The primal models: fundamentalism and technicalism
The first contrarian: random walk
the big list: noisy box; chutes and ladders (things come down a lot faster than they go up) ; slapjack (no peeking) ; antique roadshow (at auction I would value this widget at a $zillion) ; ebay (the end is coming)
So if all models have some resemblance to some aspect of the market, how do we know which model to apply? Pick one, any one, and stay with it until you no longer trust its algorithmic (explanatory) power. (A primary goal of any model is to allow the modeler to sleep at night)
Then there is the complicating factor of scaling: models work best at a certain distance from what they are modeling. A random walk down wall street at one scale, looks like a piece of cheese at another.
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4 comments:
What kind of cheese
Well and what about models inside of models or perhaps hybrid models, e.g. a fundamentalist technician.
I would say a story inside a story inside a story...all the way down.
for example: Geopolitical(National(Sector(Industry(Company(Next month))))
what is going on here????
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