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Thread: Horrible article by hack about nonexistent "star traders"

  1. #1
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    Default Horrible article by hack about nonexistent "star traders"

    There is a myth that "superstar traders" are a real thing.

    This is literally as sensible as handing over power of a large corporation to a drunk plumber who won the Euromillions because, hey, he couldn't have got all those millions without picking those numbers very wisely.

    Have superstar traders lost their magic? | Business | The Observer

    The word "luck" or "random" does not appear in this piece of rubbish. But the word "magic" does.

    In reality, all traders, the successful and the rest, are simply lucky. Take 10,000 monkeys and get them to pick stocks. Half will pick well, half won't. Eliminate the 5000 who failed and go again. You're left with 2500 who won twice in a row. Go again. Eliminate the 1250 who failed. You're left with 675 who won 3 times in a row. Go again. Eliminate the 1250 who failed. You're left with 675 who won 3 times in a row. Go again. Eliminate the 337 who failed. You're left with 675 who won 4 times in a row. Go again. Eliminate the 169 who failed. You're left with 168 who won 5 times in a row. Go again. Eliminate the 84 who failed. You're left with 42 who won 6 times in a row. Go again. Eliminate the 21 who failed. You're left with 21 who won 7 times in a row. Go again. Eliminate the 10 who failed. You're left with 11 who won 7 times in a row. Go again. Eliminate the 5 who failed. You're left with 6 who won 8 times in a row. Go again. Eliminate the 3 who failed. You're left with 3 who won 9 times in a row. Go again. Eliminate the 2 who failed. You're left with 1 who won 10 times in a row.

    Congratulations, you've got your "star trader" monkey.

    It's been known since the 1970s that this is exactly the process by which "star traders" come into being, in humans. Traders who have a losing run early in their careers are simply ejected from the post, meaning the lucky survivors stay in the running despite having no real skills that the ex-traders didn't also have.

    There's a book about this mentioned, not in the text, but in the comments section, called "Fooled by randomness" about exactly this problem: the innate human disability when it comes to recognising the role of random chance in the world.

    Shame on Simon Neville for this pathetic piece of fluffing.
    When you see the words "Mises" or "Hayek" in someone's post, just ask yourself: do I really want to ban paper money and go back to gold?

    You have to pity the kind of people who buy into conspiracy theories. I find the following to be the saddest words on the internet: "Re: connection between Bilderberg puppet lady gaga and viral outbreak in ukraine "

  2. #2
    Dylan2010
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    Taleb's book Fooled by Randomness has a similar conclusion, goes into the idea of survivor bias

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