Finance Dance - The Orchestral Ensemble!
Your host is Syed R Sayeed
It is not considered noble in purely medieval terms to talk about myself, as the Webmaster. However, a brief acquaintance is never harmful before you embark upon a journey which will teach you a dance form - finance dance.
Why dance? Who is a function of what, and the paradox of asking why to a term which has no definition in by-parts is quite ridiculous. So first let us know what is dance and what is finance, and then we can relate as to what is finance-dance and then the form "why" would be appropriate. However, at this moment I should assure you that even if you are not used to language which takes into account, a great deal of care and precaution to ensure that errors and fallacies do not creep into it, kindly bear with this and read on and explore the site. I am sure once you carry forward into this world, my objectives shall be met, even if partially, at best. (Read more about why we need our languages to be complicated! and no, I do not wish my site to be considerd an attempt of displaying practical cryptorthography!)
What is Dance? A movement...a harmonious movement...something accompanying music...etc. But above all, my objective is to emphasize that it is an Art. Dance is also used to describe methods of non-verbal communication (body language?) between humans or animals (bee dance, patterns of behaviour such as a mating dance), motion in inanimate objects (the leaves danced in the wind), etc. Even martial arts have evolved into dance forms like the BRazilian Samba, etc. Above all, I can define it in my own words as an Art of audio-visual communication with pre-ordained rhythmic movements, a musical effect, a harmony that pleases the mind... let's leave it at that.
Finance studies and addresses the ways in which individuals, businesses, and organizations raise, allocate, and use monetary resources over time, taking into account the "risks" entailed in their projects. Finance is used by individuals (personal finance), by governments (public finance), by businesses (corporate finance), as well as by a wide variety of organizations including schools and non-profit organizations. In general, the goals of each of the above activities are achieved through the use of appropriate financial instruments, with consideration to their institutional setting. Finance is one of the most important aspects of business management. Without proper financial planning a new enterprise is unlikely to be successful. Managing money (a liquid asset) is essential to ensure a secure future, both for the individual and an organization. If we take a look around all the happiness in the world can be experienced only after the culmination of basic needs as Maslow (Eupsychian assumptions) had predicted. And the basic of needs requires proper wealth management, something that can be only achieved through proper Finance.
So where do they meet? Finance Dance is an orchestral performance - like an Opera! Something which is incomplete without its music. And the accompaniments are:
- Woodwinds: Economics (Macro and Micro)
- Brass: Psychology (Individual as well as Group dynamics, Behavioral psychology, etc.)
- Percussion: Mathematics (Technical charting, wave theory, geometry, probability, multivariate statistics, number systems, pure and applied mathematics including calculus, etc.)
- Strings: Computing - Ranging from simple spreadsheet programming like VBA for Excel to advanced Charting software like Equis Metastock and Portfolio Management software like SmartFolio, etc.; and Optimisation (from simple mathematical programming to soft computing methods like Neural Networks, Genetic Algorithms, Search Algorithms and other Heuristics and Meta-heuristics, etc.)
So, is it necessary to learn all these accompaniments to understand Finance or be good at the Finance Dance? The good thing is NO! From here, if you commence your journey, I shall introduce you to all the features of the Finance Dance, and what moves one should make in the wake of the changing sound of the orchestra, as well as how the sound changes. And like the crystal selling Alchemist, one has to make their own choices. If you feel, you want to be the dancer, I shall introduce you to that, and if you wish to learn to handle the musicals, I shall introduce you to that too.
The reason why I am writing this is quite personal. "Man's ego is the fountainhead of human progress", said a great woman who changed lots of lives with this statement. Ayn Rand's objectivism is debatable, but I believe those who stand to debate this, are fortunate enough to be exposed to such food for thought (as per Maslow, such tastes can only be developed after one has tasted the basic needs enough). So, what is my ego here? Perhaps it is more related to my own quest for perfection in this dance. Or perhaps it is an attempt to reduce the hurdles in the path of people who wish to obtain such knowledge - an attempt to collect as much knowledge as possible at one place, and to put it all in the most understandable of ways.
A brief introduction about myself would conclude this introduction. I have a younger brother who is a wonderful sports person, a mother who is a mathematical genius and a father who is unbeatable simply because he doesn't know how or when to give up, the fighter that he is. I am an electrical engineer who fell in love with this symphony of mathematics, economics and artificial intelligence, and therefore decided to pursue an MBA with dual specialization in Finance and Marketing. Presently, I am in the Final Year of my course, and thus, decided to share all that I gained during the course of study from my teachers, from books, from various experiences, etc. I wish you good luck in your journey towards learning the dance of finance, so that you may make all the right moves towards obtaining your financial security, as well as ensure that you develop a finance sense to assist you in all your decisions.
A Brief History in Time
Sometimes, it is best to use other's words to describe an idea which has been brilliantly put into words like this:
"...
The idea of applying mathematical analyses to the social world is an old one. The very first recorded use of arithmetic, in ancient Assyria, was to solve an economic problem. Assyrian merchants wanted to keep track of goods that were not immediately accessible for inspection. A clay tablet recovered from Assyrian ruins, when translated, said roughly:
I have paid your agents three minas of silver, so that they may purchase lead for your activities here. Now, if you are still my brother, send me the money owed by courier.2
This is clearly mathematics, for it illustrates the use of a medium of exchange, silver, to equate the values of other goods and services. Other tablets from the same era refer to the use of precious metals to value sheep, cattle, and land.
