I just finished reading Why Stock Markets Crash, a book that has been on my radar a while and I finally found it at the library of all places. Have you ever heard of this place? They have tons of books you can read for free! Anyway, the basic thesis of the book says that markets, while normally holding to effcient market theory, become highly predictable when herding behavior creates bubbles. These bubbles often take a shape that can be fit to a non-linear model of log-periodic oscillations that results in a critcal point in time or singularity. Ah, there’s that crazy, kooky word again!

Ever since I was?at university (that’s?Euro-trash for “in college”), I’ve been reading and pondering this concept of the singularity. I first heard of the idea in The Physics Of Immortality and later in The Singularity Is Near. If you’ve read any of these books, then you know what I mean by the Singularity and, if not, then basically it is a point at which greater-than-exponential growth leads to nearly vertical growth and a paradigm shift occurs that alters the system beyond recognition.?When most people refer to it, they mean?the point at which our technological advances (which are indeed growing and accelerating at a greater-than-exponential rate) will be nearly vertical and will transcend even our own brains and biology. Our computers will be smarter than us and our bodies will be nearly obsolete in the context of our technology. We could live forever in this world (or else die a horrible death as inferior beings). And the big news? It’s projected to happen in our lifetime, circa 2050.

?As full of?talking points?as this topic is, we are on a financial blog here so I’ll point out that Why Stock Markets Crash?had a final chapter that pointed something out that I had not thought of before: that the markets are plotting the same course as our technology to go “vertical” around 2050, not to mention that our collective intelligence, and that of our computers,?is going to be unfathomable. But just like?market singularities on a smaller scale (like 1987), approaching singularities the grander scales are subject to hard crashes too. And we are going to be alive for this one way or another if we don’t get hit by a bus.

So, assuming for a moment that the singularity is a possibility, does this at all change your point of view about your financial future and investments? Think about the possibilities for a moment. Money as we know it might be meaningless or worthless or transformed in a way we haven’t even thought of yet. All of our financial common sense, like saving for retirement, was based on ideas set by people who would surely die and pass on their estates to children who would also live a long life and die. What now? If the singularity brings massive intelligence, a new economy of knowledge and we literally spread across the universe, who cares about the S&P 500. In 2050, I’ll be right at today’s life expectancy and I can probably assume that medicine (also on an exponential path) will extend that plenty by then. I might need a whole new frame of mind from anyone living before me. Will the wealth I’ve built still be important then? Perhaps wealth will translate, perhaps it won’t.

So please let me know what you think the singularity or it’s crash could mean for?you in terms of your actions today in the markets and in your planning. Maybe you think it’s nonsense or maybe your ready to jump into a cryogenics tube tomorrow. Can we profit from this knowledge in a way that will even allow us to enjoy that profit? This might be the one time that selling high doesn’t much matter.