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« The Scatter Plot Challenge | Main | Ben and Barry.....and Barney, too »

February 13, 2007



Very nice explanation Prof!


Tom -- Thanks for your comment! And you get the main idea. My analysis of this research was not really aimed at a particular market recommendation. It is about the difficulty in interpreting research.

I love Taleb's book, Fooled by Randomness, and bought many copies to send to clients.

Two things --

First, I do not believe that those doing this research were intentionally trying to deceive or mislead. It is very easy to think that you have made an exciting discovery, particularly when you are supposed to be cranking out new material every week. Academics have more luxury to re-examine and get peer review.

Second, if you stay with this series, you will see that some apparently non-statistical methods are just as misleading!

Thanks again.


Tom L

This is one of the most important articles I've read in months. Not because of the specific market conclusions, but for the illustration of how dangerous it is to rely on statistical presentations coming from other people, even supposedly reputable sources. Nassim Taleb has talked a lot about how widespread this kind of thing is and this example is great. It has everything: misuse of fitting functions, massaging of data, misleading graphical depictions... A really excellent, concrete example and warning to the non-statistically-savvy amongst us out there.



marlyn trades

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Nice. Look forward to your upcoming two-dimensional projections of multi-dimensional graphs :).

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