Good News Broadcast was invited to speak and produce a special for The Water Hour series at The Campus of Excellence in The Canary Islands off of Morocco from July 6 to 14th. Campus 07 brought together the leaders of today with the potential leaders of tomorrow, i.e. the brightest of the bright young postgraduate students from the world’s leading universities with leading international exponents in the fields of science, business, politics and culture.
These leaders of today include Nobel laureates; heads of state, business and industry. The topical themes are structured around 4 areas: development and sustainability, education and values, the environment, and innovation and health. Campus 07 focused (mainly on the troubling issues in) on Africa. http://www.campusdeexcelencia.org One of the participants at the Campus 07 was Andrew E. Beer, who shared his Good News Thoughts regarding finance, in which Africa and the world needs to focus on.
The interview was reported by Adriana Regidor, Scientific Program Coordinator of Campus of Excellence 2007 To watch The Water Hour go to: http://www.wwrf.org/thewaterhour.htm .
To go to the direct link on http://www.goodnewsbroadcast.com for this interview go to: How the Securities Markets Work and Why – By Andrew E. Beer, President of Starwood Corporation. Burton Malkiel proposed the Random Walk Theory while a professor at Princeton University. Another prominent theory is called The Efficient Market Theory.
Modern Portfolio Theory intuitively presumes long term progress for diversified portfolios. It should be obvious to researchers that certain types of securities, especially equities and equity equivalents, rise considerably, sometimes more than 100%, even by 5-10-20-fold or more over sufficient time periods. These bias diversified portfolios to rise, since one such incident overcomes several which fade into obscurity or oblivion. The main benefit of Modern Portfolio Theory is diversification to reduce risk. These are not very helpful to investment professionals seeking to outperform standard indexes of securities markets. Investment professionals often suggest that the market price fluctuations resemble ripples, waves and tides, such as in the ocean. This might be considered the Fluid Dynamic Model of the securities markets.
Some investment professionals have succeeded in making profits over a series of transactions and long periods of time. They explain that they employ strategies, or tactics, credos, philosophies or other guides for their decision-making. We use the term strategies to cover all these systematic methods. We, at Starwood, have investigated, studied and/or uncovered over 32 major strategies of investing. These are employed by large numbers of investors. They have an effect on the fluctuations of securities prices in the market place which can be illustrated by charts of series of securities transactions.
In the physical sciences there is a phenomenon noted, particularly in fluid systems, called Brownian Motion. This may be a better term to exemplify the randomness inherent in the sequence of securities prices highlighted by the theoreticians. It connotes the confusion and difficulty of analysing the securities markets to obtain profits. This is another way of explaining what the distinguished Academicians have noted in their terms: The Efficient Market Theory and the Random Walk Theory.
The Efficient Market Theory holds that information which motivates investors to make transactions is so rapidly and widely disseminated that it is difficult for anyone to find opportunities for making money dependably over the long term. The Random Walk Theory provides a somewhat analogous view. It holds that no sequence of fluctuations can be followed as a forecasting method for subsequent price fluctuations. Both of these theories seem to characterize the common conception that the securities markets, particularly the stock market, appear chaotic as a result of unrelated, random transactions.
However, our experience at Starwood suggests otherwise. We discern repetitive patterns, currents, anomalies, sequences of transactions, notable interfaces and clashes of strategic interaction by various groups of investors making investments or trading in the market place. These have been described and documented with probable forecasting inherent in the recognition of distinctive types of patterns or charts. For each of two successive decades we achieved a rate of return of 21% per year, and ranked in the top 2% of investment managers in the universe of the Thomson Financial Perascope.
This led to almost a 50-fold gain for the Starwood Strategic Program over the 20 years. This program served as a guide for the management of substantial accounts for a large number of clients of Starwood Corporation, an investment advisory organisation. We note that physical scientists who have studied evidences of chaos in the universe have observed that internally, to some extent, currents, swirls, spirals, disks, vortexes and other geometric shapes can be recognised. On the periphery or borders of chaotic behaviour, especially where there is an interface or surface area with some other fluid, considerable structure evolves.
In these areas turbulences occur. This manifests as visually observable on charts and mathematically expressible pursuant to or analogous to the laws of fluid dynamics. We, at Starwood, and our clients, have benefited from the following perception. The interaction of transactions by groups of investors who apply various strategies of investing elicits price fluctuations which act akin to fluid dynamics. This may be termed the Fluid Dynamic Model of Transactional Price Fluctuations.
This way of thinking may be more helpful to investment professionals who seek a guide for outperforming the standard indexes of price performance. We have accomplished high comparative performance for a period of twenty years by employing mostly classical strategies of investing. We are now offering advanced strategies of investment management and combinations of classical and advanced strategies. We recognise that certain experts have evidenced very high rates of return, of well over 100% per year.
They employ strategies which harness differentials in prices, hedged pairs of securities or commodities, interest carry, and other methods and procedures for harvesting profits from the turbulent or most rapidly fluctuating types of securities. We intend to invest with, or in accordance with, such experts and assist them to automate and/or improve their methodologies. This Fluid Dynamic Model of the Strategic Interaction of Investors may assist investment professionals to research and apply ways and means of outperforming the standard indexes.
It may possibly allow mathematically inclined investigators to express strategies that can be employed profitably in the securities markets. These may include some of the classical ways which investors have employed to develop fortunes. It may also enable those who seek rapid and outstanding results to refine their methods and procedures in order to include certain advanced ways and means. We are engaged in incorporating and refining such advanced investment techniques.
For further information, you may contact: Andrew E. Beer, President , Starwood Corporation, 233 Broadway, Suite 2201 New York, NY 10279, Phone: (212) 354-7742 e-mail: firstname.lastname@example.org Reported by Adriana Regidor, Scientific Program Coordinator of Campus of Excellence 2007