Trivially true to the extent that you are about equally likely to observe a thing throughout that timespan; and the Lindy Effect is at least regularly talked of.
But there are classes of observations for which this is systematically wrong: for example, most people who see a ship part-way through a voyage will do so while it’s either departing or arriving in port. Investment schemes are just such a class, because markets are usually up to the task of consuming alpha and tend to be better when the idea is widely known—even Buffett’s returns have oscillated around the index over the last few years!
Another reason investment schemes are an exception is because they grow exponentially. This probably means you are much more likely to see them at their peak than at a random time.
Yeah, one has to correct, when possible, for likelihood of observing a particular part of the lifetime of the trend. Though absent any further information our probability distribution should arguably be even. Which does suggest there is indeed a sort of “straight rule” of induction when extrapolating trends, as the scientist in the dialogue suspected. It is just that it serves as a weak prior that is easily changed by additional information.
Trivially true to the extent that you are about equally likely to observe a thing throughout that timespan; and the Lindy Effect is at least regularly talked of.
But there are classes of observations for which this is systematically wrong: for example, most people who see a ship part-way through a voyage will do so while it’s either departing or arriving in port. Investment schemes are just such a class, because markets are usually up to the task of consuming alpha and tend to be better when the idea is widely known—even Buffett’s returns have oscillated around the index over the last few years!
Another reason investment schemes are an exception is because they grow exponentially. This probably means you are much more likely to see them at their peak than at a random time.
Yeah, one has to correct, when possible, for likelihood of observing a particular part of the lifetime of the trend. Though absent any further information our probability distribution should arguably be even. Which does suggest there is indeed a sort of “straight rule” of induction when extrapolating trends, as the scientist in the dialogue suspected. It is just that it serves as a weak prior that is easily changed by additional information.