Financial theory of everything using E8 to understand finance

comments welcome, original article


The Real Question to Life Universe and Everything -
first Practical Application of E8
(Risk/Reward - Symmetry in Financial Markets)
Author and his partner have collaborated on this research for 10
years, Author is a BS, MBA global transformation expert in Corporate
America.
Partner is Bsc, MBA Global Wealth Specialist on Wall Street
this is both an expose and an analysis.
Perfect Portfolio, Solution to Riemann Hypothesis, Grand Unification
Theory
Contents

lessmore
Disclaimer - I am aware of the likelihood of ridicule, shock and
persecution but I do this anyway for the truth will set us free and be
of help to all mankind and nature

TWO LINE SUMMARY
GRAND UNIFICATION THEORY WORKS BUT THE FINEST MATHEMATICIANS AND
PHYSICISTS HAVE BEEN LOOKING IN WRONG PLACE, ITS THE THEORY OF BALANCE
BETWEEN INDIVIDUAL AND INSTITUTIONS
WEAK FORCES AND STRONG FORCES, IN OTHER WORDS E8 IS ABOUT HUMANS
Corporate Strategy Maps are identical to E8 subgroups.

This is an attempt to balance expose of Institutions/people betraying
trust and an analysis of what is the practical implication of E8.
In other words this article is a challenge since it straddles the
ordinary investor and worlds finest mathematicians, physicists, I have
provided the guidance to help them prove the Riemann hypothesis by
simply using capital markets as their domain set, gaming as a lens and
using principles of E8 its fairly simple once you see it :)

Symmetry generally conveys two primary meanings. The first is an
imprecise sense of harmonious or aesthetically-pleasing
proportionality and balance; such that it reflects beauty or
perfection. The second meaning is a precise and well-defined concept
of balance or "patterned self-similarity" that can be demonstrated or
proved according to the rules of a formal system: by geometry, through
physics or otherwise
This article will show symmetry in Financial Markets and its
underlying meaning

Background:- the Answer to Life, the Universe, and Everything is
numeric in Douglas Adams' series The Hitchhiker's Guide to the Galaxy.
In the story, a "simple answer" to The Ultimate Question is requested
from the computer Deep Thought, specially built for this purpose. It
takes Deep Thought 7½ million years to compute and check the answer,
which turns out to be 42. Unfortunately, The Ultimate Question itself
is unknown, suggesting on a metaphoric level that it is more important
to ask the right questions than to seek definite answers.

When asked to produce The Ultimate Question, the computer says that it
can't, but it can help design an even more powerful computer (the
Earth) that can.

---the answer to Life, the Universe, and Everything as it turns out is
called E8

At the most basic level, the E8 calculation is an investigation of
symmetry. Mathematicians invented the Lie groups to capture the
essence of symmetry: underlying any symmetrical object, such as a
sphere, is a Lie group.

Lie groups come in families. The classical groups A1, A2, A3, ... B1,
B2, B3, ... C1, C2, C3, ... and D1, D2, D3, ... rise like gentle
rolling hills towards the horizon. Jutting out of this mathematical
landscape are the jagged peaks of the exceptional groups G2, F4, E6,
E7 and, towering above them all, E8. E8 is an extraordinarily
complicated group: it is the symmetries of a particular 57-dimensional
object, and E8 itself is 248-dimensional!
The new result is a complete list of these building blocks for the
representations of E8, and a precise description of the relations
between them, all encoded in a matrix with 205,263,363,600 entries.

Main Article -
So what is the Question ..........................
The Real Question is - what is the game we all are playing and what is
the optimal strategy
my friends, game we all are playing is called Risk-Reward and optimal
strategy is E8 - perfect balance at all points in time.

What Einstein, Lisi and world missed
Do not sweat the calculations of E8 in space time and in perfect
balance between geometry and algebra
E8 can be seen so much more easily in capital markets since its a code
of all human behavior/transactions
we were just looking in the wrong place.

