Predicting the Future is a Reality - Using Mathematics and the Moon

[MortFurd]

Wow, holy smokes, thanks! I'm going to have to read this one over a few times to really understand it fully.

You mentioned predicting ultra-rare events. I wanted to give you a lovely story along these same lines though. Remember the TJX credit card system theft (TJ MAxx, Marshalls, Winners, HomeGoods, ...)? Last month, the fraud group asks if I can build a statistical model to predict the next time a hacker will break into a store's database, and if so, which store. Any advice? I've already tried using chicken bones, tea leaves, and measuring the rings around Uranus. Did I miss something? I don't think the fraud group appreciated me telling them that they were smoking crack and SOL on this one.

You forgot to ask the Oracle 9i of Delphi.


How's this:

You sell 'em a "system" that is you claim can predict the hack attacks. Charge them by the month to operate the system, and pay me half the monthly take. The system consists of me telling you which store I'm going to attempt hack in the coming month. You recommend that that store take extra precautions, including ones which will cover the details of the attack I'm planning (and which I"ve given to you.) Those precautions block my attack and document the attempt.

You make money, I make money, and the credit card folks are happy 'cause they've got a system that predicts and blocks data theft - and if a real attack gets through somewhere, then that's just tough. [Rule 8] happens, and they know that no system is perfect.

 

[Loss Leader]

The OP hasn't been back in quite a while. Possibly he saw that spamming this forum with, literally, lunacy was not going to bring much return.

 

[joesixpack]

Do you find that your phase threes always require a young priest and an old priest? In this case general subject of impregnation sprang to mind (I find it often does that) but nothing to do with priests. Call me old-fashioned if you like ...

There is a way to test this scientificly.


Any bets on what the third phase of this test will require?

 

[JonnyFive]

The OP hasn't been back in quite a while. Possibly he saw that spamming this forum with, literally, lunacy was not going to bring much return.

I guess he integrated his sun signs into his moon units wrong.

See? I can post meaningless jibberish too!

 

[Cuddles]

I'm not aware of any empirical support for personality differences based on birthday. If however, it does turn out that there are objective personality traits based on "astrological sign", I thought of a mechanism by which this might occur: Photoperiod.

Length of day varys by season, of course, and perhaps this influences hormone production during pregnancy, similar to Seasonal Affective Disorder (SAD). A baby concieved in April, born in December would experience a different pattern of homonal changes in utero than one concieved in September and born in June.

If this has any validity, we would expect to see opposite patterns south of the equator, and more noticeable patterns further from the equator.

Just an idea.

Unfortunately this would also require that personality is determined in the womb, which seems exceedingly unlikely. Personality develops continuously throughout life through interactions with other people. You are not the same person you were 5 years ago, let alone when you were first born.

On the other hand, research of this sort has been done and has found that there are seasonal trends for certain things, mainly personality disorders. What is not at all known is whether this could be due to prenatal or postnatal effects. Things like brain development are certainly affected by the mother, but they are also effected by the environment after birth.

Of course, the big problem with these studies is that they only establish correlation, not causation. If you take lots of things and try to find relationships between them you are virtually guaranteed to find some. This is why in medical studies you can only look for the effects the study is designed to look for. The studies I have seen reported mostly fell into this category and are probably about as useful as the studies showing the relationship between birth sign and car accidents. On the other hand, there have been some studies that certainly warrant further investigation, in schizophrenia, for example.

 

[CapelDodger]

You make money, I make money, and the credit card folks are happy 'cause they've got a system that predicts and blocks data theft - and if a real attack gets through somewhere, then that's just tough. [Rule 8] happens, and they know that no system is perfect.

This is seriously good thinking. Dogbert and I tip our hats to you.

I can picture one of the clients describing this system over a dinner-table with a critical-thinker or two in the party. The punter would really believe in it and the critical-thinkers really wouldn't. It could get lively.

 

[CapelDodger]

Well, that was part of my point. I agree that this is possible, but I would hesitate to call it "beating the market." The concept of greed, as well as other elements of human behavior, can't possibly be eliminated from the market. However, understanding those things and using them to analyze the market isn't really the same as having a sure-fire system to always win.

What I understand by "beating the market" is consistently out-performing the average. Milken was able to do that because he identified, through rational analysis of long-term outcomes, a systemic bias in the market. Essentially, what he recognised was that the risk premium for so called "junk" bonds outweighed the actual risk by a significant margin. If you spread capital (and risk) across that market you would get a better return than if you put the same capital in the prime market. He may not have grasped the reason behind the fact. Or he later lost sight of it.

I could explain the reason, but I won't bore you. Suffice to say that perceptions of risk lay behind it. What he shouldn't have done is change perceptions outside a select clientele. Low-key is definitely the way to go. It's the same with card-counting; you can make a very sound living, but don't try to get filthy rich.

I should have been clearer about what I meant by "beating." I don't mean "beating" as in "generally out-performing by making smart investments over a long enough time frame," I meant the kind of magic, always-win systems that some of these guys are pushing.

