Today is Ultimate Pi Day, a once-in-a-century event celebrated by all American mathematicians (and some folks worldwide who understand the American date system).
Of course, I’m referring to the irrational number 3.14159265358979…
So today, on 3.14.15, at 9:26 AM (and 54 seconds if you round the seconds), is the ultimate time on this special day that happens once a century.
But why bother bringing this up on an investment blog?
Pi is defined to be the ratio between the circumference of a circle to its diameter. So by its very definition, Pi relates to things that are cyclical. And markets tend to have cyclical behavior. So when you analyze the stock market behavior using mathematics, you will see the number Pi coming up all the time. This is the case no matter if you use statistics, signal processing or more complex methods like machine learning algorithms. An analysis of even the simplest form of signal processing, like the well known simple moving average, will come back with Pi in the mathematics. Pi is everywhere, and it turns out it’s a very powerful number from which to develop an investment analysis toolbox.
So Celebrate Ultimate Pi Day
And now to the next question: what’s the most appropriate way to celebrate Pi day?
Some statisticians will be running simulations to estimate the value of Pi using random numbers. This is interesting in its own right, and it ought to be respected.
Others will be drawing Pie charts to impress people with stuff they know absolutely nothing about:
Remember that pies are meant to be eaten, whereas Pi is useful as a tool for analyzing your investments. 🙂
As for me, I proposed to my kids that we should get together as a family on Saturday morning, and learn about the beauty of Pi and its relevance to the modern world. Their response: Let’s bake a blueberry one!
Enjoy Pi Day!