A prediction is wrong only if it costs you something.
A prediction is right only if it makes you something.
The rest is tawk.
#skininthegame.
A prediction is right only if it makes you something.
The rest is tawk.
#skininthegame.
2) In other words, the predictions that matter are those with a large payoff and little costs.
If you predict what other people are predicting, you get nothing (but a nice paper track record). Monoculture works for blabbering academics, not traders & people in the real world.
If you predict what other people are predicting, you get nothing (but a nice paper track record). Monoculture works for blabbering academics, not traders & people in the real world.
For instance, for a linear payoff, if you predict an event priced at 1% probability, you can be wrong 99% of the time.
For the same probability w/ a convex payoff, you can be wrong 999 times out of 1000 and still do very well.
For the same probability w/ a convex payoff, you can be wrong 999 times out of 1000 and still do very well.
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