I spent time in the heart of the beast, so I have an insider understanding of the term (as above). I appreciate that it means something different to the proles that the snake-oil is being pushed at. I think "beating the market" is associated with "beating the system", when of course the best strategy is always to work the system if you can. And not to work it so hard the system itself is changed in the process.

I have no qualms with the idea of being able to out-perform the market enough to make a reasonable return through understandign market factors, gathering good intelligence on business happenings, and understanding economic cycles.

I just don't think the moon magic has a damn thing to do with it, or think there's a set formula to predicting market cycles.

Understood. The very fact that these market-busting strategies are being promoted - spammed even - so indiscriminately is proof of their snake-oil nature. I agree (going back to the beginning of this conversation) that if there was anything to them their widespead adoption would change the conditions they were designed for, and any advantage would be lost.

On the other hand, flaws in the market can be exploited without affecting the market itself as long as you don't get greedy. Markets are granular, not continuous; restrict yourself to less than the grain-size and you're invisible.

 

[CapelDodger]

Any bets on what the third phase of this test will require?

Are you running a book? If so, a buck on crash-test priests.

 

[JonnyFive]

What I understand by "beating the market" is consistently out-performing the average. Milken was able to do that because he identified, through rational analysis of long-term outcomes, a systemic bias in the market. Essentially, what he recognised was that the risk premium for so called "junk" bonds outweighed the actual risk by a significant margin. If you spread capital (and risk) across that market you would get a better return than if you put the same capital in the prime market. He may not have grasped the reason behind the fact. Or he later lost sight of it.

Yes, I can understand the reasoning behind it. There are certainly situations where it is possible to out-perform the market through analysis. The situation you're talking about sounds like an interesting way to exploit the inherent uncertainty in risk analysis. It could, of course, also work the other way around.

I could explain the reason, but I won't bore you. Suffice to say that perceptions of risk lay behind it. What he shouldn't have done is change perceptions outside a select clientele. Low-key is definitely the way to go. It's the same with card-counting; you can make a very sound living, but don't try to get filthy rich.

I think I see what you're getting at.

I've always found card counting fascinating. I wish I had to time to learn it myself.

I appreciate that it means something different to the proles that the snake-oil is being pushed at. I think "beating the market" is associated with "beating the system", when of course the best strategy is always to work the system if you can. And not to work it so hard the system itself is changed in the process.

It's my fault for using the term so loosely, my apologies. It provides another gray area for these scammers to operate in. They can talk about legitimate detailed analysis to out-perform the market on average (not all the time, which I've never seen), and use that to try to legitimize the claims they have of being able to predict the market cycles and, presumably, beat the market all the time and in a big way.

Understood. The very fact that these market-busting strategies are being promoted - spammed even - so indiscriminately is proof of their snake-oil nature. I agree (going back to the beginning of this conversation) that if there was anything to them their widespead adoption would change the conditions they were designed for, and any advantage would be lost.

Agreed.

On the other hand, flaws in the market can be exploited without affecting the market itself as long as you don't get greedy. Markets are granular, not continuous; restrict yourself to less than the grain-size and you're invisible.

True enough. I'm speaking on the more macro-level when I talk about the market correcting. The corrections are, after all, caused by the actions of individual market actors, and groups of the same. If nobody notices a flaw or inconsistency (such as the discrepency in true risk/risk premium you mentioned above), you might be able to exploit it for a while. Similarly, you can use illegal exploits like insider trading or stock pumping to make some money until the government catches you.

 

[Steven Lupo Grossi]

As I said, I'm not even aware that there are any objective personality traits sorted by month of birth. So with my photoperiod hypothesis I'm not even sure there is anything to attempt to explain. It was just an idea.

I was unaware of this astrology-car crash study, interesting. Thanks for mentioning it. I'll look into it a bit more as I have time.

 

[Cuddles]

I was unaware of this astrology-car crash study, interesting. Thanks for mentioning it. I'll look into it a bit more as I have time.

I'm not sure there's ever been a real study. A few months ago there seemed to be a thing where some insurance companies decided to put stuff on their websites about the relationships between zodiac signs and accidents, and there was at least one book about it. They all had different results. If you search tags for astrology you can find a couple of threads here about it, although some of them seem to have excaped tagging so far.

 

[jimbob]

General interest in the heavens seems to increase with latitude, as does seasonal variation and associated interest in the weather. An obvious hypothesis is that there's a connection .

I think education is more important:

India.
Astrology is still very important and it is at a fairly low lattitude, and can *really* affect your life there, due to ist widespread acceptance.

The ancient Egyptians were keen on astrology. There was probably a good reason why someone could predict the future in ancient Egypt, at least when floods were due; nowdays we might use a "calendar".

I seem to recall that astrology is also popular in Indonesia.

The magi were obviously assumed to have been astronomers, I can't be bothered to look that up.

I doubt that inhabitants of rainforests would have ascribed such importance to astrology, as it must take more effort to see the sky.


ETA. And they could have for more "fun" with hallucanogenic plants and animals.

