Posts Tagged ‘math and finance’

“At the current rate…” and other assumptions

March 30, 2017

In order to make any predictions in any area of study, one must make assumptions about the data, and what is likely to affect it going forward.  That is why statistical studies often make use of such statements as:

“At the current rate…”

“If things continue as in the past…”

“Based on what we know now…”

“It is reasonable to assume…”

“If history is a guide…”

“If things don’t change…”

But things do change, and that is what makes predicting the future so difficult, and so vulnerable to known and unknown biases.  While these caveats are unavoidable, and need to be stated, they require the consumer of the statistics to have a reasonable amount of skepticism and a large amount knowledge.

A quote in a The Great Race by Levi Tillemann states that “The available supply of gasoline, as is well know, is quite limited and it behooves the farseeing men of the motor car industry to look for likely substitutes.”  This quote is attributed to Thomas J. Fay, in 1905, in a magazine call Horseless Age.

When “Big Data” gets it wrong

January 4, 2017

Big Data could provide a big advantage to investors, but when the data is wrong or misinterpreted, it can be catastrophic.

“Credit card data sold to investors is making shares of retailers behave strangely, especially when the data gets things wrong.”  So begins an article in the Wall Street Journal ‘Big Data Adds Up to Trading Distortions.’  The first example is about Tailored Brands (owner of Men’s Warehouse and Joseph A. Bank) stock that shot up nearly 40% in one day when investors realized that the data they were basing their decisions on was inaccurate.

For the full article:  how-credit-card-data-might-be-distorting-retail-stocks-wsj