Wall Street's Gets an "F" in Geometry


	Wall Street's Gets an "F" in Geometry

blakelylaw

1-2-2009 4:53 PM

127 views

tags:

finance, economy, economics, wall street, fractals, geometry, mathematics

blakelylaw says:

The original article was published in a 1999 "Scientific American." It was recently re-published in light of recent economic events.

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<div style="margin: 12px 0px; font-family: arial; color: #333333; background: #ffffff; border: solid 4px #e5e5e5; width: 100%; clear: left;"><div class="CM_CTB_Content_Wrap" style="margin: 0px; padding: 0px;background-color: #ffffff;"><div style="border-bottom: solid 1px #dcdcdc; white-space: nowrap; margin-bottom: 8px; background-color: #eeeeee ;background-image: url(http://clipmarks.com/images/source-bg.gif); background-repeat: repeat-x; height: 24px; line-height: 24px; vertical-align: middle; padding-bottom: 4px; color: #666666; font-size: 10px;" ><a href="http://clipmarks.com/clip-to-blog/" title="see clips that are hot right now"><img src="http://content.clipmarks.com/blog_embed/35f06c41-3811-4495-a109-d81eaad6ff84/53619E16-CC66-47BE-B761-1238AFD96991/" alt="" width="19" height="19" border="0" style="vertical-align: middle; margin: 0px 4px; display: inline; border: none; float:none;" /></a>clipped from <a title="http://www.sciam.com/article.cfm?id=multifractals-explain-wall-street&print=true" href="http://www.sciam.com/article.cfm?id=multifractals-explain-wall-street&print=true" style="font-size: 11px;">www.sciam.com</a></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.sciam.com/article.cfm?id=multifractals-explain-wall-street&print=true"><H1>How Fractals Can Explain What's Wrong with Wall Street</H1></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.sciam.com/article.cfm?id=multifractals-explain-wall-street&print=true"><H2>The geometry that describes the shape of coastlines and the patterns of galaxies also elucidates how stock prices soar and plummet</H2></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.sciam.com/article.cfm?id=multifractals-explain-wall-street&print=true">A   cornerstone of finance is modern portfolio theory, which tries   to maximize returns for a given level of risk. The mathematics   underlying portfolio theory handles extreme situations with   benign neglect: it regards large market shifts as too unlikely to   matter or as impossible to take into account. It is true that   portfolio theory may account for what occurs 95 percent of   the time in the market. But the picture it presents does not   reflect reality, if one agrees that major events are part of the   remaining 5 percent. An inescapable analogy is that of a sailor   at sea. If the weather is moderate 95 percent of the time, can   the mariner afford to ignore the possibility of a typhoon?</blockquote></div><div style="margin: 0px 6px 6px 4px;"><table style="font-size: 11px;border-spacing: 0px;padding: 0px;" cellpadding="0" cellspacing="0" width="100%"><tr><td style="background:transparent;border-width:0px;padding:0px;">&nbsp;</td><td align="right" style="background:transparent;border-width:0px;padding:0px;width:107px" width="107"><a href="http://clipmarks.com/share/53619E16-CC66-47BE-B761-1238AFD96991/blog/" title="blog or email this clip"><img src="http://content7.clipmarks.com/images/c2b-foot.png" border="0" alt="blog it" width="107" height="17" style="border-width:0px;padding:0px;margin:0px;" /></a></td></tr></table></div></div>

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