Earth Analytics

The belief of ‘looking beyond the obvious’ that we started with a decade ago, continues to burn bright and light up the path ahead – no branch of knowledge rooted in logic and reason should be ignored as all pieces eventually fit together to form a clearer picture. In this endeavor, we have ourselves been surprised at the discovery of what could be the next big event to hit markets and the world economy – not wars, or some over-leveraged sector bursting, or an overzealous government going bankrupt, although all of them are also going to take place. However, they may all be overshadowed as the magnitude of ramifications brought about by nature is far greater .

Earthquakes, floods, unexpectedly cold and wet climate, increasingly volatile weather, higher frequency appearance of tornados and cyclones, solar storms, geomagnetic shifts – our study into these phenomenon on a really long time frame has thrown up some interesting implications for the next few decades. It is also why we feel it is the right time to study these phenomenon and discover their possible impact on markets.

Everything in nature is connected and the law of cause and effect is supreme. This is clear from everyone’s own experiences and a basic understanding of the physical sciences. To understand this connection, one example is that a large body of psychological research has shown that geomagnetic storms have a profound effect on people’s moods, which affects human behavior, judgments and decisions about risk. One of the key causes of geomagnetic storms is activity on the surface of the sun, which in turn is a complex result of the ever-changing gravitational pulls on the sun’s surface of both near and far cosmic bodies. This connection makes studying the sun’s behavior a potential source of predictive clues on socio-economics.

We believe financial analysis need not be limited to just human-driven entities but should cover everything that can possibly affect markets. If an increased likelihood of extreme weather events in a region has implications for certain crops, it’s a relevant factor for predicting prices. Similarly, if a period of extreme weather has higher probability, its impact on energy prices is again relevant. There are many more such relationships which we have already found and certainly more we aim to discover going ahead.

Just as a decade of research into quantitative, qualitative and behavioral aspects of markets led us to develop the VLRT framework, qGR believes ‘Earth Analytics’ may also emerge as a valuable dimension of research in the next few decades.