Zeev How about a small change? Replace "hoping" with "knowing" Without that change then there would be no sane reason to stay short and a cover would be required now.
Translation: If I did not know that $BPCOMPQ would return to 45, then a cover must take place right now.
*** Prediction: The future of the USA stock market ***
Hi Zeev,
Admittedly, being beyond my plane of conscious understanding, Sornette's paper seemed to me to be 'right up your alley' while adequately fulfilling the requisite academicism's disdain for excessive verbiage.
Obviously a dood who doesn't get paid by the word...... <G>
The link below links to some of his past predictions which also eluded my comprehension. I best stick to gold. LOL!
Would appreciate any thoughts, comments, or translations you might care to share with us normal folk. <VBG>
Prediction: The future of the USA stock market Prediction Date: April 18, 2003
Based on a theory of cooperative herding and imitation working both in bullish as well as in bearish regimes, we have detected the existence of a clear signature of herding in the decay of the US S&P500 index since August 2000 with high statistical significance, in the form of strong log-periodic components.
Please refer to the following paper for a detailed description: D. Sornette and W.-X. Zhou, The US 2000-2002 Market Descent: How Much Longer and Deeper? Quantitative Finance 2 (6), 468-481 (2002) (e-print at http://arXiv.org/abs/cond-mat/0209065).
For a general presentation of the underlying concepts, theory, empirical tests and concrete applications, with a discussion of previous predictions, see Why Stock Market Crash?.
This figure shows 8 years of the evolution of the Japanese Nikkei index and 7 years of the USA S&P500 index, compared to each other after a translation of 11 years has been performed. The years are written on the horizontal axis (and marked by a tick on the axis) where January 1 of that year occurs. This figure illustrates an analogy noted by several observers that our work has made quantitative. The oscillations with decreasing frequency which decorate an overall decrease of the stock markets are observed only in very special stock markets regimes, that we have terms log-periodic ``anti-bubbles''. By analyzing the mathematical structure of these oscillations, we quantify them into one (or several) mathematical formula(s) that can then be extrapolated to provide the prediction shown in the two following figures.
Fig. 1 shows the predictions of the future of the US S&P 500 index performed on Aug.24,2002. The continuous line is the fit and its extrapolation using the super-exponential power-law log-periodic function derived from a first order Landau expansion of the logarithm of the price. The dashed line is the fit and its extrapolation by including in the function a second log-periodic harmonic. The two fits are performed using the index data from Aug.9,2000 to Aug.24 2002 that are marked as black dots. The blue dots show the daily price evolution from Aug.25,2002 to Apr.18,2003. The large (respectively small) ticks in the abscissa correspond to January 1st (respectively to the first day of each quarter) of each year.
Fig. 2 shows the new predictions of the future of the US S&P 500 index using all the data from Aug.9,2000 to Apr.18,2003, illustrated by (continuous and dashed) black lines. Again, the continuous line is the fit and its extrapolation using the super-exponential power-law log-periodic function derived from the first order Landau expansion of the logarithm of the price, while the dashed line is the fit and its extrapolation by including in the function a second log-periodic harmonic. We also present the two previous fits (red lines) performed on Aug.24,2002 (shown in Fig. 1) for comparison, so as to provide an estimation of the sensitivity of the prediction and of its robustness as the price evolves. The blue dots show the daily price evolution from Aug.9 ,2000 to Apr.18,2003. The large (respectively small) ticks in the abscissa correspond to January 1st (respectively to the first day of each quarter) of each year.
In mid-January 2003, we proposed an extension of our previous log-periodic power law model of the ``anti-bubble'' regime of the USA market since the summer of 2000, in terms of the renormalization group framework to model critical points. We are thus able to accurately model the five ``crashes'' that punctuated the overall market descent since August 2000 in a fully consistent way with no additional parameters (actually with one parameter less than the most parsimonious formula used previously).
Please refer to the following paper for a detailed technical description and for more detailed results: W.-X. Zhou and D. Sornette, Renormalization group analysis of the 2000-2002 anti-bubble in the US S&P 500 index: Explanation of the hierarchy of 5 crashes and Prediction (eprint at http://arXiv.org/abs/physics/0301023).
Fig. 3 shows the predictions of the future of the US S&P 500 index applying the so-called ``zero-phase' Weierstrass-type function. The continuous black line is the forward prediction using all the data from Aug.9,2000 to Apr.18,2003, while the dashed black line is the past prediction using the data from Aug.9,2000 to Aug.24,2002. Both lines are reconstructed and extrapolated from the fits using a six-term zero-phase Weierstrass-type function. We also present the two previous fits (red lines) performed on Aug.24,2002 (shown in Fig. 1) for comparison. The blue dots show the daily price evolution from Aug.9,2000 to Apr.18,2003. The large (respectively small) ticks in the abscissa correspond to January 1st (respectively to the first day of each quarter) of each year.
