Archive for the ‘Time Triads’ category

The Vancouver Coffee

 

Buying a Barista or Starbucks coffee and anticipating price trends in coffee never works

Walking on Robson Street buying Tall Vanilla Latte for my sister from Starbucks, I kept wondering how much against the trend I was. I have a short coffee position and with the way Canadians and my sister love coffee, you can imagine my state of mind.

And that’s not all there are about 10 Starbucks here on the same street, two of them across the same crossroads. Wherever I go, whether to a book store or to the beach side, the coffee shops are everywhere. If it’s not Starbucks then it’s Blenz. It’s simply crazy.

The coffee store does not leave me. And I ignorantly and foolishly keep holding on to my Short Coffee trade. Hoping that finally the supports would cave in and…

This article was written for Business Standard

To read this article and for regular updates on behavioral finance, performance cycles and market forecasts subscribe to Orpheus Research Time Triads Update.

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.

 


The Electricity Exchange

 


I was invited to Prague, to speak at a conference on electricity, along with other regional experts. Until recently, electricity was traded as part of equity, but now Europe, the US and even India have started trading it as a commodity. Technology, utility infrastructure and user sophistication are some of the drivers for the electricity market. Europe is the leading electricity initiative. Today, electric cars earn $1,000 a year as they are plugged back into electricity grids to assist grids as a buffer for peak time. Electricity is traded based on anticipated demand of the quarter ahead (Front Quarter), as 24 hour electricity benchmarks (The German Baseload), etc.

Climate, currency, consumption, catastrophes and Greece drive the business. Henning Gloystein, energy editor at Thomson Reuters, in his presentation, brought out the variables and their likely influences on the sector. How would the sector behave if the euro strengthened or weakened? He highlighted coal as a dark horse in the energy segment. Though the fossil fuel is underplayed in policies, it continues to suggest resilience, especially as energy becomes expensive. Another aspect was the stagnating nature of electricity, which was stuck up in a multi-year trading range…

This article was written for Business Standard

To read this article and for regular updates on behavioral finance subscribe to Orpheus Research Time Triads Update.

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.


The Big Decision

The latest HBR carries an article written by Daniel Kahneman on decision making. The article gives a checklist approach to handling decision making at an institutional level to avoid biases. According to the article, the potential for distortions are so high that knowing biases was not enough to eliminate them. The authors illustrate the reflective and intuitive thinking process. In intuitive thinking we don’t focus on doing things, we just do them. Intuitive is good at making contextual stories. This is when cognitive failures happen because there is no way of knowing when they are happening.

According to the authors talking doesn’t eliminate biases. A more methodical approach is needed. A study observed that eliminating biases achieved returns 7% point higher.

Kahneman and team suggest that eliminating biases can improve decision making profitably. So if the method works for businesses, the approach should also work for investors and markets and…

This article was written for Business Standard

To read this article and for regular updates on behavioral finance subscribe to Orpheus Research Time Triads Update.

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.

 


The Intermarket Utility

Things keep changing as times change. Conventional intermarket tells us a few characteristics about utility sectors. First it belongs to the late economic sector. Second bond prices and utility stocks usually trend in the same direction. They peaked together in late 1993 and bottomed together in late. In a climate of falling bond prices, utilities are often among the stocks that suffer the greatest damage.

Third, because of the perceived utility and bond link, even utilities are assumed to have a connection with commodities like copper. At the start of 1995, the peak in copper prices coincided with an important bottom in bond prices. The CRB/bond ratio turned up in late 1993 and continued to rise for almost a year. This was during a period of time when copper stocks rose and utilities tumbled.

 

Visiting markets from 1995 onwards…

 

This article was written for ATMA.

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.

 


Redefining “market” in risk

 

How financial models define “market” could be at the heart of how we define and understand risk. One is connected to the other. This is an idea of extreme importance for a society that not only pays an undue weight to monetary risk but also relies on the return and growth that accompanies calculated risk taking.

Though financial models have limited history, risk has traditionally been under judged and might never be completed understood. The reason we cannot really pin point the source of the problem is because markets evolve and what seemed to be risky yesterday is not that relevant today. Risk like many other social parameters is a moving target. Many risk parameters have moved from reverence to irreverence as they failed to pass the test of time.

For us the bigger issue is how financial models understand and define “market”. If this definition needs revision, we will find our answer to a better risk measure…

This article was written for Business Standard

To read this article and for regular updates on behavioral finance subscribe to Orpheus Research Time Triads Update.

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.


Redefining "market" in risk

 

How financial models define “market” could be at the heart of how we define and understand risk. One is connected to the other. This is an idea of extreme importance for a society that not only pays an undue weight to monetary risk but also relies on the return and growth that accompanies calculated risk taking.

