QuoteOriginally posted by: gardener3QuoteOriginally posted by: N“I believe that a scientist looking at nonscientific problems is just as dumb as the next guy"Everything is a scientific problem. Science is a method, not a set of things. Just because the problem is complex doesn't mean it falls outside the realm of science.

I agree 'Science is a method' or a form of inquiry. But that's the point. You apply the right method to the right problem. If you have a medical problem you go see a doctor, not a mathematician. The common example given is the difference between a wink and a blink. The eye blinks every 10 seconds or so. There are biological/mechanical reasons for this and can be easily modeled. A person can wink at another person for a number of reasons, this is much harder to explain by simple scientific methods or models. The average Joe on the street will do just as a good job in explaining why I winked at someone as a medical doctor. I think that's what Feynman was getting at.Now is the stock market more like blink or a wink?

If there weren't a difference between science and reason, science would be worthless. Science is benefitting from the reason of the millions who came before you. Take a person who enjoys that benefit - who has been trained in science - and remove that benefit, and there is little reason to predict he will be ahead of anyone else who doesn't enjoy the benefit. The quote merely means to discriminate between education and intelligence. Objections to it arise from the correlation between education and intelligence, where money spent educating the intelligent is better spent.

QuoteOriginally posted by: crowlogicQuoteOriginally posted by: gardener3QuoteOriginally posted by: N“I believe that a scientist looking at nonscientific problems is just as dumb as the next guy"Everything is a scientific problem. Science is a method, not a set of things. Just because the problem is complex doesn't mean it falls outside the realm of science.Hey crow,Watch that attribution. I'm no fan of Feyman.And g3,Perhaps you and I are the only people on this forum who recognize that BM and stochastic process have nothing to do with finance. You're right that the paper is weak on finishing the math after a nice strong introduction. If you were familiar with supersymmetry you'd see the trading connection.N

QuoteOriginally posted by: NQuoteOriginally posted by: crowlogicWatch that attribution. I'm no fan of Feyman.NMy apologies, corrected. Maybe I shouldn't have stopped at the wine bar on my way upstiars. What do you not like about Feyman though?

QuoteOriginally posted by: gardener3I agree 'Science is a method' or a form of inquiry. But that's the point. You apply the right method to the right problem. If you have a medical problem you go see a doctor, not a mathematician. Well, that's a slight stretch.. it's like saying, which doctor do I see? The doctor thats working in a rotting building for the last 20 years, or the badass working in some prestigious place.Math is just a set of tools, just gotta pick the one for the job or make some new tools out of old ones if they don't exist. I don't decide, gee, this problem is hard, maybe I'll go ask a linguist instead.Quote The common example given is the difference between a wink and a blink. The eye blinks every 10 seconds or so. There are biological/mechanical reasons for this and can be easily modeled. A person can wink at another person for a number of reasons, this is much harder to explain by simple scientific methods or models. The average Joe on the street will do just as a good job in explaining why I winked at someone as a medical doctor. I think that's what Feynman was getting at.Now is the stock market more like blink or a wink?I'd say its somewhere between, because to trade successfully you need to be able to predict the aggregate behaviour of people, not individuals, and crowds behave much more predictibly than individuals due to the logistics of how they all communicate with each other.

I've been thinking a lot about this..working on some microstructure models...and when you get down to it, the trading happens in discrete levels of (usually) pennies.It is very common to take log prices, and assume the value is continuous but any model that doesn't take at least this assemtry into affect is going to be crap.Also, not only can you see the 'last trade price', but every single quote in the limit order book for all exchanges, happening at different points in time, subject to measurement-delay uncertainty(network).That is an absolute flood of data, all with a complex structure, asymetric discretized values, etc. It is amazing if any simple formulas can come close to matching reality.QuoteOriginally posted by: NWow... I agree with scholar. Most of you Wilmott guys are just plain stupid!Finally, the dynamics in finance time series are quantized and stable to better than one part in 10,000,000 just usual Hamiltonian systems.