To view the author's bio or review his past predictions:
For those interested, I've added a little material to the Zeev's Ideas Board (#board-1351). Zeev, is, I believe, busy preparing for an important family event.
I'm curious, would you characterize this as a potential breakthrough or is it something you could have have learned in pre-physics class?
Was going to send this to you via PM, but then thought there may be some here who might also be interested.
Hopefully, you'll favor us with your thoughts on this when time allows for you to do so. TIA.
Sorry about the excessive verbiage, but you know how those scientific reporters tend to stretch things out..... <VBG>
Take water and potash, add electricity and get - a mystery By Robert Matthews, Science Correspondent (Filed: 18/05/2003)
British researchers believe that they have made a groundbreaking scientific discovery after apparently managing to "create" energy from hydrogen atoms.
In results independently verified at Bristol University, a team from Gardner Watts - an environmental technology company based in Dedham, Essex - show a "thermal energy cell" which appears to produce hundreds of times more energy than that put into it. If the findings are correct and can be reproduced on a commercial scale, the thermal energy cell could become a feature of every home, heating water for a fraction of the cost and cutting fuel bills by at least 90 per cent.
The makers of the cell, which passes an electric current through a liquid between two electrodes, admit that they cannot explain precisely how the invention works. They insist, however, that their cell is not just a repeat of the notorious "cold fusion" debacle of the late 1980s. Then two scientists claimed to have found a way of generating nuclear energy from a similar-looking device at room temperature. The findings were widely challenged and the scientists, Martin Fleischmann and Stanley Pons, accused of incompetence, fled America to set up labs in France.
"We are absolutely not saying this is cold fusion, or that we have found a way round the law of energy conservation," said Christopher Davies, the managing director of Gardner Watts.
"What we are saying is that the device seems to tap into another, previously unrecognised source of energy."
According to Mr Davies, the cell is the product of research into the fundamental properties of hydrogen, the most common element in the universe. He argues that calculations based on quantum theory, the laws of the sub-atomic world, suggest that hydrogen can exist in a so-called metastable state that harbours a potential source of extra energy.
This theory suggests that if electricity were passed into a mixture of water and a chemical catalyst, the extra energy would be released in the form of heat.
After some experimentation, the team found that a small amount of electricity passed through a mixture of water and potassium carbonate - potash - released an astonishing amount of energy.
"It generates a lot of heat in a very small volume," said Christopher Eccles, the chief scientist at Gardner Watts.
The findings of the Gardner Watts team were tested by Dr Jason Riley of Bristol University, who found energy gains of between three and 26 times what had been put in.
In a written report, Dr Riley concluded: "Using the apparatus supplied by Gardner Watts and the procedure of analysis suggested by the company, there appears to be an energy gain in the system."
In tests performed for The Telegraph, the cell heated water to near-boiling, apparently producing more than three times the amount of energy fed into it.
Scientists admit to being astonished by the sheer size of the energy increase produced by the cell. "I've never seen a claim like this before," said Prof Stephen Smith of the physics department at Essex University.
"In the case of cold fusion, people talked about getting a 10 per cent energy gain or so, which could be explained away quite easily but this is much too big for that."
Prof Smith said he was sceptical about the theory put forward by the company. He conceded, however, that scientists had also been baffled by the source of energy driving radioactivity, as the key equation involved - Einstein's famous E=MC2 - had yet to be discovered.
According to Prof Smith, if there is a flaw in the company's claims, it lies in the measurement of the amount of electrical energy pumped into the cell. It is possible that, as sparks pass between the electrodes, there is an energy surge which would not be picked up by the instruments measuring the electrical input.
Prof Smith said: "This needs to be very carefully checked, as there could be far more energy going in than the makers think."
Prof Smith's views were echoed by Dr Riley, who said: "There's no doubt that there was a heat rise but I'd like to see a more thorough investigation of the electrical energy supplied into the cell."
While many scientists are trying to solve the mystery of the thermal energy cell, its huge commercial potential has already caused interest.
Cambridge Consultants, one of Britain's most prestigious technology consultancies, has teamed up with Mr Davies and his colleagues to develop a working prototype. "We've had a multi-disciplinary team working on this, and we're perplexed," said Duncan Bishop, head of process development at Cambridge Consultants.
"We are offering to risk-share on it, as it will need about £200,000 to prove the principle behind it."
According to the Gardner Watts team, it will take about six months to carry out tests putting the reality of the effect beyond all doubt. The company then plans to develop a prototype capable of turning less than one kilowatt of electrical power into 10 kilowatts of heat.
Mr Davies said: "The technology could be licensed by a company making household boilers for the domestic market. " He added that the plan is to have the first thermal energy cell devices on the market within two years.
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