{"id":22780,"date":"2007-07-14T11:31:00","date_gmt":"2007-07-14T11:31:00","guid":{"rendered":"https:\/\/clusterfamilyoffice.com\/blog\/?p=591"},"modified":"2007-07-14T11:31:00","modified_gmt":"2007-07-14T11:31:00","slug":"la-economia-mundial-y-la-teoria-del-caos-filosofia-aburrida-para-los-que-esperan-formulas-rentables","status":"publish","type":"post","link":"https:\/\/clusterfamilyoffice.com\/en\/la-economia-mundial-y-la-teoria-del-caos-filosofia-aburrida-para-los-que-esperan-formulas-rentables\/","title":{"rendered":"The Global Economy and Chaos Theory. Boring philosophy for those hoping for profitable formulas."},"content":{"rendered":"
\"\"<\/a>It is inherent in the human race to constantly strive to to foresee<\/span> and take control of the future, and even more so when it comes to anticipating economic trends that could benefit our pockets homo<\/span><\/span><\/span> erectus<\/span><\/span><\/span>.<\/div>\n
In today\u2019s globally interconnected financial system, where efficiency is a constant guaranteed by the system itself globalisation<\/span><\/span><\/span>, countless studies, theories, methods and complex mathematical formulas have emerged to systematise investment strategies designed to make us rich. This phenomenon also goes in<\/span><\/span><\/span> crescendo<\/span><\/span><\/span>, <\/span>as well as their widespread adoption. These days, any reasonably experienced retail investor is keen to learn a few techniques that will enable them to outperform the average investor, in the belief that their returns will grow<\/span> proportionally. Furthermore, the professionals who sell them access to these investments have adapted their approach to meet this demand from their clients. The \u00abspend it on that<\/span><\/span><\/span> You<\/span><\/span><\/span>. \u00bbthe same\u00ab or the \u00bbguide to making money in finance\u2019, and it seems to be universally accepted that a better-prepared investor will achieve better returns than one who is not. Apparently, learning the necessary investment techniques is the path to wealth. But apart from most honourable<\/span><\/span><\/span> major cases gurus<\/span><\/span><\/span> in finance, that is not the case. And in those rare exceptions, investment technique is not everything; I would add that it does not even constitute a significant part of the tools used by those successful investors gurus<\/span><\/span><\/span>.<\/p>\n

It is not enough simply to have a good understanding of technical analysis or to be a fundamentalist<\/span><\/span><\/span> expert. Nor are mathematical models capable of predicting market movements with sufficient certainty of success, not even Fibonacci<\/span> or fractals<\/span><\/span><\/a>. That would be far too easy. Geopolitical crises, international relations, the fundamentalisms<\/span><\/span><\/span> \"\"<\/a>Religious factors, technical advances in energy, genetic engineering, nationalist strategies, endless speculation of all kinds and, ultimately, a myriad of variables influence the evolution of the global economic and financial system. Some would say that the secret lies in combining all these tools to weigh up every possible variable. Undoubtedly, when used in exactly the right measure and with the timing<\/span><\/span><\/span> If done correctly, they can form a relatively successful team, but we must not forget that we are talking about a system with infinite variables, where, moreover, the initial analysis can only ever be an approximation. Furthermore, the number of variables is constantly increasing; for example, speculation in today\u2019s markets exceeds overwhelmingly<\/span><\/span><\/span> that which existed during the \u2018golden years\u2019 of growth, when many of those who are now regarded as gurus<\/span><\/span><\/span> laid the foundations for their personal financial growth. Consequently, their methods are no longer as useful as they were for their creators, as the current landscape involves very different variables. Constant change in the landscape, a variable unpredictable<\/span> more.<\/p>\n

It is much easier to forecast the weather for the next 48 or 72 hours. Although perhaps the system economic<\/span>-The global financial system is indeed comparable to a weather forecasting system when we try to predict the weather more than 10 days in advance. In short, we could describe it as a chaotic system \u2013 that is to say, neither stable nor unstable.<\/p>\n

