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  • #16




    Kind of funny to see an argument against an on point event when the main premise of my response was about fat tails and Black Swans. Not to quibble, but a well researched post-mortem analysis of the facts and circumstances of LTCM’s demise is not an anecdote. It is ironic that you are disputing my basic premise with an analogy which never have any probative value.

    I will state again, no matter how smart the people are, any model of of a chaotic system has a significant risk of fat tails and Black Swans.
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    Thats why you have position sizing, etc...Those guys just got over leveraged, over confident and greedy. Unless the probability of an event was zero they were going to blow up. Get as leveraged as they were and it doesnt even have to be a grey swan, just a normal bad day.

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    • #17




      Kind of funny to see an argument against an on point event when the main premise of my response was about fat tails and Black Swans. Not to quibble, but a well researched post-mortem analysis of the facts and circumstances of LTCM’s demise is not an anecdote. It is ironic that you are disputing my basic premise with an analogy which never have any probative value.

      I will state again, no matter how smart the people are, any model of of a chaotic system has a significant risk of fat tails and Black Swans.
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      Yeah, I have read the book and am familiar with LTCM.  They messed up.  An analysis of LTCM is useful, but not in a generalizing way to diminish the value of advanced degrees in statistical fields relevant to stochastic modeling.

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      • #18
        I am not diminishing the value of advanced degrees at all. Quite the contrary. What I am saying is that in spite of advanced degrees, predictive models of chaotic systems are tenuous at best. They are only as good as their model and unlike weather forecasting, the human component is the big wild card in economic and securities market forecasting.

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        • #19




          I am not diminishing the value of advanced degrees at all. Quite the contrary. What I am saying is that in spite of advanced degrees, predictive models of chaotic systems are tenuous at best. They are only as good as their model and unlike weather forecasting, the human component is the big wild card in economic and securities market forecasting.
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          Our ability to predict all of these things is improving, and it is the PhDs who are often at the leading edge of this.

          The earlier poster's comment that started this is right.  Having PhD resumes in relevant fields from people working on OP's site would lend credibility to the work.  Having a PhD is an indicator of (i) general intelligence and (ii) specific knowledge of a subject.  If I saw some resumes with advanced degrees or other useful background on the website, I would be more inclined to have a look rather than stick with my current assumption that the website will lack any new or useful insight.  In this regard, the failures of LTCM and their leadership are not relevant.

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          • #20




            The chance of this working is very small.  If it worked so well then every investment site could set this up to auto do it.  You dont need a PhD.  You dont even need to understand how it works.  Someone else programs the computer.

             

            When these things dont work the person (similar to the OP) will make the claim that political influences or whatever made it not work so not their fault.

             

            What good is any of it if it isnt real world.  There are always going to be outside influences.

             

            All of this is just fancy market timing.  Sure somebody is the next WB or whatever but not possible to identify that person ahead of time.
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            I think even if you get it to work brilliantly to foresee recessions with excellent accuracy, your ability to make money off this knowledge would still be incredibly limited.

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