There’s interesting thing: Some people managed to acquire a lot of wealth via trading. That would lead you to believe their claims with regards to the methods they use being effective.
However, if you simulate the stock market with identically skilled agents, you obtain basically same wealth distribution as observed in the real world, with some few agents ending up extremely ‘rich’. One can imagine that such agents, if they were people, would rationalize their undeserved wealth to feel better about themselves.
The problem of the silent cemetery(sample bias?). If we start with a large enough cohort of “equally skilled” traders, who just make their investment by random, we will still end up with a handful of “old foxes” who just standing because of their proportional luck. In the meantime the failed ones laying in the cemetery silently as nobody asks them.
Of course the lucky one’s skills will be rationalized(narrative fallacy in Taleb’s term) and not just by themselves but the majority around them, the media etc..
There’s interesting thing: Some people managed to acquire a lot of wealth via trading. That would lead you to believe their claims with regards to the methods they use being effective.
However, if you simulate the stock market with identically skilled agents, you obtain basically same wealth distribution as observed in the real world, with some few agents ending up extremely ‘rich’. One can imagine that such agents, if they were people, would rationalize their undeserved wealth to feel better about themselves.
The problem of the silent cemetery(sample bias?). If we start with a large enough cohort of “equally skilled” traders, who just make their investment by random, we will still end up with a handful of “old foxes” who just standing because of their proportional luck. In the meantime the failed ones laying in the cemetery silently as nobody asks them.
Of course the lucky one’s skills will be rationalized(narrative fallacy in Taleb’s term) and not just by themselves but the majority around them, the media etc..