Mmmm Donuts

What causes the daily fluctuations in stock markets can seem confusing.  There’s a reason for that.  They are confusing.  From moment to moment, prices can change on a dime without any apparent cause.  It reminds me of a concept in quantum mechanics called Wave Function Collapse.

At a recent conference one morning, before the first event began, I was confronted with a large box of mixed donuts.  Which one should I choose?  I liked several, but when I actually picked on up, it wasn’t the one I thought I was grabbing.  That’s Wave Function Collapse.  Any choice would have been possible, so all choices were simultaneously valid until I picked out one.

In the stock market, billions of transactions are made every day, each a result of various calculations and considerations by both buyers and sellers.  Each action may have apparent validity, but the true value can only be known at the end of the day.  The final print is essentially the economic equivalent of Wave Function Collapse.  So, is any of this making sense?  The short answer, probably not, but that doesn’t change its importance.   

Nobel Laureate Richard Feynman once said, “I think I can safely say that nobody really understands quantum mechanics.” That has not stopped physicists from successfully applying its theories for over 100 years.  The trick is to create a discipline and use it until it either fails or a better one is uncovered.  The methodology we apply here at Atlas is, in many ways, much the same.  In confusing times when so many exogenous variables can make the way forward seem nebulous our discipline has consistently helped us chart the course forward. (by Christopher Cox and J R Capps)