Beyond Price and Time?

[techst]

After reading and studying about Fibonacci numbers in charts (aswell as in the natural world) and Kondratieff charts and waves. I came across an idea and things started to add up. I read a book by a man called Buckminster Fuller a Nobel Prize winning scientist of recent times and thought about something written in a similar text.
"W.Edwards Deming is the American statistician who established the Total Quality Movement first in Japan, then in the rest of the world. Deming's contribution is historically so important that U.S. News & World Report called him one of the 'nine hidden turning points in history' (along with the birth control pill and the Apostle Paul) After over 50 years of statistical study, Deming pointed out that in every process there is a beginning and an end. When you focus on the first 15% of that process and get it correct (it's initial conditions), you ensure at least 85% of you desired out come. By focusing on the first 15% of anything, the remaining 85% will effortlessly follow."
I think that studying charts of price must be statistical study. But then I think beyond charts and think of the foundation of companies that start up based on certain moral or immoral values and rules and ideas from there strategies and plans. If these ideas are based on positive precession or negative precession (Positive and Negative are the two elements that govern our Universe) does this determine precessionly, the angle on which the chart and also there business philosophy is based? Thus whenever hard times knock these companies do they look back at the history and core beginning to find inner strength from the original ideas or previous well respected directors that performed? Or is this strength built-in in a precessionly positive case. Sometimes i think what does this line really represent beyond price and time on these charts? Does it represent love or energy? Or can the gradient of the all the data on a price chart from it's beginning of floatation to the present day represent whether the business was built on a rocky and solid (+) foundation or made from sand on lose ideas and perceptions of business (-)These idea's and thoughts I normally keep to myself. Mainly because I have no other peers with which to discuss trading! But I share them with you in the hope that you can help me understand them, and also understand trading and the bottom line.
Many thanks for your time if you do find time to read this. I would appreciate a reply to some of these questions if you can or are in a position to do so.

Techst@

 

[ZigZag]

Beyond Price & Time

Hi techst,
From my management days, the idea is similar to the Pareto principle from an Italian economist by the same name. (Also called he 80:20 rule). I was instructed that 80% of a firms profit is derived from 20% of its business. As you intimated the concept can be extended to people/management or physical processes.
Extending the idea it also encroaches on the economic concept of Diminishing Returns. I can certainly vouch to the above ideas in relation to my old firm ( a FTSE 100 member)who has hit on hard times.
Interesting post.

 

[Kilnside]

Interesting. Used to reckon that 80% of the work was done by 20% of the staff. Same idea though.

 

[BBB]

How about this - 80% of your cash comes from 20% of your trades! Ring any bells?

Good post though. Personally, I believe a share price shouldn't be used as a barometer of how well that company is doing. It's 'fair price' may be, but then I'm not a great one for fundamentals anyway

 

[techst]

Precession

During that thread i just posted, i used the word precession. It's a little clearer now why have received alot of people viewing my thread and not replying. Precession is a scientific fact just as acceleration and reproduction are. The thing is, it has only been discovered within the last 20 or so years. It was discovered by Noble Prize winning scientist R. Buckminster Fuller. He noted in his groundbreaking book written in 1981 and titled Critical Path, that only 1/20 million people are aware of this fact. But it is essential to the regeneration of the earth. Although I thought I would try to narrow the odds a little by mentioning it here.
Ok, hang with me here as i copy some text from the book which will obviously explain it better than me!

"The big question remained: How do you obtain the money to live with and to acquire the materials and tools with which to work?
The answer was 'precession'. What precession is, and why it was the answer, requires some explaining.
The honeybee's primary objective is to obtain nectar to make honey. While in the process of going after the nectar, the honeybee is actually involved in a much larger purpose. At 90 degrees to the direction of the honeybee's flight path, pollen is being dusted on it's wings. As it goes on it's search for more nectar the honeybee is cross-pollinating the rooted botanicals. This cross-pollination is a far more important outcome than making honey, for it's results in a beautiful, bountiful garden.
When something is in motion moving toward a specific objective, what happens precessionally, at 90 degrees, is far more important."

There, explained. If this baffles you as it is just about honeybees, then maybe you have to dig a little deeper into the text. And if anyone thinks this is not a good example i have plenty more available for those with an interest.
As for the 80/20, 85/15 and even 90/10 (to Robert Kiyosaki) i have a thought that may or may not answer it. It all depends on how it is perceived. This rule that pops up in all the top economic 'gurus' brains whether it be applied to one thing or another..... could it be the same rule? Universally but applied to different areas? My view on this rule has some thing to do with the madness of crowds with which our work is based. Could it be that 10,15,20% of people believe in themselves and trust their original thought and work from their own ideas about themselves their work and the world. And that the 90,80,85% follow others, lacking the discipline, hard work and belief in themselves?
Surley these ideas may seem outlandish to prehaps most (90,85,80%). But it is purely original thought (10,15,20%). And though the precession (scientific fact) bit will be hard to accept. Change is needed in order to progress. And for most people change is too much to ask.
A share price being a barometer to how well a company is doing? that is correct I believe. But it is surely a barometer of all the people that effect that share price. Investors, traders, managers and workers. Because precessionally (there's that word again) all of these have an effect on the company and it's outwardly picture which may influence our perception of the company, whether fundamental or technical.

Please feel free to hit me with any questions on this subject.

Thanks for reading this far. Techst@

 

[ZigZag]

Beyond Price & Time

Hi Techst,
Im afraid I cant agree with your statement that a share stock price is related to a firms business. For those of us who needed to learn the lesson ONCE AGAIN study the antics of ENRON, Worldcom and many others in the same mould. For a true market to exist the father of economics, Adam Smith, stated that all RELEVANT information must be universally shared by all the participants. Even now, do you believe that a firms balance sheet gives you all the information needed to ascertain a stocks fair value?. If it was the case surely volatility in the financial markets would be practically zero.
So what drives a share price. Its the participants PERCEPTION that the price will move in a direction that enables a profit to materialise for the participant. Now this where the 80:20 rule enters the fray and the pecking order. The price moves when the 20% minority starts the motion. I consider the 20% as the big hitters who move the markets not because of their intelligence buy because of the huge size of their pockets. When the big investment banks recommend shares(FOR WHATEVER REASON!!!!) to their wealthy clients fuel is injected (i.e.volume)
into the rocket boosters. Blast off occurs when the institutions and the international brokers add to the fuel. The bottom feeders see the activity and add to the fuel for the flight.
Soros the hedge fund speculator stated that you dont fight this momentum ,even though it is questionable tha it ist based on true value , but jump on for the ride. He says the trick is to be first off before the bubble bursts.

 

[Rognvald]

Are we talking geometry or astrology here or a mix of the two. I suspect that people may be interested in precessional effects but many will not have a clue as to how they relate to trading other perhaps than that there cyclical relationships.

Could you tell us more please

 

[DaveJB]

I agree with Zig Zag here,
frankly, I think this is navel watching.. but good luck to you if you can find anything useful in it. I would like to point out, however, that winning a Nobel prize shows you've made an important (and politically acceptable, it must be said) discovery... it doesn't mean the winner is particularly clear sighted outside their own specific field, and many a bright spark has gone from the inspirational to the crackpot in a remarkably short period.
Statistics helping analyse a stock, or spot significance in otherwsie random seeming data - yep, quite possibly a good idea. Companies looking back at moral values etc? Not a hope.... !
Dave

 

[jsd]

techst, excellent posts i was smiling all the way through them, i recognise that you are looking very deeply and probably you would be in the 15% rule in relation to humans and questioning beyond the norm. I have a feeling that a share price represents a visual representation of the historic price paid at that point in appx. time,(does time exist?) people and their mental mindset decide whether the price is worth paying,holding or dumping, its supply demand with added con factor. its ultimately non tangible as is the company these are non physical.just ideas.

I had a theory once (under altered state of consciousness) that individual people who collected beer bottles were the elite order of our race.... hmmm because they knew that brewery companies purpose was to get humans to buy their bottles for the bottle itself and all it represented, now joe public (lesser order)think that its the contents of the bottle thats important, worth paying for and not the bottle and all it represents. the contents of the bottle or BEER is the drug that facillitates the ultimate secret objectives (known to few) of the brewery companies. Those being for people to buy the bottle and experience it.


Makes me eye a bottle of Bud in a different way. hmmm

 

[scrappy]

Hi Techst@,

"The first secret to learn in trading succeessfully (as opposed to investing) is to forget about the intrinsic value of a stock, or any other instrument. What you need to be familiar with is its perceived value, its value to professional traders, not the value it represents as an interest in a company. The intrinsic is only a component of perceived value. This is a contradiction that undoubtedly mystifies the directors of strong companies with a weak stock. It is the perceived value that is reflected in the price in the market not, as you might expect, its intrinsic value."

By Tom Williams

 

[DaveJB]

Worth noting also,
not only is the share price going to reflect what people think it is worth paying to own, but it's a beauty contest where fashions can change very quickly.

 

[BBB]

I'd like to 2nd ZigZags comments.

Techst - you're obviously a very philosophical person. There is nothing wrong with that, infact it's a beautiful thing that you have such awareness and interest in the wonderful world around you and all that it has to offer. To be honest though, maybe you are thinking a little too much about the markets. As was mentioned above (and also hinted at in your own post regarding the madness of crowds & extraordinary popular delusions), markets are really driven by human emotions, not factual scientific observations. If that were not the case, stocks would stick at fair value, and speculation wouldn't be the art that it is.

Look at the Euribor or Eurodollar futures markets. They are based on interest rates. As interest rates generally tend to change once every few months at most, how do we explain wild gyrations to market levels that any rational person will realise are so ob/os that the underlying interest rate is 99.99% unlikely to move to such an extreme as represented in these markets at particular times.

Some other points: You mention gradient of a price. Take any stock - it's gradient on the chart will alter from chart package to chart package - purely because of the differing scales.

As a trader, I often take short term positions in a companies who's full names I dont even know, yet alone what business they are in. I only know their ticker symbol and their price action. I dont need to know anything else to make money in short periods of time.

Just my views though.

 

[TheBramble]

I had a theory once (under altered state of consciousness) that individual people who collected beer bottles were the elite order of our race.... hmmm because they knew that brewery companies purpose was to get humans to buy their bottles for the bottle itself and all it represented, now joe public (lesser order)think that its the contents of the bottle thats important, worth paying for and not the bottle and all it represents. the contents of the bottle or BEER is the drug that facillitates the ultimate secret objectives (known to few) of the brewery companies. Those being for people to buy the bottle and experience it.

Did you drive me to the airport a few weeks ago?