Sci ENCES JANUA~ Y FEBR U A > 200 I PLAYING BOTH SIDES BY ERICA KLARREICH. 111,... 1,!1 r,,,,,,,,,.,, 1 r;uo

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Sci ENCES JANUA Y FEBR U A 200 I PLAYING BOTH SIDES Parro 11(/o pilra
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Sci ENCES JANUA Y FEBR U A 200 I PLAYING BOTH SIDES Parro 11(/o pilra io.i: slio111 s i/1at yc1 11 cc in at t1110 losi11, a111cs by s1/litclii11g betit1ee11 t/ 11. Tltc res11/t has s 1117Jris i1 i1111 lir11rio11s _ftir the or((i11s (//{/ BY ERICA KLARREICH FTEll A ST1\H. tli11g runup, the stock:; of lnten1et, 11d rtchnologv cornpan1es have ut1crld a prec1p1tous declu1l 111 rhl pasr year. A porrioho equ.11 lv. 111vcsccd 111 such rechnolo1..y.. g1.111r as A111enc,1 Online. l)ell Con1ptner, Lucent 1 ecl111olog1l.111d QuaJco1nn1, Inc.. \V1)ttid have lost half its val ue bt t\vtl il Nl.trch I and J)cL e111 ber I, 200() Uur investors can rcn1a111 fullv 111ve,ted 1n the 111arker.111d 111ake e\. even 1f thev. 0\\ 11 onlv poorly perfornung stockspro\ 1 led their portfolio include sever,11 d1ftcrcnt loers. l)n rhe suiiacc., 1t 1111ht ttlll rh:it if O \vnin one ;i11ki11 tllck ere.1 h:td ide.1. O\\ l1 1ng SL\eral ould be insane. M.1rhe111aricians, phy\1 c1s t :ind b1ologist) ha, e provc.:d ocher,.vi.,c. 1 he kly co su c.:li a counteri11tuirivc invesrrnl.nt tr.iregy.1s to rake.1dvantai:i;e ofr;u1do111 AL1cru.1rio11s in rhe pnce of thl locks fro111 day to ljy and lro111 eek ro ttk. E, cn thouh.111 the ge11er.1j trend n1.1v bl do\\11\\.ln:l. rhc pnrl of v1rtu.11lv.111\ leclu1lllg stock c ,o r:illy bnefly 1f rhc: 111.1rket 1no1neruarily believe tht lock 1 cheap enough to buv Ir 111\ tslor.. can 111a11.1gl to \Cll th.ir stock dunng rhe bnll pnce upuck that n:sltjt, Li u111 uch 1narkcr de111.1nd. and rhen shrti: tl1ose fu11m to anothc.:r tock th:ir a l un 1p. they can overco111e the geueral l o 1 11g tre nd in both tock. lt is not an u11proble111at1c.: strategy ro pull offrr::in.h1: lee\ t.ould gobble up protir. or,1 c r.1h could drop pri ce 1nonotn111c:dly lor every srock 111 the porrli)lio. Yer rhe.ilter 11.1t1 c. hold111g 0 11 to,1 losu1g srock.1 ir value progrt 1vely slip, a\\ ay. offers no \\11111ing po1bihry :u nd could k :id to far rreater losse... No one vet ha fi1u1hl a fuolproot ,, ay ro play uch odj., profic.1bl).ind reliably \vith,1 n:.tl Jo... 1ng 1;cock portfolio. Dur il tt11 n out, i11 a su rprising 11u111bcr of circu1nsrancc . th.h It 1 quire possible tu, i11 essence,.. ri111c.: rhc ntarket. 111,.... 