Briefly Speaking

作者:Victor Niederhoffer
日期:2011/04/19

1. From time to time, I read headlines of articles that try to encap the news in order to trade. I find these articles very deficient because of the difficulties of content analysis a field I studied in detail in connection with my thesis. "World events and stock prices" a essay that amazingly was cited by Shiller to falsely support his views that markets are irrational. The situation

There is apparently a content trend that one of the search engines puts out. People often use it as a foundation for a prediction, and I seem to note that based on the favorabilty of the headlines, computer algorithms seem to buy and sell a nano second ahead of everyone else as they get the headlines. They seem to be wrong as much as right, although on occasion like the downgrading by S&P they got the headline ahead and then sell in strength to the poor, buy limit orders from those who can't afford a million dollar hookup adjacent to the exchange, or advance info from the flexions who worked the talk shows the previous days.

From my work on content analysis there was grave difficulty in measuring the strength of assertions, the verisimilitude and wisdom of who making it, and taking into account the activity of the statements (a scalagram score from high to low on fast slow), as well as taking into account the degree of negatives in the statement double or triple and whether that makes it favorable or unfavorable. Taking into account the untested nature of the indicator itself, as well as the look back bias in any fields and times that it actually worked on paper, I wouldn't put too much reliance on it.

In short it's another random element in the market that provides extra vig for the infra structure and top feeders.

2. I have been asked if a lower yield after seemingly bad news like the S%P downgrade is bullish for bonds. A lower yield than before happens often. Is it bullish or bearish. If you specify the time and the magnitude and the other conditions it can be tested. Such tests must be made conditional on the time of the day. As a hint, such tests as of the end of the day do not support anecdotal assertions being made here about qualitative factors, and sensible sounding technical shibboleths. The problem with qualitative analysis is that there are so infinitely many smart people constantly tinkering to get the right price. That right price is the result of so many people like Paul Derosa and the palindrome, the former of whom is completely sagacious and knowledgeable, and the latter of whom takes along with him trillions of fellow travelers that are part of the affinity group, as well as the wisdom of all the flexions that rely on such as the upside down man and he for guidance as to what they should do to finesse their positions along. Furthermore the wisdom and the access to such info from all these types is always varying, and depends on the ethos with which they look at things, which is often right during bad economic times for example for the man of many books. Sometimes they're good and sometimes bad. So it's hard to follow a qualitative guru and even more difficult to find a qualitative divergence. Certainly impossible is to make money following a shibboleth that hasn't been tested, and to extent it has, one wouldn't be writing that it's worthless unless it were truly wrong.