Sunday, February 28, 2010

Mean Reversion



Tech rebound, the news say. Vast armies of savvy investors ready to pitch their dollar for the signs of hope for the next big one.

Reflecting on the 2009 djia. No wonder Goldman had such a spectacular year - the big rebound started in at Mar 06. From 6626.94 rock bottom to 10k dow in mid-October. It could have been a bad year only for illiquid ones. But, let's see what happens now when the bear had arrived. Funny businessweek article. - breed 'em then buy 'em is a great model, but what about moral hazard implications ?

Fluctuating economy. No rock to stand on. The next best things is finding right angle confluence of laminar flows.

The Risiko board game. Growing cultures behind closet doors, the corporate glass gardens. Microcosms of it's own. Additivity taxonomies for base set of random variable statistics. In search of a reference. Covariance - raison d'ĂȘtre of portfolio theory.

Scattered particles filling the void. An empty promise. A glimpse of hope. At least the Liar's Poker is over.