1,!1 r,,,,,,,,,.,, 1 r;uo In orhtr \vordc;, even \\hen Olll 1 tced \V1th :1 11 u111ber u( ce 11,1 n oc; (or \V l11ch the odds of succes.ire unfavorablc.. \vherher 111 ga 111ec; of ch.111cc. in choo,1ng bet \Veen con1pcti11g pl1litu.:.1l p.1rt1es or 111 c1rclu11 t.lnl e, 111\ olvtn!l; the c1.:oud l,1,v of thern1odvna1111c,, 1l 1 pojbll to play t\vu of thi: SCl n.1noc;.1g.1in;1 e.tch lllher tll cri:,1tl.1 single \.v1 nning str,lll:gy. fhl \V01k 111gs OJ th,1t p:1r.1 doxic li result \Vere el uc1j.1tld recently by the Sp.1wsh phy\i t Ju.111 M.H... P.trrondo of .:0111plute11,1.111 Uruversil) in M.1dnd. P.11To111.lo \ho cd th.it \vh.n \\ Ollle an ob,c..ure cuno,ity i11 phy1cc; could bl ri:llv,u1t to d.tij} l1l e,111j llllllh 111ore blides. on1c 111vtSt1g;1lor th 11k J ,1rro 11do \ p.1rado: 111.1y h old the key to ctrt.1111 b1oll !{tcal processes,1nd perh.1p to the dcvelopn1t nt t i. life 1lselr. AIUtC)NllO, A: I 1 IAVI lt\111 IED. WAS N 1T 1 11 [ tit to aotlct tht p,tr.1lklx th.h be.1rs h1 11,1111e. In 199 rht FrLllth physicists Am1.111J Ajd.1n o( rhl 1,1n \chool of Lndu\tr1aJ Phy... 1c and Che111itry,111d J.1cque lroc of the Cunc Lncnure. tl... o 111 lari. d1,co\ lrld.1 n11crocopic engine th.h posesse aj1 unttuji proptrry. If le fr on, the enne pushl part1t:lec; to cbe le rt. bul 1f turned 011 and or repl.1tt dly. the L ng1ne 111ove p,1ruclt. i to rhe right insre.id. rht tninl. h1c:h 1 no\v k11uvv 11.1s.1 Hashing r.itchet. oper.1rt by lxploitj11g the randt11 11 j iggling of l1 article kno vn,b Uro\vnian 111ot1011. In I r 7 rhe l:.ngl1sh.. bnt.11mt H.obL rl ilro\\l1 ober\ej th.1l 1111crocop1c pollen grj111.,,u,ptndtd u1 \\ ater a.re in c..on r.1nr. ch;ionc nionon. I hu,t n1ouo11! ,rrc che byprodut l 11( rca... ek ss randon1 colli1on \\Ith 1nd1\1JuaJ \Vater 1uolec11lt. Each 1ndi, 1dual paruclethe 1nv1,1ble arcr iuolt Llilt.1s \vell.1 the pollen gr;uns v1s1blt 111 the 1111 croscopl.1c t rncr.1ccordancc \Vt th Ne\vton s l av o( 111ech.11ucs. Y tt t.1ki:n rogether, rhc n1 ot1011 ocrhe p;i rt1cles are o divtrst.j,,,, y I, lirt l.! 1111 I J 11 [ i C 11. NC I ; ro be ctlcctt\ t. h r.111dun1. Prcdicung thl b1. h.1, 1or n( p.1r nrlcs sub.1ecr to tht: bu1nps and gr111j, of o 1n.1ny cnllt\l hl 1.1s ti1.1srrat111g :111d. ult1111arcly, 1111pl \tb!t. prcj1cung rh, Oll t COlllC o(.1 r.111d u111 luill toss. ln vcsug::iror. trt1.1uc 11dy rrcar Bro\\ otiun JS 11011:. rcg.1rding 1r dlsu ablc but UllJV H l.thll byproduct nf.111\. n1ach1 ne l lt.11 do ls u.;l titl,, or!.. lh I l he n H 1lc1. ul1r \\..tie Fnginccrs. ho c\er. h.1, e rccenclv lt.1nhld the, 0..:1\ r don1ncss of Bro\, nonon l ) t 111. r.111. ordcrlv 1110\ cnt. Nlach 1 11e tlt,1r cj n btin Jl)l.)Ul \lll h dtrlcred 111n11nn :trc.kno\vn.1s Bru\v11ian rjtcher.;, o 11.Hn i.:d tor the 11 11pl 1. n1cc h;i nical device ch.1r co111bine.111.1v tri c \,\\.