The doomed outlier

A friend took me out for coffee and gifted me Gladwell’s outlier at the 2009 bottom. “This is dedicated to your doomed outlier”. During those murky times the negative outliers were moving to positive polarity (worst stocks were becoming potential outperformers). Three years later and many outliers later, Gladwell’s lucid narrative on history of success started shinning bright in my heap of books. It was time for me to read it and explore the connection between price performance and success.

For Gladwell success was being at right time and right place. He connects historical success stories of 150 years to explain how success was not just an act of genius but a series of circumstances that created Gates, Jobs, Rockefellers, Beatles etc. The author goes step by step demystifying the process of success. Starting from IQ surveys which were mapped with success over a decade, the author illustrates how intellect and achievement are far from correlated. How there were more Nobel Prize winners from outside Ivy League.

According to Gladwell, “power distance index,” is a term from cross-cultural psychology describing the hesitancy of subordinates to question superiors. Culture can effect catastrophes and create superstars. He quotes Asian persistence as the reason why Asians are better in mathematics. Uncertainty avoidance i.e. how well a culture tolerates ambiguity is also cited as reasons for poor performance. Coincidently it’s Greece and Portugal that tops the list.

Coming to look at it, what Gladwell suggests is that success is to a certain degree random. If you were born at the right place at the right time and done the right things, you would achieve success. Just doing the right things was not enough, the combination of when and where was magical. The Gladwell opinion is old wine in new bottle. Taleb said it in a different way….

You can read the complete article in Business Standard

Our Jiseki Time cycles are seasonal patterns of strength or weakness in assets. They are derived from percentile rankings from 1 to 100. The higher the percentile more the chance for an asset to weaken and worst the ranking, better the chance for the respective asset to outperform. 100 is top relative performance and 1 is worst performance. The idea is that performance is cyclical. A top performer will underperform in future and vice versa. A top relative performer is also the worst value pick and the top relative underperformer is the best value pick. Jiseki is another name for Performance cycles, time triads and time fractals. The signals are illustrated as a running portfolio and as Jiseki Indices. These signals can be used by fund managers for relative allocations, traders for leverage bets and high net worth clients for selective trades.

Jiseki Interpretation. Signals are interpreted as crossovers between various Jiseki Cycles. All three Jiseki cycles (Jiseki 1,2 and 3) depict different time frames. Example: An asset is ranked above 80 percentile and all the three Jiseki cycles are pointing lower, this suggests a running SHORT SIGNAL. Our Jiseki Indices use different kind of exits based on price and Jiseki Cycles. We have color coded the (Jiseki 1>Jiseki 2) SHORT zones with brown sandy (burlywood) and grey (Jiseki 1>Jiseki2) for LONG SIGNALS.

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Mukul Pal, is a Chartered Market Technician, MBA Finance and a member of the reputed Market Technicians Association (MTA). He has more than a decade of Capital Market experience dealing with derivatives and global assets. He has worked for Bombay Stock  Exchange, multinational Banks and brokerage houses in leading research positions before starting on his own in 2005. He is the President of the MTA Central and Eastern European Chapter.

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