I don’t know what you mean by “inferred empirically.” If you mean “statistical inference,” there are tons of unstated assumptions that basically assume the observed object is benign or indifferent. There is work in machine learning on learning in adversarial settings, but it’s a much harder problem. Markets are super adversarial, and in addition there are incentives against publishing sensible analyses (why give away money to hostile/competing interests?)
edit: Sorry, I should say “tons of assumptions.” People state them, and it’s clear they are benign, e.g. samples are i.i.d.
How interesting! I’ve seen work on game theoretic optimal poker playing. I can only imagine how sophisticated the market versions would be. Looking forward to seeing a wikipedia page on the topic one day :)
Nature changes too. In both cases I believe there are identified causal determinants of both market and natural behaviour and in both cases these can change over time. Still, the scientific process can be meta-inducted in the case of markets to identify whether, for instance, financial news or academic papers give useful tips and in what circumstances.
In fact, now I’m really curious to know about literature on that very topic.
Why isn’t there empirical evidence in the Wikipedia article on investment strategy? Are the hypothesises financial engineers make unscientific?
Markets are not like Nature, they are much more adversarial.
Even if they are better modeled by game theoretic processes, surely that could still be inferred empirically?
I don’t know what you mean by “inferred empirically.” If you mean “statistical inference,” there are tons of unstated assumptions that basically assume the observed object is benign or indifferent. There is work in machine learning on learning in adversarial settings, but it’s a much harder problem. Markets are super adversarial, and in addition there are incentives against publishing sensible analyses (why give away money to hostile/competing interests?)
edit: Sorry, I should say “tons of assumptions.” People state them, and it’s clear they are benign, e.g. samples are i.i.d.
How interesting! I’ve seen work on game theoretic optimal poker playing. I can only imagine how sophisticated the market versions would be. Looking forward to seeing a wikipedia page on the topic one day :)
Poker is a game with known rules. In investing the rules are not known in the same way. Nassim Taleb calls equating the two the ludic fallacy.
Who?
Nassim Nicholas Taleb, author of the somewhat well-known book “The Black Swan”. Former (successful) trader and (not so successful) hedge fund manager.
Interesting!
Depends on your definition of “scientific”.
Markets change. What used to be true ten years ago might not be true now.
In this case it seems to mean “What Wikipedia considers scientific enough to back up a claim”.
Nature changes too. In both cases I believe there are identified causal determinants of both market and natural behaviour and in both cases these can change over time. Still, the scientific process can be meta-inducted in the case of markets to identify whether, for instance, financial news or academic papers give useful tips and in what circumstances.
In fact, now I’m really curious to know about literature on that very topic.