3 ms·

interesting.. how would it explain bridgewater / ray dalio's track record etc?

• papercrane 4y ago
  Even in a purely random model you'd have outliers that over the long term outperformed the market. You'd just expect that to be very rare.
• PaulDavisThe1st 4y ago
  the classic reply: consider a stock picker who starts with 256 people, tells 128 of them that next week Tesla will go up and Twitter will go down. Whichever happens, take that 128 strong cohort, tell half of them that the next week, Ford goes up and Chrysler goes down. Etc. repeat for 8 weeks. At the end, the stock picker has a true believer: someone who thinks they saw the stock picker successfully "know" for 8 weeks in a row which stocks would go up. Change the numbers around a bit, don't run until the true believer pool size is one, and you've got ... the real world.