Newsgroups: comp.ai.philosophy
From: ohgs@chatham.demon.co.uk (Oliver Sparrow)
Path: cantaloupe.srv.cs.cmu.edu!rochester!udel!news.mathworks.com!hookup!news.moneng.mei.com!uwm.edu!math.ohio-state.edu!cs.utexas.edu!news.sprintlink.net!pipex!peernews.demon.co.uk!chatham.demon.co.uk!ohgs
Subject: Re: Making a killing on the stock market
References: <D5u81n.Lv9@info.bris.ac.uk> <3kpr13$ibt@cronkite.ocis.temple.edu>
Organization: Royal Institute of International Affairs
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Date: Thu, 23 Mar 1995 09:55:19 +0000
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Somewhere between a couple of hundred million and a billion dollars have
already be spent in this area. There are arbitrage systems which track other
arbitrage systems; and have been since the mid-eighties. Neural networks
act as capable deconvoluters of quasi-periodic systems; and are able
to sort signals from junk in market data. I haven't measured it, but I
would suspect that the frequency spectrum of the money markets has changed
sharply in the last decade as a result of intervention based on this.


Ultimately, however, the value of a stock is set by the balance of risk and
return: betas, CAPM and all that. Behind that lie the realities of corporate
performance: the present value of the anticipated cash stream. Getting that
right is critical: the rest is fluff, albeit profitable fluff. 
_________________________________________________

  Oliver Sparrow
  ohgs@chatham.demon.co.uk
