3 ms·

If you could consistently predict stock moves 51% of the time eventually you’d have all the money in the universe.

sokoloff 5y ago
It depends on what you mean by 51% of the time. If you’re just making a directional prediction, “will the next market day be up or down?”, that’s nowhere near enough. A little over 53% of days are up (green) days and yet you can’t use that 3x edge over a 51% predictor to make all the money.
- ajuc 5y ago
  Try "will the X go up or down next second". > A little over 53% of days are up (green) days and yet you can’t use that 3x edge over a 51% predictor to make all the money. You can make money, just not ALL the money. And that's because other people know that too.
  - sokoloff 5y ago
    I don’t have access to tick-by-tick feeds any more to test this, but I’d predict that “X will go up or down next second, [ignoring UNCHs]?” is predicted more than 51% of the time by predicting the same trend as the current/previous second and that you’re going to win on percentage of guesses and lose on money (because the changes in direction seconds [where your guess is wrong] are higher vol than the trend continuation seconds).
    - ajuc 5y ago
      Again the difference is that everybody (who cares enough) know about the trends, but only you know about the 51% predictions. Assuming these information sources are independent - even if the trends predicted the market in 99% and your prediction was only 51% - you can still combine them to get a better estimate than the generally known one.
gs17 5y ago
Fair point, maybe it applies more to categories like dowsing, where doing marginally better than chance (or general unaided human ability to detect whatever) would have huge implications, but might not be profitable to employ when compared to modern technological methods, and definitely doesn't allow for easy reinvestment. Who wants to rely on a dowser who is wrong often and can't explain why when you could have a geological survey done that's more reliable and explainable?
- hooande 5y ago
  what's the point in a dowser that's wrong often? isn't that like having a "slightly better than chance" super power? ie, can't fly but can jump higher than average (some times)
  - NateEag 5y ago
    Yes, exactly. Just because something isn't particularly useful doesn't mean it cannot exist.

It depends on what you mean by 51% of the time. If you’re just making a directional prediction, “will the next market day be up or down?”, that’s nowhere near enough. A little over 53% of days are up (green) days and yet you can’t use that 3x edge over a 51% predictor to make all the money.

ajuc 5y ago
Try "will the X go up or down next second". > A little over 53% of days are up (green) days and yet you can’t use that 3x edge over a 51% predictor to make all the money. You can make money, just not ALL the money. And that's because other people know that too.
- sokoloff 5y ago
  I don’t have access to tick-by-tick feeds any more to test this, but I’d predict that “X will go up or down next second, [ignoring UNCHs]?” is predicted more than 51% of the time by predicting the same trend as the current/previous second and that you’re going to win on percentage of guesses and lose on money (because the changes in direction seconds [where your guess is wrong] are higher vol than the trend continuation seconds).
  - ajuc 5y ago
    Again the difference is that everybody (who cares enough) know about the trends, but only you know about the 51% predictions. Assuming these information sources are independent - even if the trends predicted the market in 99% and your prediction was only 51% - you can still combine them to get a better estimate than the generally known one.

gs17 5y ago

Fair point, maybe it applies more to categories like dowsing, where doing marginally better than chance (or general unaided human ability to detect whatever) would have huge implications, but might not be profitable to employ when compared to modern technological methods, and definitely doesn't allow for easy reinvestment. Who wants to rely on a dowser who is wrong often and can't explain why when you could have a geological survey done that's more reliable and explainable?

hooande 5y ago
what's the point in a dowser that's wrong often? isn't that like having a "slightly better than chance" super power? ie, can't fly but can jump higher than average (some times)
- NateEag 5y ago
  Yes, exactly. Just because something isn't particularly useful doesn't mean it cannot exist.