Societal quest for value is continuous, repetitive, similar, connected with cooperation and patterned.

I don’t know who is better, Clint Eastwood or Rajkumar Hirani. I saw two back to back films, one was ‘3 idiots’ on Thursday and Friday it was ‘J Edgar’. Though this non confirms my (self proclaimed) film buff status, I took a while to catch up on the top grossing cinema creations. Blockbuster or award winning films force you to think, relate and see patterns irrespective of the settings, regional or global.

The search or quest for value has started to emerge out of the societal expression, be it films, books or protests. Whether it was Chetan Bhagat’s famed work, a Bollywood adaptation or Eastwood and DiCaprio’s attempt to educate Americans and the world about the workings of FBI and science of investigative innovations, there is a visible creative attempt to cherish the value of history and acknowledge purposeful life over corporate rat race.

The continuity of value…Value expressions have continuity because revolutions happen, creative expressions are awarded and history prospers, as we keep revisiting it. A failed present and murky future outlook keeps sending the society back to the past, to seek lessons from the valuable old. This ‘value revisiting’ also creates science as we keep refining our value measuring systems. Edgar insisted on a centralized finger prints depository to enhance investigation. What seemed ridiculous then turned out to be a necessary innovation.

The continuity of value can also be witnessed in the similarity of times…

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Author: Orpheus | Date: 27 January 2012 | Comments (0)

Categories: Patterns and Proportions, Time Triads

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Do you know how many times you use “Probably” in a day? The word is a part of our colloquial expression because society embraces uncertainty, disorder and randomness as natural. Whether it’s a rolling die, a tossing coin, or an event, uncertainty is everywhere. This is why the society believes that a butterfly’s wings in Brazil can set off a tornado in Texas.

But mathematicians have illustrated a very contrary certainty again and again, the certain pattern of randomness. Imagine a robotic beetle placed in a twisting tube. The creature executes an infinite random walk by walking forever as it moves randomly one step forward or one step back in the tube. Assume that the tube is infinitely long. What is the probability (chance) that the random walk will eventually take the beetle back to its starting point?

In 1921, Hungarian Mathematician George Pólya proved that the answer is one – infinite likelihood of return for a one dimensional random walk. If the beetle were placed at the origin of a two – space universe (a plane), and then the beetle executed an infinite random walk by taking a step north, south, east, or west, the probability that the random walk would eventually take the beetle back to the origin is also one.

Let me take you through some more random patterns which has intrigued mathematicians for ages. Parrondo’s Paradox. In the late 1990’s, Spanish physicist Juan Parrondo showed how two games guaranteed to make a player lose all his money can be played in alternating sequence to make the player rich….

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Author: Orpheus | Date: 17 January 2012 | Comments (0)

Categories: Patterns and Proportions, Time Triads

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Some problems span multi generations, Benoit Mandelbrot solved one such problem and earned himself a well deserving place in history, as the father of fractals.  Many of these mathematical structures and their descriptions go back to classical mathematics and mathematicians of the past like Cantor, Peano, Hilbert, Koch, Sierpinski, Julia, Hausdorff, but it was Mandelbrot who extended the early topology. Fractals solve the problem of how to organize complicated structure in an efficient way. Of course this was not what Peano and Hilbert were interested in almost 100 years ago. It was only after Mandelbrot’s work that the omnipresence of fractals became apparent.

Mandelbrot was a visionary in his ability to connect mathematics and patterns. He too like many other great thinkers worked on ideas of aggregation, simplification, order, efficiency rules, cyclicality in errors, interconnectedness of nature through geometrical structures. Mandelbrot illustrated that very simple formulas can generate objects that exhibit an extraordinary wealth of structure. His work encompasses mathematics, physics, economics and diverse other fields of physical and social sciences, music and art. He died on 14 Oct at the age of 85 after suffering from pancreatic cancer.

Time Triads, Time Fractals, Time Arbitrage, Performance Cycles are terms coined by Orpheus Research. Time Triads is our weekly market letter. The report covers various aspects on TIME patterns, TIME forecast, alternative research, emerging markets, behavioral finance, market fractals, econohistory, econostatistics, time cyclicality, investment psychology, socioeconomics, pop cultural trends, macro economics, interest rates, derivatives, money management, Intermarket trends etc.

This article is written for Alrroya

Author: Mukul PAL | Date: 17 October 2010 | Comments (0)

Categories: Fractals

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National Aeronautics and Space Administration
Sunspots

A J Tchijevsky’s excitement cycles, reopens the debate of Time.

