I Ask Forex

Investing versus speculating

noreply@blogger.com (ryan) — Sun, 02 May 2010 00:12:00 +0000

Right about now, you may be thinking about that brother-in-law who "made a killing" in options. Or maybe you're reminiscing about the Nevada vacation when your one lucky quarter magically drew out 700 more with the pull of a slot-machine lever. Why put your money in slow-and-steady investment vehicles that merely promise double-digit returns, when you could have near-instant riches? With compounding, you have to wait patiently for years for your riches to accumulate. What if you want it all now?

Granted, there's nothing exhilarating about predictability. Matching the performance of the S&P 500 won't make you the life of the party. But neither will the far more common tales about how you lost your savings on some speculative gamble -- nor a recounting of your subsequent adventures in bankruptcy court.

You don't need a card dealer, dour strangers, or Wayne Newton background muzak to gamble. Plenty of stock market gamblers do an admirable job of losing their money on seemingly legitimate pursuits. At The Motley Fool, we believe investors "gamble" every time they commit money to something they don't understand.

Suppose you overhear your best friend's dentist's nanny talking about a company called Huge Fruit at a cocktail party. "This thing is gonna go through the roof in the next few months," she says in a stage whisper. If you call your broker the first thing the next morning to place an order for 100 shares, you've just gambled.

Do you know what Huge Fruit does? Are you familiar with its competition (Heavy Melon)? What were its earnings last quarter? There are a lot of questions you should ask about a "hot" company before you throw your hard-earned cash at it. A little knowledge could help keep you from losing a lot of money.

Remember, every dollar that you speculate with and lose is a dollar that's not working to create long-term wealth for you. Speculation promises to give you everything you want right now, but rarely delivers. In contrast, patience all but guarantees those goals down the road.

The Emperical Evidence

noreply@blogger.com (ryan) — Wed, 28 Apr 2010 21:54:00 +0000

Whether technical analysis actually works is a matter of controversy. Methods vary greatly, and different technical analysts can sometimes make contradictory predictions from the same data. Many investors claim that they experience positive returns, but academic appraisals often find that it has little predictive power.

Modern studies may be more positive: of 95 modern studies, 56 concluded that technical analysis had positive results, although data-snooping bias and other problems make the analysis difficult.

Nonlinear prediction using neural networks occasionally produces statistically significant prediction results.

A Federal Reserve working paper regarding support and resistance levels in short-term foreign exchange rates

"offers strong evidence that the levels help to predict intraday trend interruptions,"

although the

"predictive power"

of those levels was

"found to vary across the exchange rates and firms examined".

What Is Random Walk Hypothesis?

noreply@blogger.com (ryan) — Wed, 28 Apr 2010 21:47:00 +0000

Random walk hypothesis

The random walk hypothesis may be derived from the weak-form efficient markets hypothesis, which is based on the assumption that market participants take full account of any information contained in past price movements (but not necessarily other public information). In his book A Random Walk Down Wall Street, Princeton economist Burton Malkiel said that technical forecasting tools such as pattern analysis must ultimately be self-defeating.

"The problem is that once such a regularity is known to market participants, people will act in such a way that prevents it from happening in the future."

In a 1999 response to Malkiel, Andrew Lo and Craig McKinlay collected empirical papers that questioned the hypothesis' applicability that suggested a non-random and possibly predictive component to stock price movement, though they were careful to point out that rejecting random walk does not necessarily invalidate EMH.

Technicians say the EMH and random walk theories both ignore the realities of markets, in that participants are not completely rational and that current price moves are not independent of previous moves.

Critics reply that one can find virtually any chart pattern after the fact, but that this does not prove that such patterns are predictable. Technicians maintain that both theories would also invalidate numerous other trading strategies such as index arbitrage, statistical arbitrage and many other trading systems.

Market Hypothesis

noreply@blogger.com (ryan) — Tue, 27 Apr 2010 23:05:00 +0000

"Efficient market hypothesis"

"Economist Eugene Fama published the seminal paper on the EMH in the Journal of Finance in 1970, and said "In short, the evidence in support of the efficient markets model is extensive, and (somewhat uniquely in economics) contradictory evidence is sparse.""

The efficient market hypothesis (EMH) contradicts the basic tenets of technical analysis by stating that past prices cannot be used to profitably predict future prices. Thus it holds that technical analysis cannot be effective.

