Benoit Mandelbrot, RIP

[JEast]

The father of fractal geometry, passed away over the weekend. He was 85.

 

http://www.nytimes.com/2010/10/17/us/17mandelbrot.html?hpw

 

http://www.amazon.com/Misbehavior-Markets-Fractal-Financial-Turbulence/dp/0465043577/ref=sr_1_1?s=books&ie=UTF8&qid=1287411617&sr=1-1

 

 

[opihiman2]

Here's something interesting about Benoit: guess what his middle initial was?  B.  Do you know why?

[Munger_Disciple]

The middle initial B was given by Benoit Mandelbrot himself. It means nothing.

[Munger_Disciple]

I am saddened by Mandelbrot's passing. He is one the most important inter-disciplinary scientists of the last 100 years. He did amazing work on fractals, their properties and application to fields ranging from medicine, engineering, geography, finance & computer technology.

[opihiman2]

The middle initial B was given by Benoit Mandelbrot himself. It means nothing.

 

Exactly.  People usually think it's because of recursion and fractals.  I would be impressed if you knew this without looking it up.

[Munger_Disciple]

I will let u figure out whether I knew w/o looking up or not.

[manualofideas]

I will let u figure out whether I knew w/o looking up or not.

 

My guess is that yes, you knew it without looking it up.  :D

 

On a more serious note, Mandelbrot deserves a ton of respect for his mathematical genius, but I've always found it difficult to apply his insights to investing.  If anyone has views on this, it would be great to hear them.

[opihiman2]

I will let u figure out whether I knew w/o looking up or not.

 

I'm assuming this is you:

 

http://www.linkedin.com/pub/sreen-raghavan/4/a8/518

 

If so, then you probably did know that without looking it up!

[eclecticvalue]

Have you read his book Misbehavior of the markets?

 

Also check out this TED talk he did

 

[twacowfca]

I will let u figure out whether I knew w/o looking up or not.

 

My guess is that yes, you knew it without looking it up.  :D

 

On a more serious note, Mandelbrot deserves a ton of respect for his mathematical genius, but I've always found it difficult to apply his insights to investing.  If anyone has views on this, it would be great to hear them.

 

 

I knew that because #2 son has the Sierpinski Gasket tatooed on his arm, and he told me that weird factoid.  A good book about practical application of fractal geometry for investing is Why Stock Markets Crash by Didier Sornette.  :)

 

The biggest take away from fractal geometry is that there is often underlying, recursive order within phenomena that appear at first glance to be random.  In the stock market this shows up as kurtosis, a warped bell shaped curve that is hyper normal for the most part and then goes crazy for briefer periods.  Any investor who appreciates this has a huge advantage over the herd.  Calling turns in the market or with single stocks is probabilistic, but it is possible to get an edge in prediction of changes in direction with study.