If you wonder why I put fun in quotation marks, there was a BBC programme "tribe" with Bruce Parry, where the Bagabongo tribe had a religion based on Iboga and the elders tried to give the inductees as bad a trip as possible...
Jim

 

[aggle-rithm]

I think education is more important:

India.
Astrology is still very important and it is at a fairly low lattitude, and can *really* affect your life there, due to ist widespread acceptance.

The ancient Egyptians were keen on astrology. There was probably a good reason why someone could predict the future in ancient Egypt, at least when floods were due; nowdays we might use a "calendar".

I seem to recall that astrology is also popular in Indonesia.

The magi were obviously assumed to have been astronomers, I can't be bothered to look that up.

I doubt that inhabitants of rainforests would have ascribed such importance to astrology, as it must take more effort to see the sky.


ETA. And they could have for more "fun" with hallucanogenic plants and animals
Jim

I wonder if astrology could be based on a long-ago miscommunication?

"I can predict where stars will be years from now. Pass it on."

"That guy says he can predict where stars are in the future. Pass it on."

"Stars can predict where a guy is in the future. Pass it on."

"Stars can predict the future! Pass it on."

The most interesting version won out.

 

[Fnord]

Short story, simple moral...

Back in the day when Advanced Dungeons & Dragons was still in its first edition, and I had a lot of time on my hands (pre-parenthood), I wrote up a description of an entire solar system, complete with planets, moons, asteroids, and other notary sojac. Naturally, since this was a fantasy world, I had to include an astrological "science."

(And the obligatory "Island Of The Blonde Jogging Bimbos," but that's for another website.)

The Zodiac of Karst had 13 signs, one for each 28-day month. Each sign was based on a class or profession (Sovereign, Sorcerer, Priest, et cetera). One sign was "Telev, the Weaver" -- a person born under this sign tended towards patience, dilligence, and attention to detail, but also tended to be unsophisticated, single-minded, and sedentary.

I showed my "creation" to my cousin the witch, and she was interested enough to offer to help me publish the text ... with her as co-author, of course. I turned her down.

Gach! If I had taken her up on her offer, maybe we'd both be wealthy by now!

"The Zodiac of Karst™ -- a pre-Roman astrological system that YOU can use to guide your love life and financial success! Only $77.34 while supplies last! Act now, and get our free Chakrametric Chroma-Pendant™ radionically keyed to your personal aura; no batteries needed!"

Hmm... now where's my Dungeon Master's Guide?

Moral: If you make it, someone will buy it.

 

[JonnyFive]

Gach! If I had taken her up on her offer, maybe we'd both be wealthy by now!

"The Zodiac of Karst™ -- a pre-Roman astrological system that YOU can use to guide your love life and financial success! Only $77.34 while supplies last! Act now, and get our free Chakrametric Chroma-Pendant™ radionically keyed to your personal aura; no batteries needed!"

Hmm... now where's my Dungeon Master's Guide?

Moral: If you make it, someone will buy it.

You're thinking too small. You need to package a slick looking book about the system along with some handy reference cards and a binder. Call it the Karstian Financial Forecasting System and sell it for $99.99... or $199.99 with the optional Karstian Financial Analysis Toolpak CD-rom (some crappy software written in VB to use your "system").

Then make a "pro" version of the CD that includes the ability to output charts for $299.99. Finally, package an "investor" version of the CD that includes the ability to link up with some free stock ticker service on the web for $399.99.

You can also sell telephone counseling services for $1,500 an hour!

 

[jimbob]

Johnny, I prefer Karstein Regression Analysis Product (KRAP)

 

[Ladewig]

You're thinking too small. You need to package a slick looking book about the system along with some handy reference cards and a binder. Call it the Karstian Financial Forecasting System and sell it for $99.99... or $199.99 with the optional Karstian Financial Analysis Toolpak CD-rom (some crappy software written in VB to use your "system").

Then make a "pro" version of the CD that includes the ability to output charts for $299.99. Finally, package an "investor" version of the CD that includes the ability to link up with some free stock ticker service on the web for $399.99.

You can also sell telephone counseling services for $1,500 an hour!

In this one, strong the Force is.

Hope he doesn't turn to the Dark Side, we must.

 

[Fnord]

To the Dark Side, we will not turn.
Already there, we are...

 

[jimbob]

I have an idea:

As an engineer I could use Fourier transforms and spectral analysis to fit the past behaviour of the stock marklet over an arbitary length and to an arbitary precision. As fourier analysis is periodic, I could then exend this to predict what the future is going to do.

Better not use wavelet analysis...

Is that the basis of Elliot Waves, or is it sligltly less piss-poor than that? (anyone with more knowledge about this than me i.e. anyone, please)

Or maybe I could try curve fitting to an inherently chaotic system... Doh.


I could use frequenc analysis, and it might have some little predictive power in certain markets (hey a capital-intensive market like semiconductors, where I work *does* have cycles that are quasi periodic, due to the cycles of investment, capacity, and oversupply.

However I think Karstien analysis is a better bet...

Jim

 

[CapelDodger]

In this one, strong the Force is.

Hope he doesn't turn to the Dark Side, we must.

Guidance and exploitation he needs.