To be 50% sure you’re in the top 1%, you only need 200:1 evidence. This seemingly large odds ratio might be easy to get.
Of course it’s easy! You just compare how much you’ve made, and how long you’ve stayed solvent, against the top 1% of traders. If you’ve already done just as well as the others, you’d in the top 1%. Otherwise, you aren’t.
It’s much harder to become a top 1% trader. That’s the point of the EMH and Eliezer’s Inadequate Equilibria. Actually, some forms of the EMH go further and say that there’s no such thing as a “top trader,” because there are only two types: the lucky and the insolvent. There is no way to beat the market trading on publicly available information.
Of course it’s easy! You just compare how much you’ve made, and how long you’ve stayed solvent, against the top 1% of traders. If you’ve already done just as well as the others, you’d in the top 1%. Otherwise, you aren’t.
There’s a fair amount of debate over how much data you need to evaluate whether a person is a consistently good trader, in my moderately-informed opinion a trader who does well over 2 years is significantly more likely to be lucky than skilled.
I think the point is that you could become confident of this before spending a lot of time/money on the market, if there are other strong forms of evidence correlated with market success.
It’s a very different project to determine whether you presently are at the top 1% of any domain, and what your chances are of entering the top 1% given a certain level of time, effort, and expense.
Of course it’s easy! You just compare how much you’ve made, and how long you’ve stayed solvent, against the top 1% of traders. If you’ve already done just as well as the others, you’d in the top 1%. Otherwise, you aren’t.
It’s much harder to become a top 1% trader. That’s the point of the EMH and Eliezer’s Inadequate Equilibria. Actually, some forms of the EMH go further and say that there’s no such thing as a “top trader,” because there are only two types: the lucky and the insolvent. There is no way to beat the market trading on publicly available information.
This object-level example is actually harder than it appears, performance of a fund or trader in one time period generally has very low correlation to the next, e.g. see this paper: https://www.researchgate.net/profile/David-Smith-256/publication/317605916_Evaluating_Hedge_Fund_Performance/links/5942df6faca2722db499cbce/Evaluating-Hedge-Fund-Performance.pdf
There’s a fair amount of debate over how much data you need to evaluate whether a person is a consistently good trader, in my moderately-informed opinion a trader who does well over 2 years is significantly more likely to be lucky than skilled.
That’s why I said “how long you’ve stayed solvent.” Thanks for bringing in a more nuanced statement of the argument + source.
I think the point is that you could become confident of this before spending a lot of time/money on the market, if there are other strong forms of evidence correlated with market success.
It’s a very different project to determine whether you presently are at the top 1% of any domain, and what your chances are of entering the top 1% given a certain level of time, effort, and expense.