Adam Sotowicz. Managing.Director. of Price Dynamics Ltd.
Price Dynamics Ltd was set up in Nov 2012. The main aim of the company is to provide forecasts for Indexes, Forex, Commodities, Equities, ETFs and Economic Indicators and screening tools to identify where the best trading opportunities may lie.
Previously he was Head of Mathematical Modelling at BME Price Models Ltd where he developed price models for the metals industry and prior to that, Head of I.T. at Bloomsbury Minerals Economics Ltd.
He has been involved in Teaching and Lecturing after doing research at the Royal School of Mines and obtaining a Ph.D at University College London in Chemistry.
While still an undergraduate he was in the team that discovered 1,4 oxymercuration. He has a B.Sc. and Ph.D., both in Chemistry from University College London, and undertook post-doctoral research on synthesis of new compounds for leaching uranium ores at the Royal School of Mines, part of Imperial College London. He subsequently went into teaching for a while, in the UK and Spain, after obtaining a PGCE at Homerton, Cambridge. He has also taught Chemistry at the Open University Summer School.
BME Price Models Limited
BME Price Models Limited (‘BMEPM’) was formed to house the mathematical modelling work of the publishing and consultancy company Bloomsbury Minerals Economics Limited (‘Bloomsbury’), which up to that point had been purely traditional copper market specialists. Modelling work began in 2003, when the markets for base metals still showed simple industrial raw material type price behaviour. Bloomsbury developed price models driven by stocks, the rate of demand growth and dollar strength for all of the LME metals. These were quite simple models, yet they gave Bloomsbury a very good forecasting track record, which attracted the attention of a specialist hedge fund, with which BME worked closely for four years. Models of the same type might still be expected to confer advantage today where markets remain traditional, except that one would probably want to introduce an extra driver for input costs of energy.
However, as Commodity Index Funds began to buy and roll long-only nearby futures positions for many exchange-traded commodities and as specialist Hedge Funds (whose investors came in predominately wanting long positions, having been sold on the ‘China story’) bought options and physical with a usually net long balance, the prices of the ‘investible’ exchange traded commodities broke away upwards from those that would have corresponded to the same physical market conditions before. This happened in crude oil in late 2004, copper and gold in August 2005, aluminium around end 2005, zinc and lead in 2006, depending in part on their weightings in the index funds of the day. The old models ceased to work.
Two changes were required by this shift in the investible commodities markets. First, the Long-Term Models were adapted to become hybrids, reflecting the new nature of the beast: part traditional industrial raw material, part new and very immature investment vehicle. Second, as the old so-called fundamentals took a back seat in short-term price behaviour, quite different Short-Term Models were introduced.