Rate of Descent Slows...

[Sharky]

Re: Rate of Descent Slows...

But is it not true, mathematically, that if the second derivative has changed towards upward curvature (which is what the numbers indicate) that it means the bottom is on its way eventually... unless ... the inflection changes again to negative curvature?

The second derivative is not predictive, even in the slightest. Current trends are not indicative of future trends. In fact, the underlying function is not continuous, which means the derivatives aren't even defined.

When they are valid, increased order derivatives are actually extremely unstable. Again, just look at any stock price chart. If the second derivative was meaningful, then why isn't that a popular method for technical analysis?

[mcgurme]

Re: Rate of Descent Slows...

The second derivative is not predictive, even in the slightest. Current trends are not indicative of future trends. In fact, the underlying function is not continuous, which means the derivatives aren't even defined.

When they are valid, increased order derivatives are actually extremely unstable. Again, just look at any stock price chart. If the second derivative was meaningful, then why isn't that a popular method for technical analysis?

You just said the same thing I said, only in different words (note, I didn't say anything about the predictive capability of the second derivative).

[metalman]

Re: Rate of Descent Slows...

You just said the same thing I said, only in different words (note, I didn't say anything about the predictive capability of the second derivative).

'second derivative'

'green shoots'

let's face it. our economy is one big managed lie that's too big to fail...

[Sharky]

Re: Rate of Descent Slows...

You just said the same thing I said, only in different words (note, I didn't say anything about the predictive capability of the second derivative).

Sorry, I apparently misinterpreted what you said:

But is it not true, mathematically, that if the second derivative has changed towards upward curvature (which is what the numbers indicate) that it means the bottom is on its way eventually... unless ... the inflection changes again to negative curvature?

I interpreted "the bottom is on its way" part to be predictive... Let me try to re-state what you said: "when prices are accelerating downward at a lower rate than they used to, the bottom is on its way, unless prices start to accelerate up."

First, that's mathematically false. The current value of the second derivative says nothing about how far away you are from a minima. As I said before, prices often accelerate downward most rapidly right before they turn around.

Second, if you think of the bottom in terms of time and not price, that statement is still false. The current value of the second derivative says nothing about when the next minima will occur.

What is true is that prices can only fall so far, so any fall in price puts the current price closer to the lowest it can get. But that's obvious, and not helpful in the slightest from an investment perspective.

[Guest]

Re: Rate of Descent Slows...

Another good benchmark for gauging when one is nearing the exhaustion point of a general market crash, is to count how many carcasses are lying around. Lots of carcasses = a mature trend. Admittedly the method is a little rudimentary.

Let me try to re-state what you said:

"when prices are accelerating downward at a lower rate than they used to, the bottom is on its way, unless prices start to accelerate up."

First, that's mathematically false. The current value of the second derivative says nothing about how far away you are from a minima. As I said before, prices often accelerate downward most rapidly right before they turn around.

Second, if you think of the bottom in terms of time and not price, that statement is still false. The current value of the second derivative says nothing about when the next minima will occur.

What is true is that prices can only fall so far, so any fall in price puts the current price closer to the lowest it can get. But that's obvious, and not helpful in the slightest from an investment perspective.

[Sharky]

Re: Rate of Descent Slows...

Another good benchmark for gauging when one is nearing the exhaustion point of a general market crash, is to count how many carcasses are lying around. Lots of carcasses = a mature trend. Admittedly the method is a little rudimentary.

Sounds good to me. Just avoid getting into the second derivative of the number of carcasses....

Of course the problem today is how can you tell the difference between the living and the carcasses? Banks and most of the FIRE economy seem to be the walking dead. Do they count?

[Guest]

Re: Rate of Descent Slows...

Suppose: Banks = 3/4 carcass averaged. FIRE economy walking dead = 1/2 carcass per each ambulant. How high are they presently stacked?

Sounds good to me. Just avoid getting into the second derivative of the number of carcasses....

Of course the problem today is how can you tell the difference between the living and the carcasses? Banks and most of the FIRE economy seem to be the walking dead. Do they count?

[Sharky]

Re: Rate of Descent Slows...

Suppose: Banks = 3/4 carcass averaged. FIRE economy walking dead = 1/2 carcass per each ambulant. How high are they presently stacked?

Let me guess. To the moon? Do I detect a trend here in your thinking?