Roughly Right or Precisely Wrong
A Wealth of Common Sense
MAY 14, 2023
I have a love-hate relationship with historical market data. On the one hand, since we can’t predict the future, calculating probabilities from the past in the context of the present situation is our only hope when it comes to setting expectations for financial markets. On the other hand, an overemphasis on historical data can lead to overconfidence if makes you believe that backtests can be treated as gospel.
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