Comments on: The Renaissance common-sense test http://blogs.reuters.com/felix-salmon/2010/06/14/the-renaissance-common-sense-test/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: slocklin http://blogs.reuters.com/felix-salmon/2010/06/14/the-renaissance-common-sense-test/comment-page-1/#comment-16077 Tue, 22 Jun 2010 00:31:33 +0000 http://blogs.reuters.com/felix-salmon/?p=4249#comment-16077 The Economist, amusingly, is saying the reason RenTech succeeded so wildly is because … they don’t obey any common sense rules, and do, in fact data mine to their heart’s content. We all know those crazy physicists and astronomers are big on mindlessly using false correlates.

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By: Danny_Black http://blogs.reuters.com/felix-salmon/2010/06/14/the-renaissance-common-sense-test/comment-page-1/#comment-15893 Tue, 15 Jun 2010 14:17:29 +0000 http://blogs.reuters.com/felix-salmon/?p=4249#comment-15893 MattF, first thing you do is try and identify the mismatch between your gut and model and why they are disagreeing. Second is to see what your gut says and what the model says vs the real-life. If one disagrees with the data then it is wrong. Most of the time the disagreement boils down to some market microstructure that you forgot to model – ie tax or regulatory differences or liquidity assumptions. Of course alot of the time it is not that clear cut in that case you need to use your experience and skill to make the decision….

The main that was interesting for me was the focus on not losing money – which sounds like an obvious statement. But most people don’t focus on this, they focus on MAKING money. Fact is that if you made market rate during the boom years and zero losses in the down years you are over time going to have pretty decent performance.

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By: HBC http://blogs.reuters.com/felix-salmon/2010/06/14/the-renaissance-common-sense-test/comment-page-1/#comment-15876 Mon, 14 Jun 2010 21:29:35 +0000 http://blogs.reuters.com/felix-salmon/?p=4249#comment-15876 The broadest way of putting it might be, when it works, to go “I meant to do that.” When it doesn’t, blame Europe.

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By: MattF http://blogs.reuters.com/felix-salmon/2010/06/14/the-renaissance-common-sense-test/comment-page-1/#comment-15853 Mon, 14 Jun 2010 14:49:04 +0000 http://blogs.reuters.com/felix-salmon/?p=4249#comment-15853 This is not particularly revealing– you need to see how it all unpacks in-real-life. So, suppose the model says ‘X’ but your gut says something else. Do you 1)ignore the model?, 2) ‘fix’ the model?, 3) follow the model? 4) rephrase the question? 5) change the subject?

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By: guanix http://blogs.reuters.com/felix-salmon/2010/06/14/the-renaissance-common-sense-test/comment-page-1/#comment-15851 Mon, 14 Jun 2010 14:16:24 +0000 http://blogs.reuters.com/felix-salmon/?p=4249#comment-15851 Another useful step might be to work out why the strategy would continue to work in the future.

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