Technological forecasting at the stock market

Under the assumption that competition (Darwinian in nature) reigns in the s tock market, we analyze the behavior of company stocks as if they were spec ies competing for investors' resources. The approach requires the study of dollar values and share volumes, daily exchanged in the stock market, via l ogistic growth functions. These two variables, in contrast to prices, obey the law of natural growth in competition, which like every natural law, is endowed with predictability. A number of unexpected insights about the stoc k marker emerge. The forecasts indicate that whereas there is no looming cr ash in the near future, no significant growth should be expected either. Th e DJIA is to hover around 9500 depicting large erratic excursions above and below this level for a few years. The use of Volterra-Lotka equations demo nstrates that the 1987 crash altered the stock-bond interaction from a symb iotic to a predator-prey relationship with stocks acting as predators. This research work has lead to the publication of the book An S-Shaped Trail to Wall Street by T. Modis, (Growth Dynamics, Geneva, 1999). (C) 1999 Elsevie r Science Inc.