Four Problems with the Sharpe Ratio
The Sharpe Ratio, named after William Forsyth Sharpe, measures the excess return per unit of deviation in an investment asset…
R&D Blog
Daniel Kahneman: Thinking, Fast and Slow (Video)
Daniel Kahneman (March 5, 1934) is an Israeli-American psychologist. He was awarded the Nobel Memorial Prize in Economic Sciences for…
Karl Popper on the Problem of Induction
Karl Popper – The Logic of Scientific Discovery, 1934: Now it is far from obvious, from a logical point of view,…
Cognitive Biases: Denial of Gambling Addiction
Short-term trading is highly addictive. The following twenty questions are provided by Gamblers Anonymous®. Most compulsive gamblers will answer ‘Yes’…
Judgment under Uncertainty: A. Tversky, D. Kahneman
Misconceptions of chance: People expect that a sequence of events generated by a random process will represent the essential characteristics of that…
Pattern Recognition: Picasso, Dali, Breton.
Viewers see what they want to see. The image No. 1 is a photograph of African villagers in front of a hut….
The Adaptive Markets Hypothesis: A. W. Lo
Andrew W. Lo: Based on evolutionary principles, the Adaptive Markets Hypothesis (AMH) implies that the degree of market efficiency is…
Fractals and Roughness: B. Mandelbrot (Video)
I. Profile Studying complex dynamics in the 1970s, Benoit Mandelbrot had a key insight about a particular set of mathematical objects: that…