From roehner at lpthe.jussieu.fr  Sun Mar 23 09:39:25 2003
From: roehner at lpthe.jussieu.fr (Bertrand Roehner)
Date: Wed Nov 16 18:06:30 2005
Subject: QH.R: (no subject)
Message-ID: <3E7DC71D.8A63EC70@lpthe.jussieu.fr>

Dear list member, 
 
This list was created in order to develop a new 
comparative approach which basically comprises 
the following steps: 
  1) First select a specific mechanism. 
  2) Identify as many historical episodes as possible 
which display and illustrate this mechanism, and collect the 
corresponding data. 
  3) Compare these episodes and derive some patterns 
and regularities. 
 
"Well and good" might you be tempted to say, "but, how 
can we find out whether this approach really works, what 
predictions does it provide, what tests do we have?" 
 
The present message gives 
a partial answer to that question. 
 
In a number of recent books (see references below) this 
approach was applied to various phenomena. As is made clear 
by the three steps listed above, it fundamentally relies on 
STRUCTURAL comparisons and therefore it is more likely 
to provide structural predictions, rather than predictions 
about the future. However, in some favorable cases structural 
predictions can also lead to predictions about the 
future. The example shown in  the attached 
graph (pdf file) is of this kind. 
It is a prediction of the course of the NASDAQ made in 
the spring of 2000 and published (in January 2001) 
in the first of the books listed below. 
 
How did we come up with that prediction? 
First, we focused on speculative episodes defined as being 
episodes during which the price earnings 
ratio  of stocks (or houses or offices) 
becomes larger than, say, 25. 
Secondly, we collected data for as many episodes of 
this kind as possible; this included the stock price peaks 
of 1881 in Paris, of 1929 in New York, of 1989 in Tokyo 
and a number of others. 
Thirdly, we studied the shapes of these peaks and 
analyzed the relationships between the parameters which 
describe them mathematically. 
 
This resulted in the prediction displayed in the 
graph. So far, it turned out to be fairly correct; 
it will be interesting to see for how long it holds. 
Next update in about 9 months or so. 
 
Any comment is welcome, 
for instance about other possible tests, 
and can be addressed either to the 
list or to myself (roehner@lpthe.jussieu.fr). 
 
  With my best wishes, 
   Bertrand Roehner 
 
 
References: 
 
* Roehner (B.M.) 2001: Hidden Collective Factors in 
Speculative Trading. Springer-Verlag. 
* Roehner (B.M.) 2002: Patterns of Speculation. 
Cambridge University Press. 
* Roehner (B.M.), Tony (S.) 2002: Pattern and Repertoire 
in History. Harvard University Press. 
 
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