DEAR MR. PEASE,
The “Financial Floobydust” section of your latest piece is, I think, anything but floobydust (Jan. 15; ED Online 20410). I believe you have touched upon a fundamental weakness at the core of so much financial and macroeconomic modeling, black-box investing, and other quantitative aspects of high finance.
As you know, financial practitioners use models of all stripes to express expectations for future trends, from the price of cocoa beans to interest-rate levels. Clearly, the industry’s track record with respect to modeling such expectations has been abysmal for the last decade. And we do not appear to be getting any better at it.
I believe that financial practitioners must reassess some of our most basic forecasting practices, from the assumptions that go into our models to the techniques we have for generating output. I especially think that practitioners are too trigonometryimpaired (having not once, that I can recall, seen a wave function to forecast cyclicality or to project a detrended data series in the 10 years that I have worked as an analyst in capital markets).
In short, I think financial analysts have a lot more to learn from electrical engineers— with their practical, hands-on modeling skills—than from the theoretical physicists and pure “quants” behind every discredited financial model from long-term capital management to the CDS securitizations. The industry is looking in the wrong place, for the wrong kind of math—and finding it, to the repeated detriment of the global economic system.
I am nearing completion of a book entitled Fringe Statistics: The Hunt for Crisis- Proof Financial Models. The goal is to describe, in a way that financial practitioners can understand, how best to “import” certain time-tested, disciplined quantitative techniques broadly used in other fields to the field of finance (as well as to resuscitate certain techniques once at use in my field, but which have fallen by the wayside).
Unfortunately, I don’t know any electrical engineers with whom I could “kick the tires” on this subject. And I believe it is critical that I get input from true scientists. I respect your viewpoint and would very much appreciate the opportunity to speak with you by phone. (Informally and “off the record” is fine. I am not a journalist, just a budding author.)
HELLO, TROY PEERY,
Yeah, we agree on many things. Let’s talk. I’ll give you a call one of these mornings. But I would be very cautious about your phrase “Crisis-Proof Financial Models.” I would tend to say “Crisis-Resistant...” On the other hand, the models we have seen recently were pretty disastrous, weren’t they? Best wishes.
HI MR. PEASE,
I work with piezoelectrics, so the topic of boost converters is always of interest, particularly getting 3 to 12 V dc (That 4:1 range is brutal! If we could do it from 6 to 12 V, would that be okay? /rap) up to 150 V dc or so, at up to 10-W power levels. (Yeah, all you want is 70 mA out for 4 A input. /rap) With high efficiency. In zero space. I seem to be hampered by two things.
First, published suggestions for operating conditions, and standard formulas that work fine for most LV converters, yield poor efficiency and/or smoke when applied to HV boost converters. Ringing between inductor and diode can be excessive, and my low-RDS HV MOSFETs have huge gate capacitances that prevent me from working at the frequencies necessary to use reasonably sized components. I’m not even sure my inductors are good at the frequencies where I want to use them. My customer has a saying, “fight for every millimeter,” and displays more than a little terror when confronted with an inductor that’s larger than an 0805 resistor.
(I may be able to sell you a “Camel Amplifier.” That is a circuit, no one part of which is so hard, but the total system becomes impossible. /rap)
Second, we want off-the-shelf parts, and there never seems to be enough information about commercial inductors to calculate a design. It always ends up being trial and error in the form of “Install a smaller part. If it burns up, go one size larger.” Shades of Muntz TV. So, do you have any advice for designing HV converters? Ideally, a list of pitfalls unique to HV boost circuits and how to address them. Is an 85% to 95% efficiency converter even possible in the boost configuration?
With all your conditions? Probably not. That is beastly hard. I’ll ask around. You want it to be SC-proof on the output, too? My move.
PEASE TO AMARILLO
I got a letter from a guy named Michael asking for help on a high-Z problem. But he didn’t include his address, his e-mail address, his phone or fax number, or even his last name. If the postal service hadn’t stamped “Amarillo” as the postmark, I wouldn’t even know how to identify him at all. So, Michael, you’ll have to give me more info before I can help you.