Predict Something (Quantifiably)!
I don’t want to go into Christmas on a sour note, so HAPPY HOLIDAYS folks! I’m eternally indebted to you all for your thoughts and time. Having said that, random rant for the day…
I know I don’t make many friends whenever I get on this soap box, but it irks me that financial bloggers don’t make more predictions that can be easily quantified and tracked.
The quant-minded blogosphere (myself included) is very good at churning out gazillions of bits of market data or showing sexy backtests of what worked (past tense).
That’s super duper. That’s the noise we all sift through to find our bits of trading gold and I love it, but it makes it difficult to separate the wheat from the chaff.
As I’ve ranted before, the only way to judge a pundit’s usefulness is based on decisions they made in real-time using the information available at that moment.
And the only want to capture those decisions is if pundits are making frequent, easily quantifiable predictions and then tracking them.
I’m not talking about vague hedged calls that’ll be construed as a win no matter what, and I’m not talking about cherry-picking your winners.
I’m talking about making clear, concise calls that a dollar figure could easily be applied to and then reporting on all of them publicly and in an empirical manner.
In other words, I’m talking about putting your money (or foot) where your mouth is.
Those are frequent, easily quantifiable predictions that represent what this pundit believes to be so. Generally I’m successful. Occasionally I’m horrifically wrong. But the important part is that you know.
Let me repeat that, YOU KNOW.
Good or bad. Guru or imbecile. Love me or hate me. I’m okay with all of them. But at least your decision will be based on some semblance of fact.
How many other pundits can we say that about? That we understand clearly how they would have traded and how all of those trades would have worked out?
The point of this post isn’t to pat myself on the back. The point is to hopefully motivate all of us to expect a little more accountability from our experts (even if that sometimes necessitates more feet in more mouths).
Rant over…and HAPPY HOLIDAYS!
P.S. I would be remiss not to say that some in the quant-minded blogosphere do a very good job at making quantifiable predictions and tracking them empirically. I’m not naming names (because I don’t want to shine the light on folks who aren’t doing such a good job) but you’ll find more than a few of them on my blog roll.
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