EMH advocates say that if prices quickly reflect all relevant information, no method (including technical analysis) can "beat the market." Developments which influence prices occur randomly and are unknowable in advance. The vast majority of academic papers find that technical trading rules, after consideration for trading costs, are not profitable

Technicians say that EMH ignores the way markets work, in that many investors base their expectations on past earnings or track record, for example. Because future stock prices can be strongly influenced by investor expectations, technicians claim it only follows that past prices influence future prices.

They also point to research in the field of behavioral finance, specifically that people are not the rational participants EMH makes them out to be. Technicians have long said that irrational human behavior influences stock prices, and that this behavior leads to predictable outcomes.

By considering the impact of emotions, cognitive errors, irrational preferences, and the dynamics of group behavior, behavioral finance offers succinct explanations of excess market volatility as well as the excess returns earned by stale information strategies.... cognitive errors may also explain the existence of market inefficiencies that spawn the systematic price movements that allow objective TA [technical analysis] methods to work.

"Author David Aronson says that the theory of behavioral finance blends with the practice of technical analysis."

EMH advocates reply that while individual market participants do not always act rationally (or have complete information), their aggregate decisions balance each other, resulting in a rational outcome (optimists who buy stock and bid the price higher are countered by pessimists who sell their stock, which keeps the price in equilibrium). Likewise, complete information is reflected in the price because all market participants bring their own individual, but incomplete, knowledge together in the market.

FORECASTING? Is it profitable?

noreply@blogger.com (ryan) — Tue, 27 Apr 2010 23:04:00 +0000

An influential 1992 study by Brock et al. which appeared to find support for technical trading rules was tested for data snooping and other problems in 1999 - the sample covered by Brock et al. was robust to data snooping.

Subsequently, a comprehensive study of the question by Amsterdam economist Gerwin Griffioen concludes that:

"for the U.S., Japanese and most Western European stock market indices the recursive out-of-sample forecasting procedure does not show to be profitable, after implementing little transaction costs. Moreover, for sufficiently high transaction costs it is found, by estimating CAPMs, that technical trading shows no statistically significant risk-corrected out-of-sample forecasting power for almost all of the stock market indices."

Transaction costs are particularly applicable to "momentum strategies"; a comprehensive 1996 review of the data and studies concluded that even small transaction costs would lead to an inability to capture any excess from such strategies.

Technical Trading Strategies

noreply@blogger.com (ryan) — Tue, 27 Apr 2010 23:03:00 +0000

Technical trading strategies were found to be effective in the Chinese marketplace by a recent study that states, "Finally, we find significant positive returns on buy trades generated by the contrarian version of the moving average crossover rule, the channel breakout rule, and the Bollinger band trading rule, after accounting for transaction costs of 0.50 percent." Nauzer J. Balsara, Gary Chen and Lin Zheng The Chinese Stock Market: An Examination of the Random Walk Model and Technical Trading Rules

Simplifying Your financial Life

noreply@blogger.com (ryan) — Mon, 26 Apr 2010 01:56:00 +0000

It seems that every year the business of keeping one's finances in order grows more complex . but you can simplify your personal financial life if you rely on a well-tested managerial technique - delegate. You can do it by using various services and plans.

save and invest painlessly by subscribing to payroll-deduction plans and salary-withholding plans at your job. in both cases, a portion of your earnings is automatically invested for you each payday. your money tends to grow fast because you get some tax breaks and your employer often marches part of what you put in.

Take advantage of the automatic dividend-reinvestment plans offered to stockholders of more than 1,300 companies, many of them utilities. Instead of collecting a dividend check from the company each quarter, you get stock equal to the value of the dividend. you usually pay no commission or fee, and the whole transaction is handled for you automatically by the company.

Price-based Indicators

noreply@blogger.com (ryan) — Wed, 21 Apr 2010 22:53:00 +0000

These indicators are generally shown below or above the main price chart.

* Advance decline line - a popular indicator of market breadth
* Average Directional Index - a widely used indicator of trend strength
* Commodity Channel Index - identifies cyclical trends
* MACD - moving average convergence/divergence
* Relative Strength Index (RSI) - oscillator showing price strength
* Stochastic oscillator - close position within recent trading range
* Trix - an oscillator showing the slope of a triple-smoothed exponential moving average
* Momentum - the rate of price change

Types of Charts

noreply@blogger.com (ryan) — Wed, 21 Apr 2010 22:45:00 +0000

* OHLC "Bar Charts" - Open-High-Low-Close charts, also known as bar charts, plot the span between the high and low prices of a trading period as a vertical line segment at the trading time, and the open and close prices with horizontal tick marks on the range line, usually a tick to the left for the open price and a tick to the right for the closing price.