\tooth,, heel and.1 5pnng luadcd p.!\\ I. or rocker.1nn. ro rt\tnlr 111c.1 collecuon ol 1.h:Lrr10.:all clt.ug..:d p.1rnck, J1,mh11r1. d r.1ndo1n.i).1ln11g,1 glnue,!npe. A rhc p.1niclt,.11t l3ro\\ n r.u1dl.l11l 11H1uo11, hi1. lt 111.1k1., d1en1jiggk \\ 1rh lqua.l prob;ihtlil Lo Ull right.11 1d to til l llfi.1long rh.1t line.:. \\ tth.1 lig ht tin ft lllr.v.u d. \,ty. Jn\\ 11 rhl. lope. ()111. c.1 11 rhcn uperpll\t. .ilu11g rhe,jopl.111 l k l rn«pntc.:nri.11 rh.ir look 1n11cb like the tet th l fj J\v: p1.riodtl 1. nc.:r y pe.1k ne,r.. cph nn rhe leti,1jc: 1. I UlL tooth.111tl dl(ltll I g1. ntlv. do,\ n it ngh1 side. (E hjvl built t1rh p,1ri:nti.1],, fc)r c.:x.llnple. by Jepui l11tg,1\y111111c.:cril ek ctr11d..,.1long.1 line.ind che n ru 11 11i11g,1 (lllto..:111 through thl 111.} Whc::11 Cl1rr1. 1 1t t\ Lun1l J ofr in u«h.1n.1pp,1rh u,, the ch.ugej p.1rt1lll,j111pl) jilc i11 pl.1rt.1l11ng rht liue. \Vllh l llh,.light nt r do\\tl\\.1rd dritt. Whtn the l.urrc11t., tur111.j nn. ho,, c:,c:r.. 111J Lltl,,1\\ tooth p hlnt1.1l j, in1po1,.:d. the pjrurlc.i re dr:t\\ 11 ro\\.1rj tht point l1( luw1.q llllrgy. clu111p 11g: c gt th1. r in tht Lrnugh, of rht pol1.llrt.1l. N1. tlch tht rurrtnr otr d t1111t. o rh.tr rht p.1rri, li:, resu1uc: thtir r.111jo1n Bro\\ Jl!!;gling : thl tniuh, of rhl pot1.nli.ll Jrt offill to thl nglll. rht p.1 1J, le drifr,. ir b.1s.1 better.:h.111rl ofcro,sing 1 he pe.1k of the polc. 11 u.tl to it i111n1ld 1.H\. riio;hr th.111 Lhe onl to it i11111tlji.1tl l1. ti. S\vitlh the 1.11rrt:1H O il,j \t(ortd tlllll..111d rllo\l: o[ tht p.tr urll, th.1c Jnfit:d 10 the leh \\ill be..:pt h.1rl.. inro rhc,,lllll trough fro111 \\ htt h thl) \l.lrttj. Il111 n111c nfrhc p.1rticle ti t.ll drifred ro rhl n hl \Vi ii hav :: d1ilii:d \ 1J 1:1r th.it rhcy \\tll he dr.1\vn to the ttlxl trough o\ 1. r I 1 1ll h.1 polenu.il i, itt h1. d 011.tnd nil: nr.. tlashld,,11 t ltl pr1per ftllllltn1 y. the hjrgt d pjrllt lc Ill tlll fj.1,hi11g r.t[l hll \\ j]j lll,l(l h lip tht t npc. OVlltOllllllg r.1vit). rorarv n1orio11 Lo Oil\. d1n:lrin11 l. ct i//11,1rc /ll/111l1si1. 