The Impossible Keeps Happening The bell curve says a five-sigma day should occur once every 14,000 years. Our data contains 2,151 of them. On April 21, 2020, the front-month contract for West Texas Intermediate crude oil settled at negative thirty-seven...
The Nile River’s Secret A hydrologist measuring floods on the Nile in the 1950s created the tool that reveals how deep market memory really goes. In Episode 1, we proved that markets carry memory. The autocorrelation of absolute returns persists...
The Random Walk Is Dead How we tested the most fundamental assumption in finance, and watched it fail in every market on earth. For more than a century, the dominant theory in finance rested on a single, elegant assumption: price...
The Question Something is wrong with the model. This series finds what. On a single day in October 2008, the S&P 500 fell by a magnitude that the standard model of financial markets said should not occur once in the...
A Synopsis of the Complete Ten-Part Series Most writing about financial markets borrows its language from engineering. Markets are described as mechanisms. Prices are signals. Portfolios are constructions. Risk is something to be measured, managed, and minimised through better instruments...
Where the River Meets the Sea We began this series at the river. We watched how water carves channels as it flows, how the landscape shapes the current and the current reshapes the landscape. We followed the river through its...
The Watchmaker’s Absence In 1802, the theologian William Paley posed a famous argument. If you found a watch lying on the ground, he wrote, you would not assume it had assembled itself. The intricacy of its mechanism, the precision of...
The Monoculture Trap In the 1840s, Ireland grew potatoes. Not some potatoes. Almost entirely potatoes. The crop was efficient, calorie-dense, and reliable. It fed a growing population on limited land. Year after year, the same variety was planted across the...
The Forest That Remembers Walk through a forest that burned decades ago and you will see the fire everywhere. The trees that survived bear scorch marks on their trunks, dark triangles pointing toward the sky. The species composition...
The Paradox of Suppression For most of the twentieth century, the United States Forest Service followed a simple policy: suppress all fires. Every fire was an enemy. Every fire was fought. The goal was zero tolerance. The forests would be...