* Candlestick chart - Of Japanese origin and similar to OHLC, candlesticks widen and fill the interval between the open and close prices to emphasize the open/close relationship. In the West, often black or red candle bodies represent a close lower than the open, while white, green or blue candles represent a close higher than the open price.

* Line chart - Connects the closing price values with line segments.

* Point and figure chart - a chart type employing numerical filters with only passing references to time, and which ignores time entirely in its construction.

Part-Time Jobs

noreply@blogger.com (ryan) — Fri, 16 Apr 2010 00:54:00 +0000

How to handle a part-time jobs.

by: Ryan Reyes
April. 16, 2010 2 9:25 am

A new class of high earners is working less and enjoying it more.
The number of part-timers is fast expanding, and so is the list of employers welcoming them - and willing to pay them well.

To be a professional and a part-time worker was once a contradiction in terms. But no more. Today more than a million professional choose to work part-time. some do so voluntarily, others are motivated by economic forces; but whatever the reason, one out of every eight professionals has decided to forgo full-time employment.

Incentive variations in part-time work are becoming more common. some people put in a full 40 hours or more a week but for , say, only six months or less a year. For some married couples or for two women who want to partially re-enter the work lace, job sharing makes a comportable fit. what they do is divide one position's hours and responsibilities.

The part-time work that is easiest to get is in hard-to-find specialized skills. This include medicine , law, accounting, engineering, and especially, data processing. Professionals who have experience in this areas can find many jobs.

Of course, the fewer hours you put on the job, the less money you take out. At least half of all part-timers get some fringe benefits. you also should be able to show how you would keep up with responsibilities that normally require full-time hours, such as travel and staff meetings. Always stress the quality of your work above the money the company would save on your salary.

Tracking down a part-time job at another company will take considerably more time and effort. If you get an interview, be prepared to explain how you would handle specific problems that a job might present for someone working part-time and much better if you volunteer to go full-time when emergencies arise. And offer to work a scaled-down schedule on a trial basis for a few months.

The Biggest Social Change

noreply@blogger.com (ryan) — Tue, 13 Apr 2010 23:40:00 +0000

A Simple Hints.

The continuing rise of women. Women at work for pay represent a tremendous new bloc of consumers and decision-makers. They a reach source of talent, and they will sharpen our productivity, our competitiveness in global markets and our leadership capabilities.

Now, a lady President, Managers, Senators, Congresswoman, e.t.c.
Do you think that this scenario is now happening in this world today?

Invest In Real Property

noreply@blogger.com (ryan) — Tue, 13 Apr 2010 03:09:00 +0000

By: Ryan
April. 13, 2010
Posted in: Real Property

Once you decide to invest in real property, you probably will be eager to buy something quickly and put your money to work. Many new real estate investors underestimate the complexity of the field and overestimate how much they know about it.

Immerse yourself in a study of real estate as you would any new business venture. talk with other investors and brokers; that will help you pinpoint the neighborhoods with the best investment potential. Seek out areas that have begun to gain favor among young householders as an alternative to more expensive established neighborhoods.

Look for good transportation, shopping and schools and a strong, diversified employment base.
Then you can narrow your search to specific properties. your best ally is likely to be a broker who is knowledgeable about your chosen area. check his or her reputation with local banker and attorneys. discuss with the broker your debt limit and investment standards.

Other sources of sale properties are newspaper real estate sections. if you find a property that approaches your standards, investigate it thoroughly. Look for a modern furnace. Be alert for sign of trouble. You can confirm the stated age of a building by looking inside the toilet tank; most are stamped with their date of manufacture. Or look for a city building inspector's sticker.

Before investing in a rental house or apartment building, always ask yourself.

Does it make financial sense for you?
Can you really afford the initial cash outlay?

Careful Shopping for Car Insurance

noreply@blogger.com (ryan) — Sat, 10 Apr 2010 01:32:00 +0000

Your Auto Policies

By: Ryan Reyes
Date: April. 10, 2010 @ 9:30 A.M.