11\it I. In J 1necha 111c.il r1rrhec. rhl pa,vl ti1l l o\\ rhc contour ol chi: toothe d \Vhe\.I. T hl rccrh rhe111,1 l v1.ire gcndy.;jn pl d o 11 one side..11 rd I hl p.1,vl i n red 1 rh:ir 1r l td 11 ll l l h i\ over rhe111 he11 rhl,, heel 111n1 111 one d1rel.no11 t)11 rhc orher side ol tl11. CcLrh. ho\\\.\er. rh1. po1nc 1:111,t\\.iy harply. o tl1.1t h tl rcc rn ro Piil rhe,, hc:el 111 tl11: opposite dirl..rt1011. the pt\vl J.ltn.1g.11nr J rooth. pn:yllll 111g. rhe \vltecl ti« n 1 tun11ng.. Thu t vtll \Vhe11 the r.lll hl t i subject lll (or rt.: rlt lt \VO UJd 110Vl rb 1. \VheeJ h.h. k,rlld tcjrrh. rh action otd1l PJ I :ind rh1 Ctlrh.11J0\vs the hel l to n1ovc ill 011 lv ont d1recrio11. Such.1vn1n1ecrv.. 1s.il 1.111 t.\)cnn.tl part of tl11. dl1gn ofbro r.1rchers. u1clud111g rht one t.l1.1t 111,p1 rl d 1.11Tondn p.1r.1dox. To sec ho :1 group of nbjecr. 111 r.111do111 n1oao11 1. :in bt r.hrhetcd p 1 e l n: 1 ll1. ill y 111 onl din. ruon O\lr.1 norher. 1111,t).!. I I 111 lll( a1 IN\, I:. I It :1\ I ( 11 I t o11ld 1nodtl rhe Jl.1, l1 i1114 r:ttl het 111Jtbe111Juc.tlh. tltt n1.1che111.1nl. ti)r doin )0 ti1ru1ij,1 bll. Tht l on1plc\.t \ of rhe pnibl.: ,1dc tt.1ppl.1jj11g 011ly r11.1,,n,ill corene of phyio.:il,111d Ll 1en1. 1rir Wl 0 vl knn\\ n ti1r,,., e r.11 yea r 1 h.11 thl n: IV L Llt1\ re.illy lllllllllol1lllitivt rhcl10llltll011 in ph) :.i1. s...,,1y c: 1t.1rk, ll. J)ol nng, rh.:111.1tic1,1n.H rhe U1tiv1. r:.icv. o(milhtg.111 tn An11 Arhor. \\ho 1.0lned rhe ttm1 flj,h 111g r.nch1.:r rh tl I 1) 1 Jll,... P.1rrnnJo\ in,ig:hr .1, to lon11ul.nc: thl tl.1,h111g r.1rch1. r 111 ttnll of ga111e:.. h11.h c.:veryon1.: Lllttk r,1.111d... i nl...: thl 111CH1011 nf1111rro,1 op1c p.1rncle.;.ire.1s r.1udu111.1.,.1 o.:oi 11 to\,, i ,1rro11d11 kne\\ ht ro11h l rr.111sljrt rhe 111e, h.111 ii.: 1 f. Lh1.!1.1\htng r.1rrhlc rhe l.111g11.i?;t of,11nc LhL oryanj in the pn 1. l\ rlduc\. it 111.1thcn1Ja il co111en1 10 unple t r.1lllllll\. I thought th.it 11 \\ 11tld bt reilly n11.c 10 lxplun 01neth111g,o,11rpri,1ngJUl \\ nh rhrl e su11plt bl rs. uch,1, I I :!.. 1/ l,1nd I / Ill. P.1rrondn. I h)\t \llll l e t.ltin. 2h T lle SCll NI I. /,11111.t ) I J.11111,11).!tlll/ PJrrondo 111vt11ti:d t\vo l o1nto1ng g;i111c co e111bod\. die cssetll i.d clc111t.:nt oc the fl;1,h1ng, ratchet,,111j Slllll 111oncd lui i.:o llabor.1ror. the engineer D rck Abbott olthl Un1vcrsny ot A lcla1dc 111 Au,tr.1ha.,, hn,,.., deli httd \\tth P.irronJn i 1111ov.1t1011. T ogeth tr. they \\Orkl.J. through the Jct.ul, O\ lr cotl\.c. cnhhlin!:{ on 11apk \11adnd..:.iii:. Ont.: co1nro,i111g g.1111t \Vnuld he et u to nlli1uc du: Bro,vnian niotion of a p.trt1cle on,1 ltgln 1nclmc \\hl.ll