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> How should the analyst write his model in a simple way? As a Java (or Haskell, or whatever firs your ideal of simplicity) program? In Python or R, like the r
by jnbiche 10y ago
> How should the analyst write his model in a simple way? As a Java (or Haskell, or whatever firs your ideal of simplicity) program?
In Python or R, like the rest of us do. Or SAS, Stata, or even SPSS if they want a familiar interface (although using the SPSS GUI instead of its scripting interface will put them at risk of the same kinds of mistakes as Excel is).
Ensuring reproducibility and robustness isn't rocket science, and it doesn't require the obscurity of Haskell or the verbosity of Java to do properly. But it does require learning to script to program their models, instead of relying on GUI (which should be perfectly natural to analysts and their long Excel formulas).
Edit: To be clear, when I say "scripting" here, I mean text-driven programming, as opposed to using a GUI interface (which is rarely robust or reproducible, and certainly isn't in plain Excel).
- kgwgk 10y agoI don't think you know what a financial model is: https://en.m.wikipedia.org/wiki/Financial_modeling#Accounting https://en.m.wikipedia.org/wiki/Financial_modeling#Accountin...
- jnbiche 10y agoWell, I've never worked in finance, but if these are like the mathematical models that I used to make predictions in grad school and for the year after grad school when I worked as a statistical analyst, I do. I presume these are predictive mathematical models, used for forecasting? Why in the world would Python or R be inadequate for that type of work, if that's what you're implying? What do you think they lack that Excel has, other than a friendly GUI interface? Or SAS, Stata, or SPSS (all of whom have versions that they market heavily toward finance).
- kgwgk 10y agoNo, these are not mathematical models used for forecasting. In this context, "financial statement forecasting" means making up financial statements. Something like this: https://mycourses.aalto.fi/pluginfile.php/144740/mod_resource/content/2/20160304_Valuation_Rantapuska_Lecture5.pdf https://mycourses.aalto.fi/pluginfile.php/144740/mod_resourc...