Zbigniew Piekarski explains how the Otis Syndrome lifted the WSE.
Is it a bird? Is it a plane? Is it Superman? No - it's the WSE!
Were you there? Did you see it? I am referring to March 10. On that glorious day the WIG rose 2.7%, the TechWIG 3.1% and the WIG 20 an unbelievable 3.5%.
The Jabberwockies were ecstatic. But now they had a slight problem in explaining the reasons why the market rose. They couldn't say "due to the geopolitical situation;" for this is used to explain why the market is going down. They couldn't say that the fundamentals had radically altered for the better, as they are getting worse and the International Monetary Fund has revised growth rates downwards yet again. Oh yes, it was due to the results of the refe-rendum in the homeland of the Knights of the Order of St. John who raped, pillaged and plundered the Muslim world (and other Christians) during the last religious conflict that involved the whole of Christendom. How poetic to refer to the Crusades at this particular time.
But was this the real force behind the recent stratospheric rise in the WSE? I think not. As you must know by now, I am a firm believer that the stock market is an expression of "social mood" and that each culture has its own particular idiosyncrasies. In this instance, the rise was totally explicable by the Otis Syndrome.
In 1853, Elisha Graves Otis introduced the world's first safety lift in Yonkers, New York, changing the shape of the modern world. From that point forward, buildings could rise beyond the limitations of stairs. The introduction of the lift did have repercussions on human behaviour, which were noticed by Jeremy O'Keefe who travelled the US and then the world, supervising the installation of the new lifts. An engineer by profession, O'Keefe developed a method of classification and evaluation by which he could assess the social mood. He refined the process to such a degree that he found a correlation between the way that people behaved when using a lift and the subsequent stock market performance.
His predictive abilities soon became known to the select few who made fortunes during the 1929-1935 depression. As the whole system is still proprietary, I am only able to give you indications of what it consists of and summarise my conclusions. How individuals enter the lift, the most often repeated phrase when they travel on one and their manner upon leaving the lift are the key factors.
Since I reside in one of the original towers by the Palace of Culture, I have been collecting data on lift behaviour for more than two years and am able to explain and predict the WSE's daily movements based on O'Keefe's theory. In my block the most common tendency is to assume that the lift is one's own personal property. Individuals pile in regardless of whether others wish to leave. This happens most often on the ground floor.
Once the door opens, people enter regardless of whether the lift is moving in the direction in which they wish to travel. It's only when the lift starts to move that they ask a question as to its direction. When the lift stops, most people assume that it has reached the destination that they want and they exit, sometimes asking about which floor it has stopped on.
It took me quite a few months to explain this behaviour, as it was not accommodated by O'Keefe's schematic grid. Then I realised what the problem was - that of perception. Here individuals are only aware of four directions and have not yet been conditioned to recognise up and down arrows. Front and rear directions are the most common, as each person knows his place in a queue. Left and right arrows are also recognised as most individuals living in this vicinity have visited the main post office. However, up and down arrows are relatively new, as are the manners associated with allowing individuals to leave before another one piles in.
When the Canadian embassy moved to the former Reform Plaza, a whole family became lost in the underground car park. How do I know? I was in the lift that took them there. As I descended and the doors opened on the ground floor, the family barged in and the youngest child immediately pressed the only button that he could reach. The lift went down to the car park. When the door opened, all four exited. As the door was clo-sing, I heard the wife ask, "Are you sure this is the place?"
So why did the market rise on March 10? Was it on account of Malta? Was it because it was the third anniversary of the doomed Nasdaq market's all-time high? Was it because Deutsche Telecom beat Aviva and France Telecom in declaring losses that set a European record?
I think not. The reason that the WSE rose was that as the boys and girls stampeded into the lift, one of the new recruits pressed the wrong button. Before you dismiss my explanation, I would suggest that it is just as highly correlated with the truth as is Malta. The correlation coefficient of each is about
-0.05%. The real reason was that the market was commemorating the anniversary of a famoust Pole on the rise in the US in 1977, in honour of Samantha Jane. Correlation coefficient 0.99.
On the WSE: I am preparing for a tradable low around the Vernal Equinox on March 21, give or take a few days. Then the markets should rise by roughly 20% into mid-May before resuming their secular bear market trend to reach fresh lows this year.