the porent1.tl or.1 A.1h1ng r.1tche1 \V,\ tun11. d ott. pro, id111g a \lo\\. \tcjdv drag; on \Y g,. The )t . on l gainc ould m1m1c tl11.,,,\\tooth b1j\ nc the tt1b111g ratchet,, itl1 Ll1L potcnual turned on. Whe 11 he gol bjt.:k to Ausrr.1liJ, Ahborr a11d ht. colltague G rtgot) P. 11.Lnuct began co111putcr i1mul.1rin11 rn ee,, b.1t \Vould h,1pltll II they pljvcj the g.1mc a hundred rune. \ure e11uugh. \\ hen rbc\ pl.1yed t:tthl r one or the g.1n1t tor a long tulll. they lost stl ajilv. I Ir (1UTCl)MI ClF /\ \lic.i I:. l tlln Tl)i:. IN ejther of the r\\o gantt\ 15 1dll1UC.tl; \\Ill till CO\ and g.un.1 dollir. k)t the co.;.ind c back a dol!jr. The pl.1ycr begins \Vtth Olllt r,111do111 11un1 ber of lollui. In the first br.in1e che pl.1yer cosst a coin \Vc1ghted so that the odd of vvi11 11ng are slightly l es ch,u1 Su p1. 1 ce11t. In the econd g.1ntl t\vo \Veighted coins are in pl.1y: the odds of \Vtnning \VICh rhc fit coin.ire near! 75 percent 111 the pljycr . t:1vor; rhc odjs of \\Inning id1 the cconj co111.ire l e th.111 ((I percent. T he pl.1yer gcr re to the fvorablc cou1 \\ he never Iii pool of n1oney 15 11or.1 111ulnplc of chree. He n1ur ros tht un1:1 vorjble COlll \\ henevcr ht pool Of l11011c} I,I 111ltltipJc Of three. I c LS obviou rh.1c rh c firr gaine t,1 ln.l.r, but the longccnn b 1 :1 agatnr the ph1yer 111 the strond g.1n1c c.ike.1 htr of expl.1nat1011. Stn :e the ch.1n :es :ire t\\oroone :tg.1111!.t beslntung the i:,r.in1c \Vtth.1 qu.innry of dul 1.irs that 1. a 111ulttple of chrlc, 111or play1.rs \\Olild bcg111 \vich rhc coin \Vctghted in rbeir (1vor. C)ulv in one,t.1rt our of rhret 1uld the player h.1, c ro begin \\trh tht coin \Vt:1ghte l heavily.1ga1n\r h1n1. o on the 1111tial Cl tht rough oddc; ot winning arc: ( / 3 x ll.75) + (1/ J x 0.1) or :1bout 53 percent. T hink of it a a ne\v l uron1er bonu,: Plav the t :ond ga1ne Jong enough. ho\vever,.ind it beco111e 110 longer rruc rh.u the pool o( 111ouey i dt 1 1 ble bv three JUf a rh1rd of rhe t1111e. A pl.iyer \\ho pool of 1noncy 1. nor J 111ulnplc of three tends cu i.ncrea\e h1 e:1n ungs by a doll.1r Vlrh c:ich :0 111 toss. unr1j the earnings reach a n1u lrtpll of chrce. Bur any doll.tr,unount di,riib l c b, three crl.atc.1 l.1rge b.1rner to ad,.lnt.:ltuent911 ptrct:nt of the rune.1 los resulrs. I fence.ifi:t r d1l fir,t le\\ pl.1y the pool spt ndc; 111nsr ofir nn1e bounc111 bcl\veen atlll)llllh d1visibll by rhrcc and.11nounrs.1ust one dullar less. Alt hough Lite ran lon1 11Jrurc of rhe ga111e 1ueans that Lor a ill1glc