Re: OT: interesting global warming quote found elsewhwere

On Sun, 03 Aug 2008 21:57:15 -0400, John Popelish <jpopelish@xxxxxxxx>
wrote:

Eeyore wrote:

John Popelish wrote:

You just summed up the fallacy that the book, "The Black
Swan" is all about.

Can you elaborate ?

I'll try. The book is all about how we pretend to be able
to predict the future based on inductive logic
(extrapolating from past experience), and how this falls
down in the presence of rare exceptions or "black swans"
(with rare being defined as outside recent memory or
education). It doesn't explain how to predict the
unpredictable, but how to avoid being a sucker by mistakenly
thinking you have predicted (quantified) risk but have not.

One of the common ways that people fool themselves into
thinking they have a grasp of future risk is to model the
past as a Gaussian process. But many processes, including
the stock market and business in general (the big exception
being gambling casinos), are more chaotic, or Mandelbrotian
rather than Gaussian. But you can perform Gaussian modeling
on long stretches of Mandelbrotian data between the
explosive exception parts and it looks like a good fit...
until the next blow up happens.


Experience is the worst teacher.

John

.

Relevant Pages

  • Re: OT: interesting global warming quote found elsewhwere
    ... Swan" is all about. ... past as a Gaussian process. ... on long stretches of Mandelbrotian data between the ... explosive exception parts and it looks like a good fit... ...
    (sci.electronics.design)
  • Re: OT: interesting global warming quote found elsewhwere
    ... Swan" is all about. ... But many processes, including the stock market and business in general (the big exception being gambling casinos), are more chaotic, or Mandelbrotian rather than Gaussian. ... But you can perform Gaussian modeling on long stretches of Mandelbrotian data between the explosive exception parts and it looks like a good fit... ...
    (sci.electronics.design)
  • Re: OT: interesting global warming quote found elsewhwere
    ... Swan" is all about. ... past as a Gaussian process. ... I thought the stock market WAS a casino anyway. ...
    (sci.electronics.design)
  • Re: OT: interesting global warming quote found elsewhwere
    ... (extrapolating from past experience), and how this falls ... down in the presence of rare exceptions or "black swans" ... past as a Gaussian process. ... explosive exception parts and it looks like a good fit... ...
    (sci.electronics.design)
  • Re: OT: interesting global warming quote found elsewhwere
    ... (extrapolating from past experience), and how this falls ... down in the presence of rare exceptions or "black swans" ... past as a Gaussian process. ... explosive exception parts and it looks like a good fit... ...
    (sci.electronics.design)