Re: PPL Pharmaceutics, Geron, ...

James Rogers (jamesr@best.com)
Mon, 18 Aug 1997 00:29:43 -0700


At 02:26 AM 8/17/97 +0000, Nicholas Bostrom wrote:
>
>you posted recently to the extropian mailinglist that after the
>breakthough, the Geron stocks went up 200% and then back to a level
>of 120%. How long did it take after the publication untill they
>started to rise significantly?
>
>A similar pattern occured with
>PPL Therapeutics and there were several days delay between the
>announcement of Dolly and the rise of the stock.
>
>If this sort of delay is a regular feature of technologcal
>breakthroughs, we could exploit it to make money.

In some tech fields this is a regular phenomenon. I suspect the delay is
due primarily to the fact that the analysts are not technically savvy
enough to determine whether the announcement is important or not (among the
many that are routinely made) and are forced to wait for some science types
to speak up. It is very feasible that money could be made on this
phenomenon if you tracked the science news carefully and were knowledgeable
enough to determine the market reaction. Some announcements, on the other
hand, produce a Pavlovian response in stock analysts that gives almost no
lead time. In these cases you can make money only if you are able to
predict the market position after you take cascade and feedback effects
into consideration. Actually, I find stock analysts' Pavlovian response's
to be fairly easy targets for making money, primarily because they are so
predictable.

Another related phenomena is that even when the analysts respond quickly,
related companies often experience a similar stock boost, but usually after
a short delay. This varies widely, dependant mostly on the particular
industry and company involved.

I am currently working on software algorithms (part of a larger software
package under design) to predict the delay, cascade, and feedback factors
as the result of such technology announcements. Accurate probability
assessment in such situations is a non-trivial computational problem,
although the human brain can often "intuit" the situation with training or
experience.

-James Rogers
jamesr@best.com