Monthly ArchiveFebruary 2012



fiction 13 Feb 2012 09:03 pm

The Word Market – Part III

Hideki geevoed two months later. He looked haggard and was definitely calling from somewhere other than his studio. The major stock indices and gold prices had been steadily rising ever since he started using his algorithm, and Neil had taken that as a good sign. He had no time to talk with Hideki when his algorithm needed to respond to these new fluctuations.

“What’s up, Dekky? You finally decided to get some sunlight?”

“Something bad’s happening here, Neil. The tremors haven’t stopped and they seem to be getting longer and more frequent. They evacuated our street today! Haven’t you been following the news?!”

“Haven’t had the time to scan through the news, but I’m sure my algorithm has been diligently scanning away! Did I tell you I just tripled my earnings in 5 days?”

“You still stuck on that algorithm of yours? Listen, I gotta go, Neil. Another tremor just started. I’m not sure how much more of this we can take”

“Later, Dekky. And stop being so dramatic. California has little shivers all the time”, Neil retorted and signed out.

***

Two days after the geevo with Dekky, Neil started getting alerts on major deviations in his model. Something big was happening in the markets and his algorithm was slipping! Neil started investigating. The word-markets were reporting a large number of ‘crashes’ and ‘crumbles’, but the stock prices seemed to be climbing ever higher.

Neil finally decided to check the news feeds. And there he found it — from California, from Oregon, from all over the west coast. Something big was going down. There had been widespread earthquakes and damage all along the San Andreas Fault. So that explained the ‘crashes’ and ‘falls’ in his word-markets! The stock exchanges were going through the roof, with investors betting heavily on construction companies, oil and gas corporations, and anything else that may find itself with more work once the reconstruction efforts started. The only sector that really took a dive was the tech sector, especially companies that were based in the Valley. The market already had an answer to that too, shifting its focus on IT companies that were located in the D.C-New York corridor.

Neil’s algorithm was having its own problems. With the massive influx of words that denoted a fall, the algorithm was making the wrong picks. If only he had accounted for natural disasters in his frequency calculations… he needed to respond quickly to make the best of this situation.

Neil sat down at his workstation again. He wondered if Dekky was doing fine. He sent a geevo request – no response. He shot off a text and went back to modifying his algorithm.

The Market is unforgiving to those who wait. There was no time to lose.

*

Part I | Part II

fiction 07 Feb 2012 04:15 pm

The Word Market – Part II

The stock market is an echo chamber for those who think they’ve figured it out. There were the antiquarians, who invested based on intuition and what they heard by word of mouth or on the news. Operating on a higher level were the wonks, those who put daily price trends into complex models and squeezed them through constraints and parameters of incredible variety. What Neil had realized was that the written word and the mathematical formula actually had a way of responding to each other.

Each word in the English language had a frequency with which it occurred in usage, and Neil’s sophisticated mining of the online dictionaries and Wikipedia had yielded a treasure trove of these word associations. So when CNBC reported that a stock had ‘soared’, Neil could now predict which other stock would also rise. When @wsj declared that a stock had ‘crashed’, he could also tell with certainty which other stock would fall.

***

Of course, others had tried this algorithm and failed. Neil’s algorithm would not, because Neil had added another wrinkle to it – his algorithm would react differently to a ‘plummet’ from a ‘dip’, and he had done it all for free!

In two weeks, Neil was beginning to see results. His portfolio had been aggressive to start with – the stock market was also a casino, and like a casino, it had its own watchdogs in a decrepit part of the DHS called the SEC. Once he reached his initial goal of a million dollars in profit, Neil dialed down his investments, so as not to rouse the watchdogs. The income kept steadily rising over the next few weeks, and Neil found himself sleeping and waking at his workstation, making minor adjustments and tweaks so he could maximize his profits and minimize the risk of being caught. The algorithm, which had steadily taken over his life, showed no sign of easing up. He had become a shut-in ever since he started work on it, and now even the twitter news alerts had no interest for him anymore.

***
To be continued…

Part I | Part III

fiction 04 Feb 2012 07:23 pm

The Word Market – Part I

Neil finally had the Answer. After weeks of running through simulations and trying out algorithms, the numbers were adding up. If he played this right, he could be a billionaire in weeks.

Neil decided it was time to let someone else into the secret. He geevoed Hideki. Hideki answered from his San Francisco loft, dressed in rust-streaked and paint-splotched overalls as usual. “I found the algo, Dekky!”, he announced. “You sure it’s flawless this time? Don’t want you losing your shirt again”, Hideki said. “No Dekky, this time it’s accurate within a 3% confidence level, which is pretty damn good. I even increased the sample size this time around, and 987 of the thousand stock picks responded as expected over a period of 10 days. The sigmas were on the dot!”, he replied breathlessly.

“Stop it, I don’t want you to geek out anymore on me. I sure will be the first person surprised if the collective wisdom of the internet brought home anything more than a pointless meme and porn that manages to break rule 34 every day. ”

“This is more than that, Dekky. I’ve found out a way to weed out the false positives from twitter and facebook feeds from actual news now! It’s looking golden, bro! Why is your cam all shaky?”

“There’s that rumble again… third tremor this week – gotta go check on the cats. Well, let me know when your first million rolls in, and fly me to New York to open a cold one”, Hideki said and signed off.

Neil was finally ready to hit paydirt.

***

Part II | Part III


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