We need antibiotics!

Most of today’s finance theories remind me of medicine 100 years ago (and to some degree of how medicine still is practiced). In finance we specialized on study and model the symptoms of the market. There is “nothing” directly wrong with this. We had to start out with something. If a doctor knows the symptoms of cold and tells the patient to stay warm and relax, this is often exactly what is needed.

If we know the cold is generated by a particular bacteria we can study it and find ways to kill it in a hopefully efficient manner. We now suddenly have more powerful tools of handling the situation, and we also understand the situation from a much deeper level. Finance is in strong need for a more fundamental understanding of what causes the symptoms. Some attempts has been done on this topic, but so far they have all “failed”. We need new and deeper theories. This will not necessary replace our symptom theories; but will add a lot of power and understanding to our current symptom theories. One of the best remedy for cold is still to stay warm and drink something warm, antibiotics is not necessary recommended. But in finance we have not yet even discovered the antibiotics, but we will!

Well to compare with medicine is not really fair, they have got deeper than symptoms studies but how much medicine is not practiced (and also research) is done wrong because most doctors have zero clue about probability theory…. I bet the truth is scary

Quantitative finance probably has the most advanced symptom theories of any scientific discipline, but we still need to also understand the more fundamental principles of finance. We need something fundamental, a place to start is possibly to go very deep, and build the theories form that level? The future will tell, or should I say the future will possibly tell us once again, knowledge possibly comes and goes in a sequence and in alternation.....

"Since the matter and substances of things are indestructable, all parts are subject to all forms, so that Each and Everything becomes Everything and Each, if not at one and the same time in a single minute, then at various times and various moments, in a sequence and in alternation" Giordano Brune 1584