ru 11 of tossc\ the 1.lld resulr could be a ndy pro tit. pl1y the \lt 0110 ga111l enough nme (I l.1rn1er and Abbott ran 50.0t I() 1111ulat1on of I (ltl to ,e. c.1rh on then l l j111pu rer)..inj the Ln.: 11d sho,\, up cle:irly ac;.1 graduaj bur tncxorabll lo NCF rill ll (ll. t.l:.i\ TUCK Al l)ll. lu:,t btio\\ on1t n1ultiple ni threc:. it prove dit:. ti cult r11 cxn acr one;elf \in1ply by pl:ivi ng tlie eto11d g;1111l. Bur P.1rrond 1 sa\\ th.n s\\ ircluug to the lir.c!:{.!till,1, a 1 co.1un1p our of th.n ntt. Although chi: ch.!nre. ot rai1ng onl \ e.1mings,1bove.1 given ruulttple of Llu ee \Vitl1 r\\o coin toe.lrl,1 n1easly 7 percc:nt 111 Ll1e ccond gan1l. thl ch:inl (\ ot doing so.in. 11c:.1rly 25 pcrt.:tnt in the iirt.lllll. And llll e nn che other ide of that tncrby barrier. icch.ing b.1ck ro chi. second \!.ltnt \LS good odds of i11crea.i11g che pot co the nexr 1nuluplt of rhrle. Alrt r 11ari11g btl\\t tl1 the r\vll g.1n1esr\vo ctiin tosses in the tirst gank fi.111 \\vtd by l\vo coin tossts in rhe t conj g,u11e run1s t\vu lt 111g proposition inro one \\inning srrattby Again. the rt,ulr; ot lxecuring char rrareg: 011.1ny ingle run of ltll r,1n \0,1ry \\ ildj, bur O\ cr the CllUl t of 50.()()(1 run of l llll toe l.i. h. rht in1u 1.1rions sho\vej.1 rrend tor uhit.111 Li,tl gai 11. l lc111ark:1hly, tvl n \Vhen tla: s \vi.rche ht twecn g;1111l \Vlrt 1nade.ir r.111do1n, the overjll gain., \Vere in1il.1r. Wich P.1rrondo\ rr,1cegy. a pl,1yer c;111 t:xtrui.:t l) lrqtll.tn opponent.1r 110 cosc ntone for free. 111 the ord 11( Ahbotr :ind I f,1rn1er. AnJ \vich 1nicrl) .copi : Dro\v rare hers, there \CtlllS to be,1 i1 11i l ar111agic :H \Vnrk. Aller. 11. thl rnndo111 1norio11 of 1110 l t cul.: i.n o l utton.nalllgo11s en the rn11do111 1urcon1es ofa :0 11 iiip1s rr.1nlar1:d irllo a t ?ad\ Ao\\. in oue dtrtcllon. But chert i J catch rhe ccond la\v uf then1ll)dy11,11111c\.. The econd la\v state) th:tt a 111ed1an1cal Yte111 l.1nn11r give rise to 111orc order rhan is ted into il In h.is discusion of tlu.: \ccond l.1\\ in ht lj.inou) lel.tttre lrie. rj1e phy cio;c R..ich,1rd P. Fevn1nan \Vhin11(,11l ugge,ted th.1r 1nicrucop 1 c rat :herandp:iwl sy r e111,1tt;1clied to :i high ly scnsiti vl vvind vane 111 ight dra\v e n ouh 1. ncrgy lro111 rhe randon1 1norion of air 111olt cule roon1 ro \\tnch up..i Bea. Fe\ ntnan dccidld rh.n lus erup \\Ould viol11e the \cconj l.t\\ of rher111 odyn.1 11iicsit \vou ld be J pcrpt ru.11 n1ottn ichine. T he tnach.inc 1111ght indeed hoi\t che fle,t. he co11clud1.::d. r:xrt:pt