Though financial models have limited history, risk has traditionally been under judged and might never be completed understood. The reason we cannot really pin point the source of the problem is because markets evolve and what seemed to be risky yesterday is not that relevant today. Risk like many other social parameters is a moving target. Many risk parameters have moved from reverence to irreverence as they failed to pass the test of time.

For us the bigger issue is how financial models understand and define “market”. If this definition needs revision, we will find our answer to a better risk measure…

This article was written for Business Standard

To read this article and for regular updates on behavioral finance subscribe to Orpheus Research Time Triads Update.

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.


Limits to arbitrage?

 

Behavioral finance used mean reversion cycles to challenge the classical economics (21 Apr article), but preferred to explain mean reversion through sentiment and not ‘Time’. We can’t expect Markowitz and Fama to open up this fissure and crack the dam open and fight back, because not only this means that they have to accept that classical economics failed to answer more than a few questions, accept that the finance we are still taught at ivy league could be far from complete, undo 100 years of research and only then can there be a new academic war.

The new fissure (weak argument) behavioral finance has is that though there is a limit to what can be arbitraged and inefficiencies can last longer, price reversal happen every 2-3 years. So what the practitioners say is that on a large time frame arbitrage is possible (buying the worst 3 year losers and selling the best 3 year performers) but not on small time frames. Even this time they explain how it’s the sentiment and investor profile that is to be blamed. Because investors are loss averse they over-react pushing losers lower. Investors also suffer from under-reaction. This is the reason momentum continues and tops extend. The over-reaction and under-reaction takes years to unwind.

Above this…

This article was written for Business Standard

To read this article and for regular updates on behavioral finance subscribe to Orpheus Research Time Triads Update.

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.

 


The Time Proportion (Indian Nifty)

Looking at ‘Time proportion’ in market or price data is a very old exercise, Benner did it in 1884, Elliott did it in 1934, Frost, Hamilton, Russell, Prechter and a host of other technicians have done it over years. I can count more than 10 time cyclists who also looked at market and economic data and time proportion. Richard Mogey and Bill Meridian have been doing this exercise for decades.
All of the above practitioners know that there are many cycles acting at a certain time so many of them look at time proportion rather than equality. There is also a school which looks at equal cycles. I belong to the time proportionally school of thought which considers time equality as a subset of time proportionality.

Today we have carried a case of studying the time difference in days…

This article was written for ATMA.

Alpha is a daily strategy signal product that gives trading and investment signals. Alpha is a numeric Ranking product based on TIME fractals. The signals are illustrated through tracker and running portfolios. Alpha can be used by fund managers for relative allocations, traders for leverage bets and high net worth clients for selective trades. Alpha is a part of the time triads analytics developed by Orpheus Research.


The Intertemporal Choice

I was working on my TEDx presentation this week. This was work because the time allocated per presentation is 18 minutes. Surprisingly it’s always tough to simplify the message. I allocated some additional hours to fine tune my message.

It was not a coincidence that I wanted to write on intertemporal choices, was speaking on Time and was struggling with 18 minutes. This was a personal choice. But there are choices that we make in context of time. And how our decisions change with the context is something that we as a society don’t comprehend well. People tend to ignore (or atleast underweight) information about the future consequences of decision.

Moreover, we are in the age of instant gratification. Not only we are less patient regarding the fruits of our effort, but once we have the fruit, we don’t want to put it in cold storage. We want to savor it instantly. We underestimate our future wants and don’t realize that deferring the pleasure might be more valuable. We feel less concerned about future pleasure and pain simply because the time lies in the future. Our concern decreases proportionally as the future gets farther.

Instant pleasure could be…

This article was written for Business Standard

To read this article and for regular updates on behavioral finance subscribe to Orpheus Research Time Triads Update.

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.


TEDxCLUJ updates

These are some of the pictures from the 20 May TED event. We will post the videos in 3 weeks. Mukul spoke about the mathematical nature of Time and how it could change the way we see the world around us. TED is a nonprofit devoted to Ideas Worth Spreading. It started out (in 1984) as a conference bringing together people from three worlds: Technology, Entertainment, Design. Since then its scope has become ever broader. Along with two annual conferences — the TED Conference in Long Beach and Palm Springs each spring, and the TEDGlobal conference in Edinburgh UK each summer — TED includes the award-winning TEDTalks video site, the Open Translation Project and TED Conversations, the inspiring TED Fellows and TEDx programs, and the annual TED Prize.

Ted Global

May 20, 2011  TedxCluj event

May, 2010, TedxCluj event