Thursday, September 21, 2006

Decode the Marketing Blurb

Here is a fun game for all of you. A certain vendor sells decision systems over a bunch of vertical industries. Here is a blurb from one of their webpages that outlines their offerings for the financial industry:

Modeling: Price and Risk Models
We model the equity market as an open, irreversible, far from equilibrium thermodynamic model subject to dynamic constraints. This approach results in a bi-linear model composed of two dynamical sub-models: price evolution and risk evolution. The price evolution sub-model represents the behavior of pricing of commodities and a market aggregate as a function of exogenous demand and control actions. The risk sub-model represents the behavior of risk as a function of exogenous uncertainty and actions. Further, the risk sub-model represents the uncertainty range of the values computed by the price evolution model.

The game here is to decode the blurb and tell me what this system does.

©2006 Marc Adler - All Rights Reserved

1 comment:

Anonymous said...

It hopefully attracts gullible customers who watch Numb3rs on CBS.

In a world where people buy on rumor and sell on news there is usually limited success at best in attempting to map physics terminology/concepts to financial markets.

IMHO a better approach, and one with even more opportunity for ground breaking gobbledegook, would be to model the markets based on the principles of Evolutionary Cybernetics (see ).

This would allow the combination of Chaos Theory, Universal Darwinism, Memetics, Psychology/Ethics, and the Peter Principle, amoung other things! Any recent Scott Adam's publication should provide a good starting point.

- ratbert