Categories: Insurance Policy

Tags: Insurance, Salesmen, Attorney, Uninsured motorist, Medical Policy

Yes it is, car insurance is more important than ever. Insurance salesmen naturally try to sell their standard, fully loaded policy. It contains six basic types of coverage.

Listed are:

1. Bodily Injury
2. Property damage
3. Uninsured motorist
4. Medical payments
5. Collision
6. Comprehensive

Don't skimp on bodily injury liability and property damage liability coverage. If you or anybody driving your car with your permission is in an accident in which someone is killed or injured, bodily injury liability coverage pays you for an attorney to depend against lawsuits by victims of an accident.

It also pays other court cost and any judgments against you. Property damage liability covers property that you do not own. If you have substantial assets that could be seized in a court to pay off a judgment that exceeds your auto coverage, you should consider an additional umbrella policy.

In some states, you are required to buy uninsured-motorist coverage. It pays you for injuries caused by a hit-and-run driver or someone who cannot pay a judgment. Yet if it is not required and if you have adequate health and disability insurance where you work, you may not need uninsured-motorist coverage, nor medical payments coverage.

Both may largely duplicate protection already supplied by your regular medical policy.

Your Biggest Investment

noreply@blogger.com (ryan) — Fri, 09 Apr 2010 02:38:00 +0000

Giving Your house Its Semi-annual Physical

By: Ryan Reyes
Date: April 9, 2010 @ 11:00 A.M.

Categories: Housing Maintenance

Tags: Painting, Repair, Houses, Inspections

"A house is a home, shelter, building or structure that is a dwelling or place for habitation by human beings."

Every spring and autumn is the time to save money, and protect what is probably your biggest investment, by giving your house its semi-annual top-to-bottom physical examination. No matter how invulnerable your home may look, hazard to its health lurk almost everywhere. So it pays to head off problems in the early stages by practicing preventive maintenance. If you take care of your house, it will take care of you. In sum, you will get more for it when you sell it.

The best way to handle maintenance chores is to put them on a schedule. For newer houses and those in mild climates, an annual inspection tour should suffice. but if your house is more than 10 years old or has to weather ice and snow, you are wise to make quarterly checkups.

You also can save both time and money by repairing your house in stages rather than all at once. The south side usually needs painting every three to six years. The other side require it only every eight to ten years.

Playing the Riskiest Game

noreply@blogger.com (ryan) — Thu, 08 Apr 2010 00:09:00 +0000

By: Ryan Reyes

Date: April 8, 2010 @ 8:01 A.M

Categories: Commodities

Tags: Risk, Amateur traders, Investment

For those who yearn for the fastest, toughest, highest-risk financial game of all, there are commodities. As many as 90% of all amateur traders lose money and drop out within a
year, and the only consistent winners are the brokers who charge you commisions.

Still, if you crave excitement and have a cast-iron stomach, commodities trading can offer impressive gains for that tiny portion of your investable funds that you are willing to put
completely at risk-your mad money. But unless you are an expert, never put more than a nickel or dime out of every investment dollar into commodities.

Small investors who speculate in commodities make two major mistakes. Many of them operate on the basis of tips; they are often wrong, and the amateurs cannot hope to match the professional traders for access to update, accurate information about markets. Small investors also tend to be undercapitalized.

To stay in this game, you should have a dollars in reserve, ready to commit, for every dollar you put up.

Fibonacci

noreply@blogger.com (ryan) — Thu, 01 Apr 2010 01:11:00 +0000

"Leonardo Fibonacci was born around AD 1170 to Guglielmo Fibonacci, a wealthy Italian merchant. Guglielmo directed a trading post (by some accounts he was the consultant for Pisa) in Bugia, a port east of Algiers in the Almohad dynasty's sultanate in North Africa (now Bejaia, Algeria). "

Leonardo Pisano Bogollo, (c. 1170 – c. 1250) also known as Leonardo of Pisa, Leonardo Pisano, Leonardo Bonacci, Leonardo Fibonacci, or, most commonly, simply Fibonacci, was an Italian mathematician, considered by some "the most talented western mathematician of the Middle Ages."

Fibonacci is best known to the modern world for:

* The spreading of the Hindu-Arabic numeral system in Europe, primarily through the publication in the early 13th century of his Book of Calculation, the Liber Abaci.

