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Lobster, Actually, the market price is more like a median value than an average of the distribution. If the stock is at $100 and one the shareholders changes their opinion of the price from $110 to $120, the market price will remain unchanged. If one takes the cumulative shares of price...

nitro, That is another area where Penrose is mistaken. My wife has studied cognition and creativity in inventors and scientists (she's not looked at mathematicians, so maybe they have quantum mechanical brains). The "Eureka" moment of discovery is a misperception. If one studies the lives...

KymerFye, Yes, long-term biological evolution certainly contributed much to intelligence. Yet a newborn creature is a remarkably blank slate. If that newborn is not allowed to interact with the world, it will never develop the nifty cognitive skills that we call intelligence (or even basic...

KymerFye, Hmmmm.... an artificial fruit fly.... I suspect that one would need an Apple computer for that project.:D But you are probably right about the challenges of simulating a fly. The visual system of the fly is pretty sophisticated. It runs at frame rate of about 400 Hz in...

Although I agree that we do not yet know how the brain works, we need not resort to mystical or quantum mechanical mechanisms to explain intelligence and consciousness. People like Penrose fall into the trap that because the functioning of the brain is highly complex, that implies that the...

Both lotto picks are equally likely to win, but one of you may have a higher expected payout based on the number of people you have to share the prize with. I remember some research on people's tendency to prefer certain numbers over others in picking lotto numbers. The upshot is that if...

Bankedout, "Creme of the crap" was no typo. Sometimes I think that the best that today's investor can do is to diversity across the least-worst of a wide array of bad alternatives (a choice between very low returns or very high risks). As a trader I do think it is useful to understand the...

Bankedout, What makes the economy feel like a house of cards to me is the animal spirit nature of confidence. What makes consumers confident enough to buy rather than conserve? What makes businesses confident enough to invest in upgraded facilities, training, new products, etc.? What makes...

Answer: they are buying over-priced real estate that will drop in value once interest rates go up or credit tightens on fears of increasing defaults on mortgages.

harrytrader, That's a very nice explanation of a central bank system based on fiat money. I have a few comments that I'd like to throw into the mix. Paying Off the National Debt: I'm not sure why can't the government pay off its debt in your example? Say this little community decides...

When I saw the thread's title I thought somebody was touting HO on some pump-n-dump scheme. I was already to buy or short a few thousand shares when I found out the symbol didn't exist.:( Then I looked inside and found all these wonderful holiday greetings.:) Anyway, happy holidays and a...

1. Snide comment: MSFT will gladly absorb every CPU cycle and byte of memory that you throw at them. Do computers of today really feel that much faster than those of yesteryear (except in being able to handle multimegabyte image files) 2. Low value applications rule: Cheap computing and...

One more point that speaks to the hongshu's example of Gates not having to worry about the price of MSFT. Sometimes the debt instruments used by a company have a stock-price related repayment triggers. Debtholders or banks can demand immediate repayment if the company looks like it is in...

I wonder if ET (= Baron) could someday create a running indicator of trader's sentiments? I'm envisioning a running poll in which each ET member can vote each day on sentiment. The 24-hour rolling numerical average value from the poll would appear on the home page with a link to a "Details"...

EBAY is a great example of a stock owned by people who like the company and could not care less about traditional approaches to stock valuation. YES, the company is doing great compared to all the dot-com failures. YES, the company has a killer business model in only handling the near...

Being in the middle of such a challenge, I cannot tell you exactly how it will turn out. But, I can share some interim observations. One lesson, for me, is that systems can go weird in ways that do not involve a drawdown. In my case, my system stopped generating the profits that it was...

Some would say that those that trade Mutual Funds get to trade the middle of the chart. Unfortunately, most funds have caught on to this and discourage people who try to trade funds too actively.

jmcgraw, That was a really fun challenge!:) And using the amazing power of hindsight I can see how I missed the two answers that I did. Now if I only had a way to get hindsight before I trade.....:D Couple of suggestions for making the next contest even more realistic (even harder)...

vladiator, Your strong evidence of reversion in random price data definitely gave me a laugh. Hmmm.... Sounds like you have found a delightfully contrarian random number generator. The literature is full of examples of the horrible non-random behavior found in many off-the-shelf random...

Did quickie autocorrelation study of the H-L range. It suggests that: Real: 3, 5, 8, 9, 10 Random: 1, 2, 4, 6, 7 I'm least confident about #4 and #10. BTW, If you want to create more "realistic" random price data, I'd suggest some sort of ARCH or GARCH model to add in...