Stocks & Commodities V. 25:1 (10-15): Letters To S&C by Technical Analysis, Inc.
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THE SCIENTIFIC WORK OF LUNA B. LEOPOLD
Curious readers may be interested in the article “Up A Lazy River” by Brian Hayes in the November/December 2006 issue of American Scientist magazine. A brief, but more accessible, article can be found at http://bit-player.org/2006/ old-man-river. Both are a tribute to the work of Luna B. Leopold, who died earlier this year. In a 1966 article, Mr. Leopold gave a lucid account of how river meanders form and why they assume their sinuous shapes.
Mr. Leopold never knew I existed, but he had a huge impact on my view of the market. His accounts are consistent with the solution of the Drunkard’s Walk problem and, taken together, made it clear to me how the market could be both random and short-term coherent. I could never carry the solution beyond the philosophical level because both the Telegrapher’s Equation and the river meanders are boundary-value problems. It is probably impossible to demonstrate
boundary values in market data (but it is impossible to prove impossibility).
In any event, it was Mr. Leopold’s description of river meanders that sent me on my decades-long quest to extract short-term coherent signals from price information. So I would like to add my tribute to
Luna Leopold. We never know how our work may influence others.