rh.1r 1f the 111achi.ne \Vere. reallv. buili 011 rhe n1olerul.1r, :.1le. cbe spring, too, \Voukl bt ubjecc to Bro\\ n i:ln Aurn1.1t1ons, and 0 1t \vould li!i.u r.111don1 titne\. Tht ratcht:r could rhen turn in both direlt ion ;. Al tirr gl.rncc. the Aa;hing ratchet.t lu appear ro de!) rbc ccond l,t\\ . But ;i cloer look sho\\) that here there i,.in out ;1dt.nurce of order acting on Lhe svsre111: the tnerby needed co S\Vltch the potential 011 a11j ott. Br{1\\ n1jn ratrhlt ; do not prov1dt energy for free: like all n1ocor\, 1:hey n1crely convert one to1111 of order. L 1 th a chen1icaj or clccrron1.1w1cnc energy. into.1nothlr fom1: directed 1notion. But ln1,, nijn ratchet. :ire uitit)llc 111 that noie l not a dr.i,,h.1rk for che111 hut rather an essl utial i11grt dien1. 1\i\JllV. ph yic11. h.1d.1ssu1nl d th:ir r.indon1 1u o rion \voulj ahv.1ys LtinJlr, it.1 n1:ich 11 e; afrt r.ill. r.111duru 111olecul:ir 1uotio11.,1rc; rhe esenct of the disorder!\ t.1te ro,varj \\hil h the t:co11tl l.t\\ oc rhennodyn:u11ic inexorably pull,. But the fl.1,h111g r.itcher ho\\ clue c;uch :in.1ssun1ption j, un\v;1rrantcd hy the tcond la..., : rhe device \VOttld fail en ti rely if J l I 1 lnr.irj.!lllji I lle CLE1C LI 27 Lhcrt,, ere no Hro,vnian n10lion n r.1ndon11zc rht: posir1011s of the paraclcs hen rhc polcnrial turned otf 01c gc:ner.illy thought of as 0111eLhing undcirable. on1erh111g to get nj of or ro filter a\vj\, rhc b1ochen11sr NLirtin Bur or Ll1e u Ill vers1ry of Chicago h.1\ \Vritrcn. To think of noil,,, ;()111erhing to exploit is a 111ajor liiti. or paradibrm. NTEllESTINC;L Y. fl {1pi r t\lrll\dy EX Pl 11 1 S\\ irchmg str:itci;ic i1111lar ro P.1rrondo\ 111 everyday life though tll l, of conr ;e. bec.1ue the,.ire applyu1g theorerical in,1ghr.1hour Br0\\111an 1110 uon. Uur henc,er on1eone i:h.1ngc JOb to gee :i,,tlary 1ncrc:.1se. for uistance. or,elh pc.1k1ng rock.111d buy ;lun1p 111g 011cs. Parrondo s parado\. ro111c 111co play. l\lloreo\er v orjmarv. events are govln1ld hv randomsee1111ng Hucl\.1ill10115, fron1 the ups and Jo\VllS or the financ1:tl 111,1rkcts LO tht: succession of poliucal parric 111 po\ver. Ect, i ;Ls.ind 111athe1natjc1ans have bellll to ask hcrher the pri11 c1ples of Parrondo s par.1uo\. could.1pply to decision 111al..111g 111 chose reail1l5. rondo s p.1radox can be JpplicJ ro the t ock 111.trker. Maslov 1C1u11d.t \v:iy rhar rhe valu t? or a scock portfolio can u1creasl even 1f.il1 ofits tocks decline 111 the long 1 un: The entire porttolio n1ust be old penodically cvcn