Zbigniew Piekarski is a portfolio analyst based in Warsaw. He can be reached at zbigp@bipnet.pl.
Were you there? Did you see it? I am referring to March 10. On that glorious day the WIG rose 2.7%, the TechWIG 3.1% and the WIG 20 an unbelievable 3.5%.
The Jabberwockies were ecstatic. But now they had a slight problem in explaining the reasons why the market rose. They couldn't say "due to the geopolitical situation;" for this is used to explain why the market is going down. They couldn't say that the fundamentals had radically altered for the better, as they are getting worse and the International Monetary Fund has revised growth rates downwards yet again. Oh yes, it was due to the results of the refe-rendum in the homeland of the Knights of the Order of St. John who raped, pillaged and plundered the Muslim world (and other Christians) during the last religious conflict that involved the whole of Christendom. How poetic to refer to the Crusades at this particular time.
But was this the real force behind the recent stratospheric rise in the WSE? I think not. As you must know by now, I am a firm believer that the stock market is an expression of "social mood" and that each culture has its own particular idiosyncrasies. In this instance, the rise was totally explicable by the Otis Syndrome.
In 1853, Elisha Graves Otis introduced the world's first safety lift in Yonkers, New York, changing the shape of the modern world. From that point forward, buildings could rise beyond the limitations of stairs. The introduction of the lift did have repercussions on human behaviour, which were noticed by Jeremy O'Keefe who travelled the US and then the world, supervising the installation of the new lifts. An engineer by profession, O'Keefe developed a method of classification and evaluation by which he could assess the social mood. He refined the process to such a degree that he found a correlation between the way that people behaved when using a lift and the subsequent stock market performance.
His predictive abilities soon became known to the select few who made fortunes during the 1929-1935 depression. As the whole system is still proprietary, I am only able to give you indications of what it consists of and summarise my conclusions. How individuals enter the lift, the most often repeated phrase when they travel on one and their manner upon leaving the lift are the key factors.
Since I reside in one of the original towers by the Palace of Culture, I have been collecting data on lift behaviour for more than two years and am able to explain and predict the WSE's daily movements based on O'Keefe's theory. In my block the most common tendency is to assume that the lift is one's own personal property. Individuals pile in regardless of whether others wish to leave. This happens most often on the ground floor.
Once the door opens, people enter regardless of whether the lift is moving in the direction in which they wish to travel. It's only when the lift starts to move that they ask a question as to its direction. When the lift stops, most people assume that it has reached the destination that they want and they exit, sometimes asking about which floor it has stopped on.
It took me quite a few months to explain this behaviour, as it was not accommodated by O'Keefe's schematic grid. Then I realised what the problem was - that of perception. Here individuals are only aware of four directions and have not yet been conditioned to recognise up and down arrows. Front and rear directions are the most common, as each person knows his place in a queue. Left and right arrows are also recognised as most individuals living in this vicinity have visited the main post office. However, up and down arrows are relatively new, as are the manners associated with allowing individuals to leave before another one piles in.
When the Canadian embassy moved to the former Reform Plaza, a whole family became lost in the underground car park. How do I know? I was in the lift that took them there. As I descended and the doors opened on the ground floor, the family barged in and the youngest child immediately pressed the only button that he could reach. The lift went down to the car park. When the door opened, all four exited. As the door was clo-sing, I heard the wife ask, "Are you sure this is the place?"
So why did the market rise on March 10? Was it on account of Malta? Was it because it was the third anniversary of the doomed Nasdaq market's all-time high? Was it because Deutsche Telecom beat Aviva and France Telecom in declaring losses that set a European record?
I think not. The reason that the WSE rose was that as the boys and girls stampeded into the lift, one of the new recruits pressed the wrong button. Before you dismiss my explanation, I would suggest that it is just as highly correlated with the truth as is Malta. The correlation coefficient of each is about
-0.05%. The real reason was that the market was commemorating the anniversary of a famoust Pole on the rise in the US in 1977, in honour of Samantha Jane. Correlation coefficient 0.99.
On the WSE: I am preparing for a tradable low around the Vernal Equinox on March 21, give or take a few days. Then the markets should rise by roughly 20% into mid-May before resuming their secular bear market trend to reach fresh lows this year.
Zbigniew Piekarski is a portfolio analyst based in Warsaw. He can be reached at zbigp@bipnet.pl.
