Case Study Course on Price Fluctuations
Sir Isaac Newton and George Marechal
Of the two kinds of change in the
Universe, flowing change and random change, we are indebted to Newton's
invention of the Calculus that enables us to find out in advance the
conditions that flowing change will produce in the future. His
discovery of the natural law that Action and Reaction are equal and
opposite in the field of physics also has been applied in the Course to
the random changes of price movements in free markets. This application
of the Action-Reaction law enables you to learn in advance where the
probable reversals of price trends will come in the future. We owe this
application to the late Roger Babson, who credited this law as the
basis for his fortune of over $50,000,000.
When we speak of any scientific law, we
mean a statement that a relationship has been observed among certain
given conditions. We mean “if these conditions now, then those
conditions will follow, and can be expressed mathematically”. We have
“order” through which we can know the outcome from these conditions. We
can therefore take advantage of this knowledge, and thereby progress
and profit.
So Newton was one of the great discoverers
of this “orderliness” that underlies all of the Creator’s work, even if
we are often slow in discovering it. Newton’s Laws therefore as stated
above, have benefited the users in both flowing and random changes.
The definition of randomness implies that
future conditions are unascertainable, because there seems to be a lack
of order underlying such change. Such has been the almost universal
belief, still prevalent with most people as far as price prediction is
concerned.
Marechal, also by mathematical methods of
his own was the first to demonstrate that there is also order
underlying the so-called random changes in price fluctuations. No
professor in any University, no government economist, has ever been
able to produce a similar chart showing as Marechal’s famous chart,
copyrighted in advance, what the Dow Jones Industrial Stock averages
would do 18 years ahead. As one of many other examples of this
mathematical orderliness regulating the flow of stock prices, the
writer received from this remarkable man now approaching 90, several
months before President Nixon’s election, an accurate prognostication
of what the DJ Industrial Averages would be the day after Nixon’s
election.
Many others such as classmate Dewey’s
Foundation for the Study of Cycles have shown the “order” underlying
stock and future prices. For example the recent rise in price of Copper
futures was predicted by the cyclical studies of that Foundation
several years before the advance took place.
So now and during each of the past ten
years your Foundation for Economic Stabilisation has presented this
Case Study Course on the predictability of prices, summing up the
results of thirty years of research and inquiry among successful
investors. By the use of these Course Rules never before published
except by your Foundation, you as a Course member will have an
advantage over others without knowledge of these Rules.
Alan H. Andrews, Director |