It’s rather surprising then, that people who success many times in the row, tend to employ eigenvalues rather than use igon value. Why could that be?
Of course, the role of luck in market is huge. But among the sequential winners, you will tend to find people who win a bit more than 50% of the time. There’s many opportunities to do something very stupid (e.g. invest in hydrinos) and lose.
Presumably that people who know what they’re talking about are less likely to make obvious errors in jargon. And that Gladwell was the person who made that particular error in jargon, in the very book that’s being quoted, and that this is an example of Gladwell’s glibness and lack of deeper knowledge of things he’s talking about in this case and in general.
It’s sort of an odd example, though, since Gladwell himself consistently succeeds.
ETA: Given the downvote, maybe I should clarify that I don’t mean that Gladwell succeeds at being the kind of writer that I would want to read. I mean that he consistently succeeds at writing best-selling books. The “igon-value” thing was cringe-inducing, but it plausibly hasn’t done any significant harm to his sales. Apparently, you can be careless in that way and still succeed fantastically, again and again, with his target audience.
So, in that sense, he’s not a good example for the claim that “people who success many times in the row, tend to employ eigenvalues rather than use igon value.” (Though, of course, his existence doesn’t disproves the claim, either.)
The point is that the consecutively successful investment managers tend to have more clue than unsuccessful ones. Of course, the luck plays a huge role, but over ten years, if we assume that super skilled have success rate of 0.6 and low skilled have success rate of 0.4, there’s 57-fold difference in ‘survival’.
Let me point out that you can make very straightforward Bayesian estimates of performance/skill/alpha by starting with, say, zero-alpha prior and then updating on monthly returns.
Of course, the role of luck in market is huge. But among the sequential winners, you will tend to find people who win a bit more than 50% of the time. There’s many opportunities to do something very stupid (e.g. invest in hydrinos) and lose.
Of course, the record is full of people who make money for years, only to explode later on (look at John Meriwether’s career up until Long Term Capital Management blew up so spectacularly). Were these people always just lucky? We can never know. I take Taleb’s point (filtered through Gladwell) to be that the base of people actively trading is so large that we should expect people who are successful for years (possibly even whole careers) even if all that is operating is luck, so past performance is no guarantee of future gains. I don’t entirely agree, but its decent advice to keep in mind. Especially bad for the home investor is constantly chasing the funds that most recently made money (for some definition of recent)- generally the fees went up on the backs of the improved performance, so as performance falls back to the market value the investors will make less (lost to the higher fees).
Also an irony worth pointing out- Randy Mills of Blacklight Power/Hydrino fame has tried to create credibility for his company by pointing to the savvy investors who did get in board.
Of course, the record is full of people who make money for years, only to explode later on (look at John Meriwether’s career up until Long Term Capital Management blew up so spectacularly). Were these people always just lucky? We can never know.
If the best win at a rate of 60% and worst at a rate of 40% , plenty of the best will explode later on.
Also an irony worth pointing out- Randy Mills of Blacklight Power/Hydrino fame has tried to create credibility for his company by pointing to the savvy investors who did get in board.
The point is that knowing some physics protects you from the likes of Randy Mills. So you do a bit better than mere luck. Also, if you’re a so called savvy investor, and you invest into some crap like hydrinos, you may even get gains (if you sell after others jump onto the bandwagon just because you did).
It’s rather surprising then, that people who success many times in the row, tend to employ eigenvalues rather than use igon value. Why could that be?
Of course, the role of luck in market is huge. But among the sequential winners, you will tend to find people who win a bit more than 50% of the time. There’s many opportunities to do something very stupid (e.g. invest in hydrinos) and lose.
Igon value
I think you’re making a joke, but I’m not sure what the joke is.
Presumably that people who know what they’re talking about are less likely to make obvious errors in jargon. And that Gladwell was the person who made that particular error in jargon, in the very book that’s being quoted, and that this is an example of Gladwell’s glibness and lack of deeper knowledge of things he’s talking about in this case and in general.
It’s sort of an odd example, though, since Gladwell himself consistently succeeds.
ETA: Given the downvote, maybe I should clarify that I don’t mean that Gladwell succeeds at being the kind of writer that I would want to read. I mean that he consistently succeeds at writing best-selling books. The “igon-value” thing was cringe-inducing, but it plausibly hasn’t done any significant harm to his sales. Apparently, you can be careless in that way and still succeed fantastically, again and again, with his target audience.
So, in that sense, he’s not a good example for the claim that “people who success many times in the row, tend to employ eigenvalues rather than use igon value.” (Though, of course, his existence doesn’t disproves the claim, either.)
Nerds fear getting Malcolm Gladwell book for Christmas (The Daily Mash)
The point is that the consecutively successful investment managers tend to have more clue than unsuccessful ones. Of course, the luck plays a huge role, but over ten years, if we assume that super skilled have success rate of 0.6 and low skilled have success rate of 0.4, there’s 57-fold difference in ‘survival’.
Let me point out that you can make very straightforward Bayesian estimates of performance/skill/alpha by starting with, say, zero-alpha prior and then updating on monthly returns.
Of course, the record is full of people who make money for years, only to explode later on (look at John Meriwether’s career up until Long Term Capital Management blew up so spectacularly). Were these people always just lucky? We can never know. I take Taleb’s point (filtered through Gladwell) to be that the base of people actively trading is so large that we should expect people who are successful for years (possibly even whole careers) even if all that is operating is luck, so past performance is no guarantee of future gains. I don’t entirely agree, but its decent advice to keep in mind. Especially bad for the home investor is constantly chasing the funds that most recently made money (for some definition of recent)- generally the fees went up on the backs of the improved performance, so as performance falls back to the market value the investors will make less (lost to the higher fees).
Also an irony worth pointing out- Randy Mills of Blacklight Power/Hydrino fame has tried to create credibility for his company by pointing to the savvy investors who did get in board.
If the best win at a rate of 60% and worst at a rate of 40% , plenty of the best will explode later on.
The point is that knowing some physics protects you from the likes of Randy Mills. So you do a bit better than mere luck. Also, if you’re a so called savvy investor, and you invest into some crap like hydrinos, you may even get gains (if you sell after others jump onto the bandwagon just because you did).