Cybernetic thinking and share-price prediction

Abstract

The thesis presents the application of cybernetic thinking to the central problem of investment analysis; that of share-price prediction. Cybernetics is seen as an inter-disciplinary study (as opposed to multi-disciplinary) in which the barriers between living and non-living systems are ignored.

Suggestions from two independant studies in investment analysis are taken tip and a theory of investment is proposed with a view to utilising the suggestions. The theory is formalised using the simple linear perceptron and methods based on logical calculi are used to analyse the perceptron formulation. The theory is then tested by allowing the perceptron to make predictions and the results of these predictions are discussed in the light of the theoretical analysis. Finally suggestions are made for alternative approaches to investment analysis which could lead to better results.