So, by a very strange set of events I found myself listening to a GCN produced audio show about giving the little guy the tools to beat the financial markets. Frances Newton was the guest, and after looking at her website she looks more like a supermodel than a predictive data modeler.
http://www.francesinsights.com
GCN Crash! show
http://www.gcnlive.com/programs/crashAreYouReady/
Audio program (mp3 ~ 21MB)
http://podcast.gcnlive.com/podcast/crash/063010.mp3
In any event, I think this audio program is worth while listening to because of how clever it is. Frances is selling a product that predicts market behavior by measuring market 'momentum', and therefore supposedly helps the little guy beat other little guys by having more information than the other little guy.
What is NOT being discussed here is how this sort of programmatic trading in the market makes the little guy more predictable, and therefore easily to understand and beat. In a sense, Frances' little program will actually make it easier for the big boys because the big boys can dissect the algorithms in her program (assuming that the big boys didn't build it in the first place) and incorporate those alogrithms in their own trading systems, and therefore become MORE efficient at winning.
Frances' system rationalizes how the human engages the market in a predefined way, and therefore make that engagement measurable and therefore MORE easy to beat. The hardest market to beat is the irrational illogical emotional market made up of millions of individuals. So, segment and group those individuals into systems that you define and build, and voila, you now know exactly how to beat them, and can actually program how much you beat them by and when. In other words, rationalize the groups, and you can use science to dominate those groups in ways that are undetectable.
Frances gives you hints in the show about who she is and what she represents. She tells us that here entire family has been in the financial markets their entire lives, but she does not tell us who they are. She is also obviously not just another pretty face, but most like a PhD level physicist or mathematician, as her command of the science, as she gives away in the interview, is quite high level. Finally, the fact that this show and her interview is hosted on GCN kind of gives away the game and the setup of the ignorant public.
I came away from the show with continuing amazement at just how evil the subtle sciences of manipulation are, and how impossible it will be for the average person to ever reveal the underlying traps inherent in these extremely attractive marketing messages (and actors).
