Something about Albert Einstein - Brownian motion plus

[YoursTrue]

I did not know the following until I researched something about him today -- Brownian motion. I'm going to try to learn a little more about Brownian motion. I don't know how the following has been figured by the writers, but "His Brownian motion paper is widely recognized as the first incontrovertible proof that atoms and molecules really exist—and it still serves as the basis for some stock market forecasts." How it relates to stock market forecasts is beyond me now, but I would like to find out more about "Brownian motion."

 

[idea]

Let's say you throw a large beach ball into a crowded stadium and the people in the crowd all join in the game of pushing the big ball around. If you stand far off, can only see the ball clearly, can't really see all the people, the motion of the ball would seem strange - that's how it was taught to me.

Sit by a sunny window, watch the dust in the sunslight.

 

[Yerda]

How it relates to stock market forecasts is beyond me now, but I would like to find out more about "Brownian motion."

If you observe pollen particles, suspended in water, under a microscope you see them jitter around randomly. The idea is that smaller and faster moving water particles are constantly ramming into the pollen pushing them here and there. The overall motion of a single pollen particle looks like a "random walk" over time.

Stock prices also jitter around. Each trade has effects on the price, as do other events in the world, knocking the price up and down over time. The effect is that the stock price over time starts to look very much like a random walk. The mathematics often used to describe the price of an asset over time incorporates a Brownian motion component in order to capture the inherent randomness in the process.

 

[Viker]

How it relates to stock market forecasts is beyond me now, but I would like to find out more about "Brownian motion."

Probability theory and stochastic process are great key words.

 

[YoursTrue]

To those posts above, to compare dust particles bouncing around in water with stock market prices going up or down is -- bordering on the absurd. IMO, of course. just to say. And, if that's a "scientific" theory, all I can say is have a real good day, thanks, and bye for now...Not to say that prices or changes do not affect the stock market. Anyway -- y'all have a good day.

 

[Yerda]

To those posts above, to compare dust particles bouncing around in water with stock market prices going up or down is -- bordering on the absurd.

A better way to think of it is that the mathematics used to model Brownian motion (look up Weiner Processes if you are interested) has a connection to the mathematics used to described changes in an asset price over time (look up the Black-Scholes equation if you are interested). There are similarities in the nature of both features of the world that we would like to describe and so the mathematics used is often related.

IMO, of course. just to say. And, if that's a "scientific" theory, all I can say is have a real good day, thanks, and bye for now...Not to say that prices or changes do not affect the stock market. Anyway -- y'all have a good day.

There isn't a scientific theory of the similarities in stock movements and dust particles, that I know of. It's just that the tools used in studying one thing are often useful in other areas.

 

[YoursTrue]

A better way to think of it is that the mathematics used to model Brownian motion (look up Weiner Processes if you are interested) has a connection to the mathematics used to described changes in an asset price over time (look up the Black-Scholes equation if you are interested). There are similarities in the nature of both features of the world that we would like to describe and so the mathematics used is often related.


There isn't a scientific theory of the similarities in stock movements and dust particles, that I know of. It's just that the tools used in studying one thing are often useful in other areas.

So one might say it's a metaphor, or an analogy. I mean if I tell my neighbor something he might not know about and he is interested, or maybe even not interested, nevertheless the impression is made in his mind where he may say something to others one way or another. For instance even if someone says something not true or that he does not really understand but tells someone else, the message may go on and people wll be affected.