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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