Saturday, January 02, 2010
["Investors should be skeptical of history-based models. Constructed by a nerdy-sounding priesthood using esoteric terms such as beta, gamma, sigma and the like, these models tend to look impressive. Too often, though, investors forget to examine the assumptions behind the symbols. Our advice: Beware of geeks bearing formulas."]
[Also blissfully ignored, he wrote, were the perils of relying on mathematical models devised without worst-case situations in mind. Too often, he wrote, Americans have been enamoured of "a nerdy-sounding priesthood, using esoteric terms such as beta, gamma, sigma and the like".
Some scepticism about these models is overdue, he added. "Our advice: beware of geeks bearing formulas." Home » Business » Article