3 ms·
Ok, humor me here, you guys are certainly smarter than I am. This would be based on a flawed assumption that history is a good indicator of future performance.
by mszcz 6y ago
Ok, humor me here, you guys are certainly smarter than I am.
This would be based on a flawed assumption that history is a good indicator of future performance. I choose an entry point into Bitcoin somewhere in the last 12 to 5 years. From that point on, 5 years later, the price is always ahead. Those pairs as you said are not independent. How does that matter here?
Edit: And why would that make a bad observation or a bad strategy?
- drdeca 6y agoI think what we are saying is mostly just talking about how strong the evidence (how it has gone) is, for the outcome that it will be like that in the future. I don't think I'm "clearly smarter", I just happen to have taken a class that said a little about stochastic processes, which I think are neat, and therefore jumped at a chance to try to apply it a little bit. I don't have any deep understanding of investment. (contravariant might though, idk.)
- contravariant 6y agoIt's not necessarily a bad observation but if you look at a lot of dependent observations then you can't simply count the number of observations. I mean sure 'it has never decreased' is slightly stronger than just the fact that it increased over 2 independent 5 year time periods, but that's mostly because 'it has increased' is a pretty weak observation. The information it adds is that it must have increased quite a bit, which you already knew. So rather than a bad observation it just doesn't tell you much, hence my tongue in cheek observation that they're basing decisions on the basis that it has happened 'twice'.