Jatlyand chc rroclt:d must be quickly plo\\t: l back into repurchi1ng thl cocks 1n rhe a111e proport1011,1s they,, ere 111 tht ong111.tl portfolio. rhc: ni:t cllect of ucb periodic rebalj11c111g I to apply rhc: g.1111 fron1 Lock that arc doing ten1por.1nly better than :iverage (and have thc::rcfore incrla,ed thl1r relative proportion 111 the port1c1lio) to buy 111ore tock, that.ire re1nporan1y undcrnch 1ev 11g. The beauty of 1\t\.1,]ov proposal rs rh.h one need 11ot k11ow anythi ng about parncul.ir stocks: ply sell Lhenr ajj and chen buy d1 t n1 b.1ck in a rebalanced porttolio. Un.lt:ss the baljru.:c of invc ;rn1cnt is shifted 111 that \VaV, the longtcrrn pro plcts for a portfo!jo fuu or dud are ri111 indeed. ;JY M.1lov, 1ncc all ofche toe!.. tend LO Jccl111c \VIth ci111e. Dul M.1,lov\ rjcnc can generate bellcr returns than rhe buv.ind hold policy that 1; the currc: nt favorite of n1any ccononut . (It .hould be not 1. d. ho\vever, that che declnc in technology stocks 1nentioned al Lht: beginning of chi.1rucle n11ghr \ veil overcun1c even 1\t\asluv s str,1tcgy.) Abbotl and PCln:ondo suggest th:ir \V ltching fron1 one option to anothcr could alo provl ucfu l in :ipply1ng govlr111nlt1l pobc1cs co quancit 1c th.jc Aucr11.1re unpred1ctably: for cx;1n1plc, if t\vo policic each cause unen1ploy1ne11c to nse, altcn1ating bct\vcen thcn1 1111ght.1crually create JOb. Furrhen11orc, Abbott notes. c1c1zen could be. 111 essence. tollo 1ng P.irrondo s prmc1ple \vhe11 they, oce poltucal pa rues alternately u1to and out of otlice. Jn hon. Parrondos paradox dcnh)lltnres rhat t\vo Ton can son1erin 1c n1ake a right,111d that a ltrcle 1ndec1sion can be a good thing. ()ne n1ess.1gc of rhe Pa1Tondian ph1loso CITIZENS COULD BE rhe phys1c1st Sergei MaslO\ of l3rookh.1ven l ation.tl LaboraLorv 111 NC\\ York has sho\\ll thar princ1plcs s1111ilar ro Parfolloit1i tig Parro11do s prit1ciples 1vlze11 they vote political parties alter11ately i11to a11d 011t oj office. phy I to not be J 111oderare or,1n txtrt1u1st. but lo 1nai1tt.1i11.1 dynanur bet\\een pos1norb Lh.rt 111ay appe.ir to bl lon H1cnng. Abhorr note\. 1,1rroudo give u pen11i,,io11 co be,,111g, ocer ; in h1e, dec1s1ons. A. . po,verti.t.i as rhe 1111ghts of Parrondo s paradox 111.1y bl.1r rhe 111acro copic lev.:i. randon1jy S\virchi ng fi0 111 Ulll.. g. 1111t.. co anotber 111ay h 1vl ns grc::.he,1 irnpact.ir the nttl roscopi, sca le. In the p,1st l\v year euginec r \VOrk 111g v. 1tb uch rools.1s l.c;cr,11
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