Stuart Kauffman provides many insights into nature, evolution, and other subjects in the following videos:
Stuart Kauffman – Beyond Belief 2007
The Re-Enchantment of Humanity: Dr. Stuart Kauffman
Stuart Kauffman on Beyond Reductionism
Reinventing the Sacred with Stuart Kauffman part1
Stuart Kauffman Returns to Gund 1/2
Stuart Kauffman – Mind in the Poised Realm
Biologist and complexity theorist Stuart Kauffman on preadaptations in evolution
Well done NOVA. Earth From Space, a NOVA documentary detailing the information revealed about Earth through satellites, is a must see. The visual images of the atmospheric processes and natural phenomenon are the best I have seen and really show the inter-connectedness of the environmental processes on Earth. Follow this link to watch it on YouTube.
Download the HD version here or buy it here.
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| The Life of a Star – Understood Through Statistics |
After reading Edward O. Wilson‘s On Human Nature, several opinions and ideas formed; I think the spiritual and universal awareness/wisdom of humans follows a distribution function (perhaps Gaussian). In other words all humans are not born with the same potential to be aware of deeper concepts and principles. Some individuals are not able to comprehend universal ideas and principles of life; while others are deeply in tune with the essence of the universe. This awareness would seem to be genetic. I say that because there have been people in all cultures throughout history who have possessed such spiritual and universal wisdom. Also, no amount of cultural teaching will allow one to obtain such wisdom. We are simply born with a high potential or low potential and this expresses itself naturally.
Thus, there is not an object equally inherited by all humans which we could call a “soul” or consciousness. Individual humans are conscious or aware of the universe in varying degrees. This is related to the origin of consciousness. Was there an Adam, i.e. a first human who was conscious? Have organisms always been conscious to a certain degree, depending on various factors? Could we consider the universe itself conscious? Interesting ideas. I would suggest reading Douglas Hofstadter‘s book about strange loops and other books on consciousness here.
Modelling market returns as independent random variables/martingales is the same as modelling the solar system as a geocentric system with the planets and Sun circling around Earth in epicycles. Predictions of the future are often vastly incorrect in both models. Quite surprisingly, this solar system model survived for thousands of years, despite it being totally incorrect. Then came Tycho Brahe who introduced a modified version of this Ptolemaic system. In Brahe’s model the planets orbit the Sun which orbits the Earth. While this model improved the accuracy of planetary motions, it failed to model reality. Perhaps it could be said that stochastic jump processes are equivalent to Brahe’s model of the solar system. While these jump process do a better job at modelling the returns than simple stochastic processes, they fail to grasp the underlying true model of returns.
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| Poor Market Forecasting |
And as we now know, the true model (for now) of the solar system was introduced by Aristarchus (Copernicus and Kepler helped bring forward this model) and predicts planetary motions with near perfection and represents the actual state of the solar system. I believe that the analogous model for stock returns has been introduced by Didier Sornette, Anders Johanson and others.
There is the interesting possibility of this: the stochastic volatility model referred to as the Ornstein-Uhlenbeck process represents the physical process of a “noisy relaxation process.” The Wiener Process represents Brownian motion or motion of a particle through a gas or liquid. So, if we consider the movement of a stock through a virtual container of many stocks (these stocks are the atoms in the Brownian motion) then we need to ask ourselves: What does the price, interest rate, returns, etc. mimic? It is NOT the equations! BUT the physical processes themselves. Why is an interest rate in a state of disequilibrium in the first place… that it must try to relax? Who put the stock in swarm of human hands all independently moving… It more correctly seems that the traders are following its movement at every second, waiting to grab it when the time if right (thus not independent)?
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