Failing Failsafes

Equities As Predicted on 27th July, 2025 (with added notes on 16th September, 2025)  PDF 

A Note On Gold (10th September, 2025) PDF

Last July, there was a competition to predict the future. Owing to my inherent academic incompetence, there was virtually no chance that I could gain any foothold in such an event. Nevertheless, for the sake of observing the effects of informational entropy (and the faint possibility of finding like-minded individuals) I participated.

I used my custom-built engine (designed for low/mid-cap equities) to compute future paths for a few stocks, along with several general economic parameters. Using such an engine to predict macroeconomic metrics is, admittedly, absurd. But how else does one play a game one is certain to lose, regardless of the move? And this inference is not without basis: From the outset, it was quite clear that a very specific confirmation of certain theories was being sought; theories I neither possess nor have any confidence in. By the way, one of the “superpowers” I’ve developed (as a consequence of being a perpetually unemployed individual) is the ability to somewhat guess the mindset and culture of a company from its job descriptions. Indeed, having read so many of them, I can, with surprising confidence (though often incorrectly), infer the dominant philosophy guiding its current environment.

Please do not assume that my participation was lackadaisical in spirit. On the contrary, I left no stone unturned, as was evident in my later communications with the representatives of the event. Even though I was quite ill at the time, I gave it my all. Each prediction cost me dearly (at least 100 ml of blood) since I had to compute everything manually, without the aid of (active programmable) computing devices.

It is not that this could not have been programmed, nor that I'm that much alien to programming. I could have automated it. But then the program would have existed in the open, and given the unfamiliar scripts I occasionally notice running on my Linux system, I was never comfortable taking that route.

Moving on - as can readily be seen - even though I may be an academic tragedy through and through, my model certainly is not. When it comes to low/mid-cap equities, it is remarkably precise. In fact, I was so confident in its projection for PBYI that I found it difficult to imagine a group encountering it and choosing not to invest at least something. I do not know the individuals involved, but the prediction was simply too potent to ignore.

This perhaps explains why I remained silent even after being promptly rejected (as expected) from the competition. The stock (PBYI) did not cross the $10.0 threshold and therefore broke the invariant; as of now, I hold no responsibility in that regard. Nevertheless, it still delivered (almost) a cent percent return.

A few notes about the predictions: These were designed as a communication medium rather than the objective itself. Since the medium to which such communication was sent was unknown, I could only assume the common parameters governing its fidelity to informational entropy. Nevertheless, the effects were quite the opposite of what my heart wished, yet entirely congruent with what my mind anticipated.

For this specific reason, and as a failsafe, there is an awkward silence around certain stocks when reading these predictions. From my side, I can only say that my engine produced a more depressing outlook than my academic results - about which, of course, I did not go into detail. I concluded the assessment of such equities in a single sentence. This was particularly true for FISV (which was trading as FI at the time) and CI. Now FI has refurbished itself as FISV, and CI is still hovering around its past price.

Yet not everything about these predictions was hunky-dory; I was incorrect about DNLI, PDS, and SMCI. Should I have gone deeper on these? I'm still not certain, as there was no substantial motivation to do so. I simply cannot change an opinion that is inherently there and which claims superiority on the basis of academic results - and, sadly, I do not want to.

That said, I still feel SMCI has missed the opportunity of its corporate lifetime. Or perhaps this is merely a form of self-protection against corporate raiders (though it reminds me the completely unrelated(?) behaviour of NVO). Who knows? As for DNLI and PDS, I knew even at a surface level that, even if they gained traction, their acceleration would likely be far slower than that of PBYI. It therefore made little sense to analyze them to the core and burn further energy, only to send the conclusions into the void.

For the rest, explanations were provided in the additional note dated 16th September.

A curious thing worth mentioning, occurred with the fund associated with this competition. In their third or fourth quarter 13B filing, I noticed that they had completely exited BABA. Please note that I'm not implying any cause and effect whatsoever. I'm also blissfully unaware of the reasons behind it; however, the incident itself is quite telling as to how unmatched and out of line I was with respect to this.

Moving on, the primary discovery from this pointless exercise was the strength of gold’s momentum. Seven months ago, it was at 3,000. It has now crossed 5,000. I will not elaborate further, but it is clear that several key forces must have failed decisively behind the scenes for such a move to occur.

As noted in my commentary on gold prices dated 10th of September, 2025, I stated that gold should not be shorted for at least six months. This view aligns with that of most mainstream hedge funds. However, the alternative implication (investing in gold) is often perceived negatively (yes, as incompetent as I'm, naturally, I was treading on eggshells).

In the end, I can only say that very original times lie ahead; times with no precedent in history. It is a path that begins at the proverbial point of no return, and it will bring a multitude of contrasting phenomena occurring in parallel.

From what I have observed, the system (or the so-called Dao of this world) is not inherently rewarding. Rather, it is compensatory; this is why a widespread belief (or at least a formerly widespread one) persists among humanity that “goodness suffers”; often further misconstrued as “suffering is good.” The system can only compensate, but that does not imply it is inefficient. On the contrary, it is profoundly deterministic. Once a certain threshold is crossed, reckoning becomes inevitable.