Lobo's Investment

Once upon a time I read about the dynamics of speculative peaks. From the eye of a Physicist that's merely a damped oscillator equation. The econophysics then go on with the Green's function and generalize the problem into higher orders. (Patterns of Speculation - A Study in Observational Econophysics p.177-197) That's no big deal. But what really useful is the synchronization effects around the price peak. The correlation between the prices of different items is a variable of great importance. Under this model, the price peaks tend to synchronize price fluctuations. When two prices that move almost independently for years and suddenly become highly correlated ... both items experience a peak. Theoritically, the synchronization subsists over one quasi-period. In this case, the variables synchronized from Oct 07 until Mar 08. If the rebound period is 1/3 of the down time, the timming says that we are close to a rebound peak.