Analogy between mountains and the Market
The market, the underlying security process, is just like the mountains on the land, the trees and grass, the greens and yellows, are like the noises, with the true surface of mountains hidden under. We want to extract the true price, true layer, to study the mountains themselves.
The winds, blowing from the west to the east, the north to the south, touches the noises of the mountains, shapes the mountains, and causes the different directions of the mountains like windward and leeward sides. With stronger or weaker winds, the market process contain drifts, thus a discounted process is needed to properly evaluate the market without the outside impacts, (the winds and the trees).
As such, the stock market may show the similar traits as the growth and decay of the mountains, the peaks, the valleys, the hillsides… and we may obtain the rich, valuable resources contained underneath.
On train, from Wuhan to Nantong, China
July 11, 2023