Posts filed under “Bad Math”

Cullen Roche vs Andrew Smithers on Tobin’s Q

I love this debate between the idea of Tobin’s Q-Ratio as th be all for valuation analysis. It is embodied between Smithers & Co. quoted in this scary BBRG article and Pragmatic Capitalism’s Cullen Roche.

Here is PragCap:

“Better yet, look at the number of times this ratio has been cited during the most recent bull market as a reason to exit stocks:

At least he is consistent!

Let me remind readers of the folly of Single Variable Analysis . . .



Single vs. Multiple Variable Analysis in Market Forecasts (TBP, May 4th, 2005)

When Correlations Lie (Bloomberg View June 27, 2014)



Category: Bad Math, Data Analysis, Investing, Valuation

Death Tax, Paying for What You Use, Comment Foolishness

There was some pushback on yesterday’s rather tame suggestion that the U.S. properly finance the fund that pays to maintain and repair our roads. Much of the correspondence was surprising. Then again, I am continually flabbergasted by the cognitive errors that the human brain can make. It’s a marvelously designed piece of wetware that does a…Read More

Category: Bad Math, Politics, Taxes and Policy, Weblogs

Probability, Mean Reversion and Forecasting

We’re down to the Final Four in this year’s iteration of March Madness, also known as the national collegiate basketball tournament. Our earlier discussion of “The March Madness Theory of Investing“ didn’t sit well with some readers. The lessons we sussed out from the bracket-destroying results included home-country bias, how expert forecasts are about as good as those…Read More

Category: Apprenticed Investor, Bad Math, Psychology, Sports

Dilbert: Beating the Average

Source: Dilbert

Category: Bad Math, Cognitive Foibles, Humor, Investing


As one of those folks who has spent a lot of time bashing economic and stock-market forecasters (see this, this, and this), I have no choice but to take issue with an argument made by former hedge-fund manager Jesse Felder, who asserts “that everything is a forecast.” To quote Felder: Can we please stop bashing forecasters already? There is a…Read More

Category: Asset Allocation, Bad Math, Investing, Mathematics

The Amazing Disconnect Between Hedge Fund Performance & AUM

Earlier this week, Greg Zuckerman of the Wall Street Journal pointed out one of the great mysteries of today’s investment landscape: Despite underperforming by a substantial margin, hedge funds keep attracting more investors and assets under management. It is almost as if (to borrow the headline on Zuckerman’s article), “Hedge Funds Keep Winning Despite Losing.”…Read More

Category: Asset Allocation, Bad Math, Hedge Funds, Investing, Psychology

The Odds of Dying in America

Source: The Economist     Previously: You Are Worrying About the Wrong Things (October 22nd, 2014) You Are More Likely to Be Killed By Boring, Mundane Things than Terrorism (May 20th, 2014)

Category: Bad Math, Data Analysis, Digital Media, Mathematics

Don’t Play Probalities Like the Seahawks in Investing

Last week, I was in Seattle for an event sponsored by the CFA Institute. The trip was booked long before any of us knew the Seahawks were going to defend their championship title in Super Bowl XLIX. Following the Seahawks’ amazing comeback in the NFC Championship versus the Green Bay Packers on Jan. 18, the city…Read More

Category: Bad Math, Investing, Really, really bad calls, Sports

Job Recovery All Oil & Fracking ? Hardly

  “All of the job growth from 2007 to today can easily be attributed to the shale oil fracking situation and the oil Renaissance. If you take Texas and North Dakota out of the data series for job employment, what you see is that we haven’t added any jobs in the United States other than…Read More

Category: Bad Math, Data Analysis, Employment, Energy, Really, really bad calls

As goes early-January, so goes Nothing

Salil Mehta is a popular statistician and risk strategist, who has developed a unique method to teach quantitative techniques. He blogs at Statistical Ideas. ~~~ We’ve started the year with a sizable downward market pattern, which is making market participants think in ill-advised ways.  Eight of the first eleven trading days (S&P 500) were negative.  If…Read More

Category: Bad Math, Data Analysis, Markets