If we conclude that our global financial system is affected by the notorious butterfly effect<\/span> Inherent in human activity itself \u2013 precisely because it is a chaotic system \u2013 can we deduce the underlying order concealed by seemingly random phenomena? In theory, yes. The laws governing human behaviour mean that this system is deterministic, sensitive to initial conditions and with attractors<\/span><\/span><\/span><\/a> (market laws). I do not know whether anyone has ever rigorously applied the precise mathematical formulas used to study chaos to the prediction of markets within the global economic system. Obviously, attempts have been made, but I fear they are nothing more than shots in the dark. Perhaps the leading exponent of Hurst<\/span><\/span><\/span>,<\/a> the eldest of Lyapunov<\/span><\/span><\/span><\/a> or the relative complexity of Lempel<\/span><\/span><\/span>-Ziv<\/span><\/span><\/span><\/a> and the entropy<\/span><\/span><\/span> Computer science, used to gauge the degree of disorder in data, might shed some light on the outlook for the global economy. Or perhaps not. But even if that were the case, perhaps this light shed on our financial chaos would not help us become rich either, since, unfortunately, our wealth is meaningless in an environment of widespread global opulence \u2013 at least, I cannot conceive of it being so. I am convinced that if, one day, a method of analysis were developed that was powerful enough to to foresee<\/span> economic trends; market efficiency would continue to struggle against the predictable chaos<\/span>.
\"\"<\/a>I can\u2019t help but smile when I see investors who have blind faith in their trusted \u00abspecialists\u00bb, with whom they forge bonds of reverence that extend even to their most private assets, and who have no hesitation in recommending them to their friends as the philosopher\u2019s stone of their finances. It is true that during periods when the markets behave in accordance with a limited number of variables eligible<\/span> because of these experts<\/span>, they make profits in excess of benchmarks<\/span><\/span>, but all it takes is for chaos to sneeze for pneumonia to take hold of the assets of those managers\u2019 clients. It is only a matter of time before the damage caused by variables not factored in by the investor becomes apparent, as the assets we have available for investment are more than finite. To give you an idea, something similar to what causes the popular martingale<\/a> Like roulette, but with far more variables.<\/p>\n

Even so, we can still aim to make financial progress with our investments throughout our lives, although there are, of course, no guarantees of success: a strategy tailored to our personal needs, all the technical tools at our disposal, taking into account as many variables as possible, and exemplary risk management (I recommend reading Rebuzner<\/span><\/a>), prudence and a great deal of humility. If, moreover, we are able to adapt all of the above to the current global situation at every turn, we will simply be at the mercy of the imponderables<\/span>, Chaos, or what is also known as chance. Or perhaps we call \u2018chance\u2019 that which we are not yet able to foresee, but which is intrinsically foreseeable?<\/p>\n

Unfortunately, the average investor will continue to place their trust in fund managers men in suits and ties<\/span><\/span> which they operate indecipherable<\/span> tools that will make them rich<\/span> (sic<\/span><\/span>), but who remain in their jobs, trying to minimise their failures as much as possible, even at the expense of their own personal assets. Sometimes they even succeed, and merely go bankrupt periodically alongside their clients. Success will be achieved by those whose life cycle is not long enough for a crisis to, crack<\/span><\/span> or some unforeseeable factor fatally undermines his winning strategy within the System. Despite everything, who said anything about fear? The dollar-euro exchange rate at 1.65, bearish stock market cycles as soon as these levels are reached, rallies<\/span> generalised interest rates, yuan<\/span> through the roof\u2026. rien<\/span> ne<\/span> va plus<\/span>. We\u2019ll always have Chaos to cling to.<\/div>","protected":false},"excerpt":{"rendered":"

Es inherente a la raza humana el intento constante de prever y dominar el futuro, y a\u00fan m\u00e1s cuando se trata de anticipar movimientos econ\u00f3micos que puedan beneficiar nuestros bolsillos de homo erectus. En un sistema financiero mundialmente interrelacionado como el actual donde la eficiencia es una constante garantizada por la propia globalizaci\u00f3n, han surgido […]<\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[],"class_list":["post-22780","post","type-post","status-publish","format-standard","hentry","category-sin-categorizar"],"_links":{"self":[{"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/posts\/22780","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/comments?post=22780"}],"version-history":[{"count":0,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/posts\/22780\/revisions"}],"wp:attachment":[{"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/media?parent=22780"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/categories?post=22780"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/tags?post=22780"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}