Saturday, November 5, 2016

Joe Weisenthal and Tracy Alloway: "What Mathematical Models of Herding Cows Can Teach Us About Markets"

From Bloomberg, Oct. 31:
Every week, hosts Joe Weisenthal and Tracy Alloway take you on a not-so-random walk through hot topics in markets, finance, and economics.

Investors are often said to exhibit herding behavior when they follow each other into crowded positions — creating market bubbles that are susceptible to sudden pops when everyone begins stampeding for the exit.

This week we take the analogy literally and speak to three professors who have created a mathematical model to examine why cows synchronize their behavior and — crucially — why they stop....MORE
Probably related:

First Mathematical Model of Cow Behaviour 
Mathematical Model Explains Why All Hipsters Look the Same
Hedge Funds All Seem to be In the Same Crowded Trades

"The Fuzzy Logic of Fleeing for Your Life"

...One of the more interesting examples of people actually doing the right thing was the crash of Air France Flight 358 in Toronto. Attempting to land in really lousy weather the plane went too far down the runway and into a ravine. There were 309 people on board....

...The flight attendants got everybody, all 309, off the plane in 125 seconds.

Think about that the next time you board and look around at your fellow passengers.
Could they do it?

The picture above was taken two minutes later.

Probably not related:

What's Moooving: Cows as Safe Assets
As Carnegie Mellon Financial Engineering prof. Dogbert explains, we are dealing with aggregates here:
 - Dilbert by Scott Adams
This, however, leads to a whole new set of problems that come from physically* bundling the cows into the Collateralized Cow Obligation wrapper.
They ask questions like "Does this CCO make my butt look big" and seriously, how can you answer that without incriminating yourself?
For this reason some practitioners prefer to stick with synthetic livestock, not to be confused with....ummm..., where was I?...
"Robots Will Almost Certainly Not Train Cows To Kill Us All As Part Of Their Plan For Worldwide Domination" 

'The one who makes cows cry': Prince Charles gets Maasai title as he visits Tanzanian tribe with Camilla 

Voting With Their Hooves: "Dairy Cows Flee California Seeking a Better Economic Climate for Themselves and their Calves"
As we bid adieu to these intrepid bovines other climes extoll the virtues to be found in their jurisdictions:
...Two South Dakota dairy processors put up billboards in Tulare County, Calif., which has about 340,000 dairy cows, saying "All our cows in South Dakota are happy."..,