In other words its about mankind and God (friendly artificial
intelligence) has set up this game

Meat of Article
Three things Wall Street does not want you to know a) no one can beat
the market b) perfect portfolio is a perfectly balanced 50% Global
stock like and 50% Global Bond like set-up in weighted market cap of
all global participating entities - this gives you the best risk
adjusted return - this can be simply implemented with Stock/Bond and
Alternate ETF's with very little fees !!! does not require
transactions and nor the charges of the bloated wall street c) they
make superior returns by taking higher risks or by fooling people.

The Catch - the perfect portfolio unfortunately gives you very low
returns, in the quest for higher returns you can do only two things a)
take more risks which makes sense in only one case explained at end of
the article or b) fool people who do not understand risk-return

True risk-return equation is very simple to the ones who do understand
it -
Market risk
Catastrophe risk
Windfall risk

Any contract between any parties which does not take cognizance of
these three together over all points in time is doomed to begin with
in ignorance or set up to perpetrate fraud on you.

You need to use insurances to protect against catastrophe risks and
lotteries of various sorts including pvt equity for windfall , it must
also be perfectly balanced for e.g if they share your windfall, they
must share catastrophe.

In the simple example of an American home loan
PMI - Insurance must not only be on the 20% less your down payment,
the insurance must thus be across all the capital you have borrowed,
since only the government participates in your windfall only the
government can provide that insurance, as your equity rises the
insurance drops.

The rate must be individual and customized for your at present risk/
perceptions across these risks so you would be in effect be a traded
company on an exchange and all your financial actions available to the
exchange...

Another Simple Example
How much should anyone save ?
Answer the perfect balance is to save 50% of your net paycheck -
anything less you are bullish about the future anything more you are
bearish about the future - in other words you are trying to beat the
market which we know doesn't work, as you may know we save nothing ...
China saves nearly 50%
That is applicable to Individuals, Families, Companies and the
Govt ...

Another Simple Example
How do you really plan for Retirement ?
Construct the perfect portfolio obviously but balance that with
observing the three risks and in all points in time. As a nation we
are HUGELY ignoring catastrophe risks and overempahsizing market risk.

This will roughly break into market risk-94% of global "stock like"
and global "bond like" (50-50)) and 1.5% catastrophe and 4.5% of
windfall, returns will be directly proportional to world improvements
in GDP/marketcap so your selfish/individual needs are balanced
perfectly with your interest well being of all mankind.


What the institutions are doing is to push risks to unaware
individuals and returns to themselves.

Yet Another Simple Example

Consider a contract where I have given you capital, but kept out of
catastrophe risk and kept windfall chances to myself , in normal
market conditions you will not know the difference but in windfall I
will make money and in catastrophe you will lose money.

Beware the Systemic Risk - Risks that lies outside your portfolio,
more about that later.

Beware the easy catch phrases...

'The rich are getting richer'

Yes they are - they are exactly aware of risks/rewards

Pareto i.e Nature arranges it 90,9,1
I had promised to address when you may take undue risk
You may take undue risk at individual/income level to be the best you
can, make the most money you can subject but balance it perfectly with
the perfect portfolio on the wealth you accumulate.

More in my next article/book.....

References/Suggested Reading

http://en.wikipedia.org/wiki/Answer_to_Life,_the_Universe,_and_Everything

http://www.regjeringen.no/en/dep/fin/Documents-and-publications/Propositions-and-reports/Reports-to-the-Storting/2007-2008/report-no-16-2007-2008-to-the-storting/2.html?id=508534

http://seedmagazine.com/news/2006/03/prime_numbers_get_hitched.php

http://en.wikipedia.org/wiki/Prime_number

http://www.stats.bris.ac.uk/research/highlights/random-m/

http://en.wikipedia.org/wiki/Grand_unification_theory

http://en.wikipedia.org/wiki/Evolutionarily_stable_strategy

http://en.wikipedia.org/wiki/Symmetry

http://en.wikipedia.org/wiki/Image:Strategy_map.JPG

http://web.mit.edu/newsoffice/2007/e8.html

http://www.aimath.org/E8/

http://www.aimath.org/E8/liegroup.html

http://www.longbets.org/362


http://knol.google.com/k/ritesh-pathak/the-real-question-to-life-universe-and/29p0kvbtnbikl/3#


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