The next example illustrates a more sophisticated use of business mathematics. About 2,000 years later, in the eleventh century, the Spanish hero Ruy Diaz de Bivar (El Cid) needed cash to finance a campaign against the Moors. He sent Martin Antolínez, a nobleman of Burgos, to negotiate a loan from two bankers of that city. Three of the topics for negotiation were, in modern terms, the appropriate surety that El Cid had to put up to secure a loan of 600 marks, the fee that the bankers were to receive for the use of their money, and, interestingly, the finder’s fee to be paid to Antolínez. He got 5%, which in modern terms would not be a bad commission. We find the echoes of such activity in modern investment banking and arbitrage.3
The Moors against whom El Cid fought were representatives of the sophisticated Arab-Iranian-Mogul civilization that flourished from roughly the eighth until the fifteenth century. Classical Islam’s contribution to mathematics was immense. The number system we use today, Arabic numbers (which they probably borrowed from India) is well known. Arabic and Iranian scholars also developed the modern concept of algebra. These ideas could be considered contributions to pure mathematics, although clearly much of our applied mathematics would be impossible without them.
Arab scholars of this time also pioneered in introducing mathematical concepts into everyday life. They developed the concept of insurance, which extends investment to the assessment of risk. Insurance is, as we shall see, mathematically virtually identical to gambling, even though it is psychologically quite different. The latter topic caught the fancy of the Europeans. Some of the greatest mathematical minds of the Enlightenment, including Pascal and the Bernoulli brothers, were commissioned to explore strategies for winning gambling games.
In the last two centuries there has been an explosion in the use of modeling to guide our thinking about human affairs. Some of the most interesting cases occur when a mathematical model used to solve a problem in one field is adapted to solve problems in a totally different field. Diagnostic radiologists (physicians who specialize in the interpretation of physiological images, from X rays to magnetic resonance imaging) (MRI) are keenly aware that they can never be certain of a diagnosis, and so must consider both the image they see and the costs of two types of misdiagnoses: false positives (e.g., saying that an organ is cancerous when it is not) and false negatives (failing to spot a tumor). The analytic techniques used to evaluate how well a diagnostic radiologist is doing were developed during World War II as an aid in hunting submarines.
..." - From The Mathematics of Behavior by Earl Hunt (Cambridge University Press)
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The other history needed to be known is about my pen name: Syd El Cid. It is made up of two names: Syd and El Cid. Syd is taken from the name of Syd Barrett, the founder of Pink Floyd, and owes its lineage to the large collection of Syd Barrett, the laughing Madcap, that I have. El Cid was the title of Rodrigo Diaz from Medieval Spain and was attached to me, when I gained an upper hand in the game "Age of Empires II: The Conquerers Expansion", wherein I always used the Spanish civilization in Random Map multiplayer scenarios. And as is cear from the excerpt above, El Cid was quite adept to Financial victories as well!
Here is another excerpt that has an interesting reference to El Cid:
"...
..." - by Peter Brimelow, Marketwatch
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In an age when the internet is blamed for a massive decline in intellectual standards, it's refreshing to look back two and a half thousand years and see what Socrates said to Plato about reading:
"This discovery of yours will create forgetfulness in the learners' souls, because they will not use their memories; they will trust to the external written characters and not remember of themselves. The specific which you have discovered is an aid not to memory, but to reminiscence, and you give your disciples not truth, but only the semblance of truth; they will be hearers of many things and will have learned nothing; they will appear to be omniscient and will generally know nothing; they will be tiresome company, having the show of wisdom without the reality."
In other words, reading will warp your sense of reality, make you learn facts without understanding the intellectual basis from which they're derived, and should be avoided at all costs.
But if you want to live dangerously, check out the rest of this site! Bon Voyage!
Just don't forget to read the Disclaimer at the bottom of the page.
S R Sayeed
Acknowledgments et al
All those who think this site is worth something may send their comments and suggestions to sydelcid@financedance.i8.com or sydelcid@gmail.com.
I am also open to job offers in the domain of portfolio optimisation, capital markets, derivatives, technical analysis, etc. especially where I may have the chance to learn further about the application of Neural Networks and other forms of soft computing methods to finance. Plus, as one would have already observed, I have the gift of good communication skills, and can also prove to be exemplary in Investment Banking deals. I am trying my best to tame finance. Any takers?
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This site could not have been possible without the contribution of my best friend Sameera, who has supported me in all the highs and lows that I have faced in my life. No grattitude can repay all that she has done for me. I only hope to work hard and smart and make sure I reach close to her ideals of success.
Of course, I cannot forget the contribution of my friends and my teachers. I am deeply indepted to all of them. However, with respect to this particular domain, I wish to give a special thanks to Feridoon, Ashu, Sachin, Vineet, Sushant, Prateek, and Pooja, who have always encouraged me and helped me. Teachers have always been important to me in my life. I am among the fortunate ones who have always shared a good rappo with all my teachers. However, whenever I think about my passions of life, I have learnt the most from Dr. C. S. Sharma, Prof. Amit Bagga, Dr. Khalid A. Khan, Dr. Fazle Azeem and many others. (I am amazed at the large number of teachers who have taught me and influenced me - the names simply keep on coming to my mind). I wish to give a special mention to my mentor, the one teacher who has shaped my life towards a quest for learning - Dr. Ashfaque A. Khan, the hidden genius, the wizard of all trades!
People are often guilty of doing grave injustice to their families. when they are negligent to the consideration required while estimating the hands of their parents and other relatives in their success. This website is a mark of success for me as a first step towards the application of all the knowledge that I have gained in my lifetime. The biggest thanks must go to my parents who always ensured that I had all the answers in the world as well as access to all the answers in the world. My grandparents too need a special mention, as do most of my relatives, as they all have been highly contributing towards my quest for knowledge and understanding of this world.
