The Market Equation

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The Market eQuation (MeQ):

Today we are commencing our investigation and outreach to discover what we will call the Market Equation.

Basically the idea is to come up with a mathematical equation and rating or ranking system to assess the state and status of various markets.

Whether this will lead to a theory of Markets that can compete with some of the other theories in existence is open to debate.

The basic premise is this:

There should be a methodology to access the Openness and Fairness of any given market versus other comparable markets.  This specific ratio or result should therefore determine the individual participant’s level of engagement and commitment to that specific market.  The result should also be able to be repeatable over time in order to elicit trends and movements of particular markets relative to each other.

The basic equation can be expressed as MA²R⁴K²E³T³ = OF outcome (Open & Fair).

 

Therefore:

OF = (A)² x (R)⁴ x (K)² x (E)³ x (T)³

 

And derives from the Market Equation Table listed below:

 

The Market Equation Table

  

O	Open
F	Fair
M	Multiple
A	Accessible	Adjoining
R	Random	Rapid	Regular	Repeated	Regulated	Risk
K	Complex	Connected	Competitive
E	Effective	Efficient	Equilibrium
T	Technology	Time	Trade

Key:

Subjective measure

Objective (External)  measure

MA²R⁴K²E³T³ = OF outcome

Therefore: OF = (A)² x (R)⁴ x (K)² x (E)³ x (T)³

 

Our astute readers might already seen through this equation?

By dropping the M (which will always be 1) the letters that remain result in the word raket.  RA(C)KET?

With the additional C, being the complex bit, ultimately the Market Equation becomes a COMPLEX RACKET.

theMarketSoul ©2011

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