The success in the new age is a lot different from what we experienced 11 years back. The shy public which needed market research surveys to bring out feedback is keener to offer comments. There were 30 odd comments on the Oil forecast, 398 comments on a dirty sport tackle on the yahoo sports blog and 425 comments on the 13 year old Everest climber. Are we in excited times? Or do you think we as a society are a bit less excited than what we were a few years back? Do these times polarize us as a society? Do we become indifferent? Is there some way we can quantify excitement? Can this quantification help us forecast? Can it tell us before our odds of success or failure? Can it tell us how to plan our investments and life? Can it tell us what movies to make? What products and business to launch? Does this excitement ever fall? Simply we are asking ourselves is excitement cyclical? And if it is cyclical, is cyclicality a science? But before we come to the science part, how time cycles are measurable and how it can revolutionize our understanding of the world around us, let’s have a closer look at excitement.

In December 1926, at the annual meeting of the American Meteorological Society Professor A J Tchijevsky’s (researcher at Astronomical Observatory, Institute of Biological Physics, Archeological Institute, Moscow) paper was presented, which elaborated the index of Mass human excitability, 500 B.C. – A.D.1922. This index showed a consistent pattern of 9 waves of excitability per century over the entire span of 2422 years. The index was compiled from detailed statistical researches in the histories of 72 countries and nations of the world.

Tchijevsky found not only that this index was characterized by the 11.1 year cycles, but that the crests of these cycles tended to correlate with crests of sunspot cycles. “In the paper published in the Cycles magazine of Foundation of Cycles 1968 issue professor quotes” As soon as the sunspot activities approaches its maximum, the number of important mass historical events, taken as a whole, increases, approaching its maximum during the sunspot maximum and decreases to its minimum during the periods of the sunspot minimum. Each cycle is divided into four periods. Minimum of excitability (3 years), Growth of excitability (2 years), maximum of excitability (3 years), decline of excitability (3 years).

Over nearly a hundred years since the research was published, a few things have changed. In the extreme point of the cycle’s course, the tension of the all human activity falls to the minimum, giving way to creativity and a general decrease of military or political enthusiasm, by peace and peaceful creative work and a disintegration of masses. The last sunspot cycle started in 1998, peaked in 2000 and bottomed in 2009. The society emerges out of excitability lows.

Now this is where the observations begin. The human excitability is at a 11 year low and we are in a few years of growth and prosperity. This might sound surprising and contrary to popular belief that we are in for a double dip recession. Excitability cycles tell us that from the lows in 2010, a multiyear equity bull should emerge. But there are strange coincidences here? Excitability cycles are not only in sync with sunspot cycles but also with a decade long Clement Juglar cycles.

The scientists say, don’t show me cycles and patterns coincidences everywhere. Show me the proof. Even professor Tchijevsky’s work did not get so much popularity as few could explain why excitability index was leading the sunspot cycles by an average 12 months. At some stage of thinking cyclists wondered that there was a force that affects both human beings and sunspots simultaneously. Proving why periodicity happened takes time cycle analysis to a scientific level.

Scientific rationalism against Time can be sticky ground. Specially because there is a lot more than empirical proof out there which suggest that time is mathematical and ordered, the reason for the coincidences, sunspots, growth etc. The first proof is History itself. Though the society uses the cliché that ‘history repeats’, it never asks is repetitive history not periodicity, recurrence in time, time cyclicality? Other clichés like ‘space and time are unruled by any law’ interferes with the truth. The whole idea is that if Einstein could not understand time, who can? History was always considered knowledge not science. Karl Lamprecht, German Historian showcased the order, history’s practical purpose was always considered doubtful. How naive of us.

Time is exponential and it is the one which gives nature and society its cycles. Periodicity and recurrence happens in society and stock markets because of this order. Time is why everything natural is cyclical, even human excitement. We can connect Sun with excitement or anything else, our behavior as a society is predictable. It was too much of a truth then when Professor Tchijevsky was jailed. How much of it is a truth now? We will see.

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Author: Mukul PAL | Date: 24 May 2010 | Comments (0)

Categories: 2012 and Beyond, Patterns and Proportions

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I was at an entrepreneurship workshop conducted by Peter B. Zaboji. Peter was a professor at Insead and also a corporate restructuring expert. He turned around a loss making company with 10,000 people taking Tenovis to management case books. Peter’s aim was to implant the entrepreneurship fire in his audience and assist entrepreneurs with a road map towards private equity. Peter came with an elite list of speakers. Piroska Zoli (a silicon valley netpreneur) and Imre Hild (a financial innovator from Hungary) were two of the seven speakers.

