re: bowls, marbles, wolves, and caribou:
If I understand your analogy, "static stability" could only happen if there are no forces acting on the marble. It is at rest, but only because nothing is pushing on it. In reality, stock price movements are a complex system, with innumerable variables acting on it constantly. Static stability is an entirely theoretical concept, when applied to stocks. Never happens.
I like biological analogies. I think of the semis and semi-equips going up and down, the way populations of caribou and wolves go up and down:
When there are lots of caribou, the wolves have lots of cubs. The wolf mom never says, "I'll have just enough cubs, and coordinate this with the other wolf moms, so our pack doesn't eat too many caribou." That would be rational. That would be the best longterm planning. But they never do it that way. Instead, they just keep having as many baby wolf cubs as possible, and the pack gets bigger and bigger, and every year they eat more and more caribou. Then, one year, the caribou herd crashes. The wolves have eaten too many of the breeding stock. Or there is an "exogenous shock", like a hard winter that buries the fodder under snow too deep for the caribou to get to. So the wolves then starve. The small, young, and sickly (both wolves and caribou) die. When the wolf and caribou populations have hit a nadir, then the cycle begins again (first the caribou numbers recover, then the wolves). The earliest predictor of a coming crash in the wolf population is a decline in caribou fertility, or declining quality of caribou fodder. This usually happens just as the total size of the caribou herd is peaking.
This is a negative reinforcement loop, with a time delay. The populations graph out as sine waves (#s vs. time), with the wolf and caribou cycles of the same frequency. The wolf population sine wave has a larger amplitude, and is offset (peaks and troughs later).
INTC = caribou leader
AMAT =alpha male of the wolf pack
caribou fodder= chip sales
caribou fertility= margins at semi companies
hard winter= liquidity crisis |