* A number sequence named after him known as the Fibonacci numbers, which he did not discover but used as an example in the Liber Abaci.

Fibonacci
Nationality: Italian
Fields: Mathematician

Known for:

Fibonacci number
Fibonacci prime
Brahmagupta–Fibonacci identity
Fibonacci polynomials
Fibonacci pseudoprime
Fibonacci word
Reciprocal Fibonacci constant
Introduction of digital notation to Europe
Pisano period
Practical number

noreply@blogger.com (ryan) — Wed, 31 Mar 2010 09:10:00 +0000

"In hyperinflation episodes, real quantity of money sharply fell and remained at low levels for a long time."

"Trends of Money"

Long-term trends -Nominal money quantity has always grown, apart from few pathological events. Real money quantity has grown most of the time.

Business cycle behaviour - Nominal money quantity is usually pro-cyclical, sometimes leading real GDP peaks.

noreply@blogger.com (ryan) — Wed, 31 Mar 2010 09:08:00 +0000

"High growth rates in nominal money quantity, if clearly exeeding nominal GDP rates, can exert inflationary pressures."

Impact On Other Variables of Money"

If economic agents base their expectations about future inflation on the money quantity, one would expect the present inflation rate boosted by money quantity growth. But this is dependent on how present prices are influenced by mere expectations.

In many empirical instances, a certain increase of money quantity have turned out to be conducive to growth in real GDP.

Many short run acceleration or deceleration of the money quantity remain without any noticeable effects on other variables.

noreply@blogger.com (ryan) — Wed, 31 Mar 2010 09:07:00 +0000

"Determinants of Money"

"International money quantity, i.e. the national quantities of money converted in one common currency at the prevailing nominal exchange rates, is completely out of control."

Narrowly-defined money is heavily influenced by central banks. Instead, depositors, banks, financial and public institutions play a crucial role for broad money aggregates.

With respect to the general economic climate, a booming economy usually exhibits a high growth of money quantity. By contrast, in hyperinflation, real money is drastically squeezed.

noreply@blogger.com (ryan) — Wed, 31 Mar 2010 09:06:00 +0000

"Composition of Money "

"The narrowest definition of money, the monetary base comprehends only cash outside banks plus bank reserves, the latter including both cash reserves held by banks and banks' deposits at the central bank."

Money quantity is the nominal value of particularly "liquid" financial instruments in an economy. "Liquidity" means that an asset is easy to sell in any moment with small or no losses in respect to nominal price

There exist a few definitions of money quantity, some broader than others, i.e. including a wider range of financial instruments.

For the following definitions, a series of simplification has been taken to keep things easy. Moreover, there exist significant international differences in definitions, especially for broader money definitions (M2 and M3).

Larger than the monetary base, M1 comprehends cash and current accounts in banks.

M2 is M1 plus the savings account.

M3 is M2 plus other liquid liabilities of monetary financial institutions.

Thus, although a largely accepted image of money doesn't associate it to interest-bearing, some definitions do comprehend interest-bearing assets.

A crucial distinction is between nominal and real quantity of money, the latter being equal to the former divided by price level. In this way, real money dynamics becomes dependent on inflation.
This is particularly important, since inflation, in its turn, is dependent on nominal and real quantity of money, too.

noreply@blogger.com (ryan) — Wed, 31 Mar 2010 09:03:00 +0000

"Significance of Money "

"Money is whatever can be used in order to settle payments. Nowadays, the most common kind of money are current accounts in the banks."

Cash, a self-evident component of money, has a short life out of the banks. Within few days is spent, for example in a shop, and the shopkeeper brings urgently cash back to a bank.

Money plays three main roles:

1. It is the medium of exchange that settle payments. People accept money in exchange of goods and services. Nothing is owed anymore.

2. Money is the most common medium of account, i.e. it is the good some quantity of which serves as unit of account for prices. Prices are expressed using monetary expressions.

3. Money is a store of value over time and across people, firms, countries. Selling things gives money that can be saved and spent in the future for many different goods and services. However, there exist other financial instruments - and even goods - that can serve as a store of value as well.

Self-Conciousness Of Social Group

noreply@blogger.com (ryan) — Mon, 29 Mar 2010 05:38:00 +0000

One can have a strong consciousness of belonging to a certain group, who has specific material and non-material common interests as well as characteristic way of developing strategies, organizing and acting. But this is not always the case, since it is the result of personal, generational, collective experience.

