Physicist on the stock market

Grzegorz Link (University of Warsaw, Faculty of Physics - once, but that was a long time ago, now: takityle), moc.liamg|knil.zrogezrg#moc.liamg|knil.zrogezrg

Summary

The stock market has a very, very bad reputation, not only among the general public, but also amongst scientists. It's seen as a dirty, repulsing mechanism, or merely a vehicle for making filthy rich people… well, more filthy rich.

To me - that just isn't the case. The stock market is for the people, all of us, to understand and to use. Money is for the people, not the other way around. Specifically - our lives depend on it, even if only through our taxes, work and pension funds - all somehow invested into this big financial system.

My aim with this talk was to show that there exist loads of myths and misconceptions about investing and speculating that ought to be uncovered and crushed, in order for normal, science- and fact-minded debate on the topic. The market today is seen as a world only for the selected few and with little opportunity for idea-minded scientists. To the contrary - the financial markets aren't something exotic, they have a severe and lasting impact on both the layman, and the scientist's lives, and more importantly - there appears to be great opportunity for scientific inquiry and exploration.

The main point: the way financial markets function is a largely undiscovered, unpursued scientific field. This is an opportunity. Unraveling the way markets work will not only have a great personal benefit (fruits of scientific labor and profits, obviously), but could severly influence society, due to the impressive amounts of capital flowing through these markets on a daily basis.

I tried to share my excitement over this discovery, my own personal experiences with investing, and explain what I believe to be the next step in debunking the myths of the stock market. Namely - starting up a privately funded, open-minded & science-oriented hedge fund, employing falsifiable research methods to understand and make use of the market. Understand and develop workable strategies of investing and distribute this knowledge, make it transparent and accessible to others.

Spin-off

Since the time of this talk, we've managed to start a website for the project, up and running at takityle.pl. I must acknowledge offtopicarium's role in this achievement, as it was an effective motivator for speeding up the project - the website was up in about two weeks after the offtopicarium conference.

Slides

Further reading

Some of the people mentioned in the talk, and their work:

  • Daniel Kahneman - psychologist and recipient of the Nobel Memorial Prize in Economic Sciences. Much great work on behavioral economics, psychology of judgement and decision making, cognitive biases and the way we percieve economic ideas. Publications & Bibliography
  • Tobias Preis - econophysicist working on behavioral science, finance and complex systems; retrieving patterns localised in Big Data. Publications
  • Nassim Taleb - essayist, economist, hedge fund manager; scholar focused on the concepts of randomness, probability & uncertainty. Bibliography
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