From Sujit on trading
- not necessary to get numbers further back than six months
- stock market subjected to fractal distribution
- it is possible to generate returns of up to 140% per year by trading on stocks that are moving within a range
- going all in on each position each time leads to a very low Sharpe ratio
- Sharpe ratio should be calculated separately for method and for SnP benchmarked against US treasury interest rates. The difference is the actual returns
On Rambo Last blood
A movie is a reflection of the culture and attitude of an age. Rambo was a very popular cultural icon during the eighties and the early nineties when memories of the Second World War and the Cold War against the communist were still very fresh in the minds of the people in America.
If you looked at the world today through the eyes of someone like Rambo, you would have been able to easily draw facts to back the narrative painted by Trump prior to being elected president.
When operating in an environment of uncertainty, a decision maker formulates multiple often competing narratives in the head that best explains majority of the facts presented. He calibrates the weightage assigned to the probability of each narrative as new pieces of data become available. He simultaneously utilizes multiple ones that are assigned high plausibility in his decision making to strive for the best possible expected outcome . It is a cognitively demanding iterative activity that goes on indefinitely.
- common themes between movie and Trump’s narrative
- Mexico drug cartels
- Mexico prostitution rings
- The world is a dark place
- illegal border crossing
- poor border fence
- white male
- Rust belt
- Protagonist is in his 70s
- Freedom fighter who fought the communist in Vietnam and Russia
- guns and lots of blood
- man of steel
- manifest destiny
- Cognitive biases
- Narrative fallacy
- Framing bias
- selective bias
Related readings
- Expert political judgement, Philip Tetlock