QuoteOriginally posted by: crowlogicQuoteOriginally posted by: NQuoteOriginally posted by: crowlogicWatch that attribution. I'm no fan of Feyman.NMy apologies, corrected. Maybe I shouldn't have stopped at the wine bar on my way upstiars. What do you not like about Feyman though?I don't like the fact that he set back physics 50 years or more with his crappy, simpleminded math. Although Gibbs probably distroyed as much math and physics for over 100 years. Because of these two guys, the solution to Navier Stokes, string theory, Riemann conjecture, Hadarmard conjecture, etc. has been elusive to anyone who has studied physics or mathematics at a university. Once the brain has be poisoned, it's difficult to go back the 19th century roots of 'correct' mathematics and physics and see the light.

There is a book by Belal Baqi on quantum theory application to finance. Baqi incidentally is a leading research fellow in the field of String Theory. Very well qualified. The book is readable. N, your comments on Feynman and Gibbs are rants of a mad man who has lost the race. Think like this, it is because of these guys you and me have probably been lucky to know what is correct way of doing maths in physics. everybody contributed his bit.Do you say that Eienstein should not have been there since he never agreed with Quantum mechanics. According to you, he probably was the most stupid scientist ever born!! You see coin tossing is such a simple experiment and a man with above average intelligence could appreciate the 'uncertainty inherent' in 'material existence'. The moment you measure, you prode and induce the change.Eienstein was not good enough to appreciate probabilistic interpretation EVEN if he knew about brownian motion. You are not the first guy who did anything worthwhile while doing a Ph.D., my friend.So don't call all of us 'plain stupid'. There is always a probability of we meeting each other somewhere on earth,no matter how less the chances are , and then, assuming that I have a gun in my hand, what is the probability that the bullet will miss your head? What is the probability that the bullet will miss your heart?

cosmo,You mean the booK "Quantum Finance : Path Integrals and Hamiltonians for Options and Interest Rates". It's pure nonsense. Hamiltonians do not have a state-space on a Riemann manifold. That means no harmonic oscillators, no QM, no probability theory, bad path integrals, etc. Your boy has zippo math background. PS. And cosmo I did my PhD so long ago I forgot the topic. But at least it was in Operations Research rather than in (anti-mathematical) Physicis.Enjoy!

N,Just for the record: Though I appreciate your support of my thoughts on the level of discussion that we sometimes see on this forum, I do not share your views on Feynman, Gibbs and Einstein. My background is in theoretical physics, not in operational research, which admittedly makes me biased in my views

QuoteOriginally posted by: scholarN,Just for the record: Though I appreciate your support of my thoughts on the level of discussion that we sometimes see on this forum, I do not share your views on Feynman, Gibbs and Einstein. My background is in theoretical physics, not in operational research, which admittedly makes me biased in my views Most theoretic physicists (back in the '80s) would surely agree with my assessment of Feynman and Gibbs. When did you graduate? And you don't think Einstein got world-class help with differential geometry do you? Otherwise gravity which is described by translational torsion on a E(8) manifold would have been a slam dunk, chip shot, and cake walk for Einstein to develop fully into a unified theory. Again just for the record, which aspect of theoretical physics did you focus on?

gauge theories and particle physics (ex strings)

At least with the physical world we know (or strongly suspect) that there is something real out there independent of us. Markets are competely different - they're social constructs and self-referential in a way that doesn't fit within any physical theory. As an example, if somebody comes up with a market trading strategy that makes money with very high probability then it will not work for everybody and will not work with capital above a certain size.If you want to look for a physical paradigm then I like complexity theory (out of chaos theory by evolutionary dynamics). It doesn't help make money but it gives a nice mental construct to help think about markets.

QuoteOriginally posted by: FrasheIf you want to look for a physical paradigm then I like complexity theory (out of chaos theory by evolutionary dynamics). It doesn't help make money but it gives a nice mental construct to help think about markets.Complexity theory can be pretty broad.. the simple models probably won't help you trade much, but the more complicated ones can be helpful. Physical auto-associative delay-differential models, etc