Signal and noise

Just added this to my Amazon wish list: “The Signal and the Noise: The Art and Science of Prediction”

http://is.gd/O7KImv

Part of a review I say on Amazon:

The book presents real-world experience and critical reflection on what happens to research in social contexts. Data-driven models with inadequate theory can lead to terrible inferences. For example, on p. 162: “What happens in systems with noisy data and underdeveloped theory – like earthquake prediction and parts of economic and political science – is a two-step process. First, people start to mistake the noise for a signal. Second, this noise pollutes journals, blogs, and news accounts with false alarms, undermining good science and setting back our ability to understand how the system really works.” This is the kind of insight that every good practitioner acquires through hard-won battles, and continues to wrestle every day both in doing work and in communicating it to others.

I think it will be very useful for investing.

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About mcturra2000

Computer programmer living in Scotland.
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