Bull vs. Bear, Cheerful vs. Somber – Farid Shirinfar

Monday’s lecture included a video that discussed the applications of Fibonacci sequence and fractals in the stock market. This connection was very interesting and thought provoking to me.

The video is part of a documentary called History’s Hidden Engine which investigates the relation between social moods and social activities, in particular buying and selling of stocks and consequently stock prices. The producers, a group of socionomists, believe, in contrary to the general public, that social moods cause social activities.

Bull markets encourage artists to produce happy and joyous music or adventurous movies while bear markets encourages them to produce morose songs or horror movies. For example, during 1931-1933, one of the weakest bear markets in history, major horror movies such as Dracula, the Mummy, and King Kong were made. In contrary, when the stock market gained momentum in 1937, Disney produced “Snow White” a very popular cartoon with a joyous theme. In the next 30 years, Disney continued to make great family cartoons until the late 1960’s when a weak bear market was seen. From the 1960’s until 1980’s, Disney didn’t make any popular hits as the stock market struggled. Finally, in the 1990’s during a bull market, Disney made a few popular hits. It’s of course not to say that certain genres totally vanish during a bull or a bear market, but it’s the intensity and popularity of a genre that seem to be affected by the market status.

stocks

It’s been also observed that the market status has direct effect on fashion. During the bull market of 1920’s, dresses were shorter and showed more skin as oppose to the bear market of 1970’s where dresses were longer and covered most of the body. Most designers believe that this year’s fashion is more conservative which aggress with the record-low performance of stocks, especially in July and August.

How does this describe the connection between math and arts? Firstly, art is a venue for expressing social moods. Singers, producers, designers seem to be reflecting upon and following the same trends as stock market which is a very mathematical and statistical oriented environment.

On the other hand, social moods seem to be causing the market to behave in certain ways. According to Robert Prechter—one of the fathers of socionomics, “Social mood arises endogenously from unconscious herding impulses inherited through evolution and is patterned according to the Wave Principle.” Consequently, there is much to be gained by studying humans from a natural perspective. The more we understand the acting elements of a herd, the more we are able to predict social moods. This is where artists can play a significant role by collaborating with mathematician in detecting patterns in nature. For example, artists, probably more than any other group, have been exploring fractals. Interestingly, stock prices form a fractal. Graphing stock prices from 1700’s to year 2000 reveals the same pattern as graphing them over years, weeks, days or even from 3:56pm to 3:59pm of October 6, 1997. In other words, the same pattern shows up whether they’re graphed over the span of 3 minutes or 300 years, a ratio of 30,000,000. Consequently, the combination of eagle eyes of artists and rational skills of mathematicians can lead to great accomplishments.

 

History’s Hidden Engine may be viewed at:
http://www.socionomics.net/films/history/

Advertisements

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: