Re: Timely

Dave Long (dl@silcom.com)
Tue, 15 Jun 1999 23:07:50 -0700


> But there is also, I think, another moral. If being smart is no
> guarantee of being right, having been right is not necessarily an
> indicator that someone is smart. Suppose that you hear someone
> making what sounds like a dumb argument, but you know that he has
> an impressive track record at market or economic prediction. Guess
> what: The argument may be as dumb as it sounds.

there's a good expansion on this topic:

Monkeys on a Typewriter - Introduction to the Survivorship Bias
<http://pweb.netcom.com/~ntaleb/monkeys.htm>

Rohit may wish to see:
<http://pweb.netcom.com/~ntaleb/burnout.htm>
about his "stock portfolios bleating in real-time with every loss"

Another of Taleb's pages discusses the "peso problem": strategies that offer
low volatility high returns, until one day when something unforeseen happens
("exogenous shock") and the position tanks. I am reminded of the world at the
beginning of the century: a globalized economy, assembly lines providing the
atoms, telegraphs providing the bits, and Taylor and Fayol providing the New
Paradigm. No doubt they could have done much for Progress, if it hadn't been
for that pesky Great War.

-Dave