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Re: More behavioral finance
Old 10-27-2006, 07:43 PM   #21
Confused about dryer sheets
Join Date: Oct 2006
Posts: 2
Re: More behavioral finance

FFT has no relationship to what I am speaking to. FFT is about signal decomposition into component frequencies and amplitudes. This is physics. The math is linear. Markets do not work that way. The moving window of frequency distribution shows a very organic process that is non-Gaussian over any reasonable time frame that is important to investors. Market are self-referential. This is feedback not sine waves. You are correct - what I am suggesting is not new. Edgar Peters and Benoit Mandelbrot both approach the issue differently. Jesse Livermore talked about it. Charlie Kindleberger studied 300 years of this. I'm taking a different cut at the same basic observation: market participants are different. The issue is not rationality - what is a rational decision for a long-term investor at any moment may not be rational for a trader. One billion shares don't trade on the NYSE because of information efficiency or irrationality. Markets exist to accomodate disparate objectives. That is what BF is all about as far as I'm concerned.


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Re: More behavioral finance
Old 10-27-2006, 08:40 PM   #22
Recycles dryer sheets
Join Date: Apr 2006
Posts: 190
Re: More behavioral finance

That is what BF is all about as far as I'm concerned.
Actually, it's probably about a bunch of guys who thought it would be rich dissertation territory with a low risk of getting blown of the water by someone publishing before the defense.

Best of luck with it, though.

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