Tuesday, November 07, 2017

The past is not dead; it is not even past.

[ The title of this post is actually Q1 of this year's AO level General Paper. It has been long time since I have written a GP essay so it's high time that do one given that I am also preparing for the Bar Exams.  ]

The past is not dead; it is not even past.

The past is persistent.

It shall forevermore, be embedded in the present.

It will always influence the future.

This is not merely  a metaphysical assertion for if you, dear marker, have a case of herpes. You should know this fact very well.

The past can be like a herpes infection from your last unprotected sexual encounter - it just keeps coming back. In fact, for herpes, the past is not even past, because herpes is like a trust fund that keeps giving, vital parts of your body that had stopped itching would periodically itch again in the future. Herpes will never die, it is not even past.

Also, no debate on the idea of the persistence of the past should be without the discussion of economic ideas which, also like venereal diseases, are spread between people who don't really know any better. As in turns out, the idea that the past is dead is subject to decades of debate by economists.

Proponents of the Efficient Markets Hypothesis argue that the past is irrelevant. The act of looking at technical charts ,which encapsulate historical price movements, do not lead to extraordinary profits. Entire erections of a theoretical nature were dedicated to the Efficients Markets Hypothesis in academic institutions. It is almost as if the older economists were on a permanent course of Viagra. Phds in economics must have felt their egos masturbated with with each additional citation they receive from another freshly published research paper. In fact, if you found a market anomaly and argued that historical prices can be used to achieve extra profits, you would in for a smear campaign. You would given more tongue lashings than a gimp in BDSM sex orgy if you revivify the past in a thesis defence.

But the past does make fools out of even our greatest economic minds.

People eventually discovered many market anomalies that do exploit past data and they were able to establish very successful hedge funds by exploiting these anomalies. One example is that momentum trades do result in extraordinary profit. A stock that has increased in value for the past 12 months has a propensity to keep on increasing in the markets. This results in a profitable strategy of going long on a basket of stocks which has done well in the past 12 months and going short on a basket of stocks which had done badly. This anomaly is likely to have arose due to the nature by which market agents react to the news. A first, a lot of people under-react to fresh news, but subsequently they overreact to it.

Whether it concerns money or venereal diseases, objects in the rear view mirror may always appear closer to where they are. The past is not dead; it is not even past. Those who do not remember the lessons of history, are doomed to repeat.

Those who remember the lessons of history, will have plenty of great stories to tell in the VD clinic.








2 comments:

Christopher Ng Wai Chung said...

I just passed my word count of 507 words !

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