Ideas and cases

Coming from an economic background I could relate more to Imre’s idea. He found an opportunity selling LARE (Life Annuity for Real Estate) to a selected Hungarian audience. LARE is now a part of OTP (Hungarian Bank). Imre saw the opportunity, a need for a financial instrument for war widows, who had no one to hand over their real estate assets and hence the need to commoditize it in their life. For a fixed annuity, the widows would sell their land to the bank. The idea pushed Imre in the list of successful financial innovators for the region.

Peter consistently emphasized on looking at the glass half full rather than the half empty highlighting the marketing genius of Dietrich Mateschitz, an Austrian entrepreneur. During his visit to Thailand in 1982 he discovered that Krating Daeng (a local drink) that helped to cure his jet lag. Red Bull was born.

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Author: Mukul PAL | Date: 29 April 2010 | Comments (0)

Categories: Patterns and Proportions

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Time Triads recreating head and shoulder fractals is a step closer to rewriting the Elliott Wave Theory.

We have talked about head and shoulder on prior occasions. We have also mentioned that time is a head and shoulder. The time pattern was first illustrated by Tony Plummer in his book. Plummer mentioned that a stylized pattern of time was a good example of fractal geometry.

Tony Plummer’s Stylized Time Pattern

He did not give a formal pattern proof of creation for the stylized pattern. Where did the stylized pattern come from? How could it be seen across time frames? And how was it fractalled?

Orpheus Introduces TIME TRIADS

Here we have taken the Orpheus Time Triad unit and reworked on it to create the stylized pattern Plummer first illustrated in his book. The stylized pattern looks like a head and shoulder. Time Fractals, Time Triads, Time Arbitrage, Econohistory, Performance Cycles are terms coined by the author in Jan 2009.

The idealized time triad structure is made of equilateral triangles. There are three equilateral triangles, making a larger triangle and so on. Time subdivides in three and multiplies in three. What is with the formation? First and foremost: Head and Shoulder are three peaks, a large peak centered around two smaller peaks. Head and shoulder pattern is the time triad i.e. three triangular peaks. Did you ever think why a day has four prices, the open, the high, the low and the close? We just take it as standard. Ok! it does look logical to have the O-H-L-C, but the interesting part is how this classification divides the trading session into three parts. There is a part with the open and high, high and low, low and close. The three triangles of head and shoulders are there. Market literature is full of pattern ideas from human anatomy. It’s not that just chance that we find similar patterns in markets like we find in human anatomy. We find head and shoulders in markets just like we see it in human body is because time touches anatomy, the same way it transforms price.

Nature unlike markets doesn’t just move in the first Cartesian quadrant with positive x and y axis values. Nature moves in all dimensions, in free space. Fabian Helge von Koch (1870 – 1924) was a Swedish mathematician who gave his name to the famous fractal known as the Koch snowflake, one of the earliest fractal curves to be described. The Koch snowflake (or Koch star) is a mathematical curve and one of the earliest fractal curves to have been described. It is based on the Koch curve, which appeared in a 1904 paper titled “On a continuous curve without tangents, constructible from elementary geometry”. The Koch curve starts from a Triangle and in the second iteration divides each side of the triangle into a head and shoulder form. The iterations are repeated and this creates the Koch curve. Koch curve is a zooming head and shoulder bombarding in your eyes like a moving spatial star field.

The Head and shoulder pattern can even rewrite the Dow Theory and even explain the Elliott Theory. Elliotticians are known to famously quote that there are few rules in markets, mainly the EWT (Elliott Wave Theory) works on guidelines. The only two rules in the long standing Elliott Theory is that the 3rd wave is never the shortest of the three impulsing waves 1, 3, 5. What Elliott unknowingly said was that the three up legs in a five legged market structure have a bump or a head, simply putting the middle part of a market fractal is larger than the other two. The 3rd is never the shortest because of the Head and Shoulder. The pattern of time rules the Elliott fractal. There is another rule of Elliott that the 2 wave does not make a new low below the low of 1. The head and shoulder pattern of time also makes higher lows and not lower lows. A higher degree of time does indeed make more significant lows than its small degree counterparts.

So what did we do with the Time triads? We gave the smallest triangle a size of 1 unit (X). 3 units made a larger triangle (3X) and nine units made the larger triangle (9X). At all times these unit lengths are adding or subtracting. Assuming there is no translation. That is largest time is not effecting the smaller time. Putting simply the bear market is the same in potential and scope as the bull market, the markets will behave ideally, losing all the gains it made, a classic cycle.

Doing an aggregation of three degrees viz. X, 3X and 9X, we reached the Head and shoulder pattern. And as we added a higher degree head and shoulder fractals started to form.

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Author: Mukul PAL | Date: 14 March 2010 | Comments (1)

Categories: Fractals, Patterns and Proportions, Time Triads

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