Usually, the researcher take existing groups and then look at how they react to events and issues. But one can take the other way round and look how social identities arise from conflict and confrontation with "strangers". It's when you are under attack from "somebody" that you look at possible helpers - people on the same part of the barricades. A recognized leadership and an organizational hierarchy help a lot in transforming a latent identity into a co-ordinated multi-agent force.

In more "peaceful" situations, an individual may belong to more than one group and the axis - along which he feels to be defined - can be changed by mass media pressure as well as by specific events.

In a macro-perspective, "totalizing identities" as ethnicity, language, religion can reduce the subjective importance of other social boundaries.

In a micro-perspective, the consciousness of collective identity can arise from current participation to social activities and events, especially when they have a characteristic mass dimension: large factories, manifestations, church rites, stadiums, music concerts.

Significance Of Social Group

noreply@blogger.com (ryan) — Mon, 29 Mar 2010 05:37:00 +0000

by Valentino Piana (2004)

Social Groups

Contents

1. Significance

2. Social groups defined along income and non-income axes

3. Core vs. periphery

4. The boundaries of social groups

5. Self-consciousness of social groups

6. Formal models

7. Data

Throughout the world, societies are split into distinct, albeit sometimes overlapping, social groups.

While self-definition - and self-defined belonging to groups - widely varies over time and situations for even the same individual, there are several indicators and features along which the researcher can build clusters of people.

Indeed, the atomistic idea according to which everyone feels to be dissimilar from anybody else is a realistic picture only of very extreme social conditions. Networks of people linked by communication and emotional lines are very common, while their collapse into monistic units of disconnected individuals is more the result of crashes in the social texture than the standard state.

This is very important for economics since, for instance, social groups are important for consumption as visible behaviour can become a standard with which to compare your owns. Peer groups are often the reference for choosing whether a certain good is a "must have", engendering an imitation dynamics.

In this vein, another name for "social group" is "market segment", seen from the point of view of a seller or a mass medium, to which a differentiated product can be addressed.

Social groups defined along income and non-income axes

noreply@blogger.com (ryan) — Mon, 29 Mar 2010 05:36:00 +0000

A basic axis of social differentiation is personal income. A three-category distinction among the poor, the middle class and the rich, as the one we proposed here, can be too rough to capture all the intermediate nuances but still help characterize different societies.

The unit of analysis can be - but not need to be only - the individual. A second element should be kept into account when judging the individual's position: the size and composition of the household to which he or she belongs. Larger families pay less per-person for certain shared expenditure (like housing) and they can have more than one income-bearer. If not, a large family with only one income-bearer would be much poorer than a one-component family.

A third consideration is linked to the stability of income over time, with people having larger fluctuations in income belonging to different social groups than people reaching systematically and without renegotiation similar levels of income.

Another crucial axis of social differentiation is the ownership of assets. Families that own their home - having already paid back any financial instruments to buy it - can devote more money to active savings and consumption than families with the same level of income but that have to pay the rent. The ownership of durable goods is an important status element aiding different aspects of life. Financial assets (as Treasury bonds, shares, controlling majorities in firms,...) can constitute elements of common material interests for certain social groups.

Employment is an extremely important element in defining identities and common interests, common languages and values. Equally important are culture and levels of education.

Core vs. Periphery Of Social Group

noreply@blogger.com (ryan) — Mon, 29 Mar 2010 05:35:00 +0000

Economists often ignore many of those axes and are tempted to treat each of them as uncorrelated to the others.

But sociology has convincingly shown that these axes tend to covariate, so that rich people tend to be more educated, to have top jobs, to participate more to social life and decision-making.

Thus one should distinguish a core of society (people with more than certain thresholds of income, education, ... and strong connections through social communication channels) - which actively takes part to public life - in contrast to social periphery, a more or less marginal layer of people (poor, emarginated, isolated) [1].

Social cohesion is what keep society united, avoiding the polarization of core vs. periphery. To measure social cohesion, one should look at how deep is the gap between the so-called "have's" and "have not's" (as in the case of "digital divide", the access to clean water, or the softer concept of "employability") and how fast is this gap filled through a diffusion dynamics.

Electoral participation is much higher in the core than in the periphery. This explains - in part - why, even in quite polarized society, democratic election can be won by parties making the interests of the small minority of rich.