T Nation

Gold Is a Parabola


#1


Its graph is anyway. :slightly_smiling: Of course, we'd all like to have bought at the vertex of this parabola (like I luckily did); but the question becomes: should we fight the parabola? Should our government try to thwart the parabola? History will be the judge, I guess.


#2

Long on gold through financial recoveries then dump during boom times.

edit: i don't think it's a parabola. its concavity changes depending on people's confidence in paper money.


#3

I did a vertical line test...It passed. It certainly is a parabola.


#4

That just means it's a function, no? A linear equation can pass a vertical line test.


#5

Yeah, points of inflection! But I'm sure it's meant to be viewed the long term and not short term. A long term "best fit"?


#6

Its when the 2nd derivative goes positive that I like it most! :wink:


#7

lolololol basic math fail


#8

Gold is a commodity, and like most commodities, should fall in the coming deflationary environment.


#9

Concave up! Calc III coming up this fall. This just reminds me I should be doing some summer reviewing.


#10

calc III was probably the hardest math class that I've taken. Linear and Diff eq's are relatively easy in comparison. definitely take those next spring and you will find them very easy.


#11

In practice, parabolas always fail and crash, since in reality there never is sufficient energy to propel them upwards forever. (eg the housing market.) On the other hand, this actually looks like a linear advance, starting at the "vertex".


#12

Surely when dealing with a stochastic process like this you have to use the Ito-Doeblin lemma? The usual way of calculating a derivative doesn't work.


#13

All I remember of Complex Analysis was that it = donkey balls. Made Real Analysis (Calc IV) seem like a Sunday stroll.


#14

Nonsense. Surely you could use a Quadratic Regression.


#15

What you're saying is that you approximate an arbitrary subset of the graph with a parabola, then infer properties of the original graph from this approximation? How is that useful?

And no, it's not nonsense, I suggest you go and read about mathematical finance if you need to convince yourself why it isn't.


#16

This 10 years of data is not arbitrary, its the past 10 years.


#17

if you're dealing with gold futures/options (derivatives), you're right.


#18

Are you looking at the same picture I am? It's concavity hasn't changed in any way, long term according to that graph.

And I agree it's not a parabola.


#19

I'm not saying that its concavity has changed ON THAT INTERVAL, but that it WILL change based on my belief that the price of gold is related to booms busts and recoveries. The graph will continue as x tends to infinity and if we were to zoom WAAAYY out it would look more like a periodic function.


#20

a periodic function?

That is a bold statement and I am sure the Noble panel would love to read your dissertation.