As to a greater extent than prospectors displace in, the low-hanging fruit is gone. Now golden must survive extracted from rocks in addition to from deeper inwards the ground. This requires particular equipment. The unmarried miner alongside his pan, combing through the river bed debris, no longer has an "edge" inwards discovering gold.
Still later, equally to a greater extent than of the territory is mined, extracting what remains becomes a to a greater extent than complex task. Deep drilling into the soil in addition to exploration of to a greater extent than remote mount areas is required to brand the investment of fourth dimension in addition to endeavour worthwhile. Individual miners, picking through areas that cause got already been explored, cause got most no wages inwards discovering gold--even though they yet recount the stories of big strikes only a few years prior.
A well-mined expanse agency that either you lot cause got to discovery novel areas to explore or you lot cause got to discovery novel agency of exploration. In the illustration of natural gas in addition to oil, fracking has been a novel way of exploration. Drilling inwards the Arctic would survive an illustration of finding novel areas to explore. Either way, ingenuity is required to discovery value i time others cause got been searching for a while.
Financial markets cause got been well-mined for a while. Excellent traders, portfolio managers, in addition to organization developers roughly the globe cause got been attracted to the golden rush of markets. While looking for nuggets of profitability inwards novel ways in addition to inwards novel places does non guarantee success, looking for them where others cause got been searching for years alongside sophisticated tools inevitably invites failure.
I late cause got been posting on the topics of understanding vs. predicting markets; looking at markets inwards novel ways; in addition to using quant processes to aid discretionary expertise. The mutual theme is becoming ameliorate at the exploration for profits past times looking at novel things in addition to looking at erstwhile things inwards novel ways.
Above is a nautical chart of what I telephone cry upwards the Momentum Curve. It takes every stock inwards the SPX in addition to gauges whether it is trading higher upwards its 3, 5, 10, 20, 50, 100, in addition to 200-day moving averages. The aggregated information are charted (available through the first-class Index Indicators site), in addition to then that you lot tin hand the sack come across how the percentages of stocks shift over time. Observe from the graphic that--going into Friday's session--we had been undergoing a meaningful short-term correction (most stocks moving below their 3, 5, in addition to 10-day averages) inwards a potent uptrend (most stocks higher upwards their 100 in addition to 200-day averages).
It turns out that the shape of the Momentum Curve is of import inwards forecasting hereafter stock marketplace returns. The render profile looks rattling dissimilar depending on where the kinks are inwards the curve, whether the fold is steep or flat, etc. I discovery it useful equally a qualitative tool--it provides a quick visualization of where nosotros stand upwards across multiple fourth dimension frames--and also equally a beginning of quantitative hypotheses regarding fold shape in addition to forwards cost movement.
Some of the best marketplace tools don't generate conclusions. Rather, they advise hypotheses worth testing. The start stride inwards finding fresh answers is call for fresh questions.
Further Reading: The Psychology of Quantitative Analysis
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