Power Laws at Work in Financial Markets

I am working on a good¬†post for the first “Counterfactual Friday.” Unfortunaltely it will probably not be posted until Monday. In the meantime enjoy the following:

I have attached a link to a terrific article on power law distributions and their ability to explain financial market phenomena as compared with the standard bell curve. Mauboussin has been writing about power laws in finance and economics for a while. (H/T Infectious Greed)

http://www.sciencenews.org/view/feature/id/335383/title/Beware_the_Long_Tail?utm_medium=twitter&utm_source=twitterfeed

 

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