higher probability of
experiencing large changes than conventional "pure chance" would
predict, and econophysicists have suggested many schemes to explain
this fact. The latest idea, reported in the 25 December PRL, points
to the "herding behavior" for which traders are famous. The authors
describe a simple computer model where information networks grow
randomly until entire "clusters" of traders act on the news and then
wait for the next "rumor mill" to grow. The model predicts price
fluctuations similar to those of real markets.
(V. M. Egu‘luz and M. G. Zimmermann, Phys. Rev. Lett. 85, 5659.
COMPLETE Focus story at http://focus.aps.org/v6/st28.html
Link to the paper: http://publish.aps.org/abstract/PRL/v85/p5659/)

Attempts like that one could create a good basis for the development of a theory of psychohistory.

Vagelford
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