Peter Blakey

The efficient market approximation

The EMH is the focus of this paper. The academic point of view is encapsulated in the efficient market hypothesis (EMH). Consideration of the first issue leads to three distinct forms of the EMH. These are referred to as the weak, semistrong and strong forms. This paper looks at some of the causes and consequences of random price behavior.

Modern portfolio theory.I

This column returns to the topic of investment engineering. Previous columns on this topic have established the following foundation: a) a block diagram view of investment engineering; b) the lognormal model of price behavior; c) the efficient market approximation; d) the nonideal behavior of real markets. The remainder of the series will present two different approaches to market analysis. One starts from the efficient market approximation and the lognormal price model. It then derives results of practical importance, including modern portfolio theory (MPT) and options pricing theory (OPT). The other starts with the assumption that market sentiment should not be neglected and proceeds to develop the tools of technical analysis (TA). This column provides an introduction to MPT

π/2-mode operation of class E power amplifiers

A new derivation of the theory of idealized operation of class E power amplifiers is presented. The new derivation makes it simple to determine the current and voltage waveforms and circuit parameters associated with any value of conduction angle. A set of universal design data is presented. Conventional class E operation with a conduction angle of π radians will often be optimum, but operation with a conduction angle of π/2 can provide advantages when the switch is a bipolar transistor.

Exchange Traded Funds [Wireless Investor]

The use of index mutual funds is not the only way to implement the strategy. Alternative investment vehicles called exchange traded funds (ETFs) have emerged in the past few years and have become very popular. This column looks at how mutual funds and ETFs have evolved and why there is so much interest in ETFs

Modern Portfolio Theory. II

The previous column presented the basic ideas of modern portfolio theory (MPT). This column covers additional aspects of the theory and presents a result known as the capital asset pricing model (CAPM). The underlying theory is not always easy to grasp on a first encounter but is presented here because it plays a central role in investment theory and practice

The log normal model of asset prices

This paper returns to the theme of investment engineering, i.e., the application of system models and mathematical analysis to the task of accumulating financial wealth. A system-level block diagram of a financial asset management account (FAMA) was presented.

Wireless investor - triple-screen investing

Markets often focus on the short- and medium-term view. While it is too early to be wildly bullish, it may be time to start picking cautiously through the post-crash rubble. This column describes investment strategies that may be appropriate for this phase of the market. This column presents a triple-screen system for investing in a diversified portfolio of stocks.

Our demographic destiny

Within the vast oceans of forecasting hopelessness, techniques based on demographics provide isolated islands of success. This is because the input data is known accurately and the processing of the data is kept fairly simple. The major components of demographic data are the rates of births and deaths, with corrections for immigration and emigration. Historical values of these variables are known accurately and the underlying trends normally change rather smoothly. Once established, the age profiles of populations translate predictably along the time axis. The key to demographics-based forecasting is that financial behaviors are predictable as a function of age. As each generation matures it goes through successive stages of being educated, entering the workforce, forming new households, raising families, putting children through college, saving for retirement, retiring, and dying. Weighting these tendencies by the number of individuals within each age bracket leads to broad but fairly reliable predictions of societal, economic, and financial trends.

The credit crunch: Part II [Wireless Investor]

Innovation of any sort brings a combination of benefits and dangers. The goal of individuals, organizations, and society as a whole is to reap the benefits and control the dangers. With respect to technical innovation (i.e., advances in science and engineering) the situation is fairly clear. There is a possibility of nuclear, biological, or environmental disasters. These dangers are regulated by nation states using mechanisms that are fairly effective. Financial innovations also bring benefits and dangers. The potential for financial disasters exists, and the dangers need to be regulated. Unfortunately, some of the dangers are not well understood. Other dangers are regulated either ineffectively or not at all. The possibility for serious and widespread economic crises exists. A severe credit crunch is currently underway and has the potential to become a full-blown crisis. If a financial disaster occurs its epicenter will probably be in the United States but its impact will be felt everywhere. This column presents the first of two articles on this situation.

Career Dynamics [Wireless Investor]

A goal of this column is to help readers to achieve a level of wealth that will fund a comfortable retirement. The core strategies are as follows: save regularly, via automatic payroll deduction, in plans that defer or avoid taxes; save at least 10% (and preferably more) of your gross income; accept market returns; minimize investment expenses.