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New Managers
October 2014
The Marketing Challenge: Riding the tides
While reading a biography about a long distance swimmer who successfully navigated some of the world's most challenging deep sea passages utilizing nothing more than a standard swimsuit, goggles and lanoline oil, I learned about the gravitational effect of tides, which in turn sparked a connection to the market forces that often dictate the global market movements. The physics of tidal pulls present an interesting parallel to some of the market cycles the asset management world has found difficult to navigate over the recent past. Perhaps taking a closer look at the two forces—tides and money flows— might offer some insight into what lies ahead for investment managers and investors. Going solar First, let's refresh our science background with a brief lesson on tides, courtesy of The Farmer's Almanac's website. Tidal flows are the result of the gravitational pull on the earth of themoon and the sun. Surprisingly, the sun has less of an impact on the earth's oceans than does the moon, based primarily on the relative distances each occupy from the earth. The sun exerts only 46% of the pull that the moon does on the earth's tides.Higher tides occur during these moon phases.
When the gravitational effects of the sun and the moon combine, we get spring tides, which have nothing to do with the season of spring. The term refers to the action of the seas springing out and then springing back. These are times of 'higher high tides' and 'lower low tides.' A week later, during either of the two quarter moon phases, when the sun and moon are at right angles to each other and their tidal influences partially cancel each other out, neap tides occur, and the tidal range is minimal. In fact, because the oceans take a bit of time to catch up to the geometry of the moon, spring and neap tides usually occur about a day after the respective lunar cycles. ...................... To view our full article please login
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