Re: Too Much Information
 

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blueman, can you post an example of me writing long paragraphs to disagree with you when you were right?



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Sure. Pretty much every post you made in this thread

http://forumserver.twoplustwo.com/showfl...rt=all&vc=1

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I made three replies to you in that thread. Two were about moderating decisions (topic of the discussion and a previous ban that you said you agreed with) and one was a link and quote from an external news source (i.e. I cited someone else who disagreed with you).


As for the rest of your post, I don't really get it. A lot of people do the same sort of thing all the time: tell a group of people what big morons they are and then continue to interact with the group. Doesn't make much sense to me, but if it fulfills your desire to make sure everyone thinks you're an idiot then I guess it's working out.

Re: Too Much Information
 

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"Let's say I offer you a bar of gold. You know, for a fact, that it is 100% real gold. I hand you the bar of gold, which is about as big as your phone, but you are not allowed to weigh it or in any other way attempt to determine its mass, volume, etc. Then I tell you that I'll sell you the bar for $50. Now do you care what the hell it's worth?"


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Definition of what makes a great investment...

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I'm not following. Is this sarcastic, serious, something else?

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highly doubt thats sarcasm. you made a great point and DC si agreeing.

good analogy;
gold=stock
easy to value gold and while you acan't determine exactly what it is worth, you know for a fact (given your assumptions) that it is worth well more than $50.

Barron

Re: Too Much Information
 

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Wow, sometimes I guess you really have to spell it out.

HERE WAS THE POINT OF WHAT I SAID

You can tell it worth a lot, and more importantly, a lot more than you're going to have to pay for it. You don't know exactly what it's worth and you could easily be off by 20% or more if someone asked you to fill in the value of the purchase. However, those limitations notwithstanding, it is still an obviously good idea to buy the gold.

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I wasn't being sarcastic. The best investments are easy decisions that don't require lots of data to support them. They are "obvious".

Re: Too Much Information
 

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http://www.vcconfidential.com/2007/0...ch-inform.html

Some of you may have seen this from my shared feed. I thought it was pretty interesting and somewhat counter to the way a lot of people feel about investing. It specifically made me think about someone like Barron, that chooses to use tons of data.

One interesting note is that the author talks about not only investments in small, relatively inefficient markets (venture capital), but also uses Warren Buffett as an example.

Perhaps Homer Simpson was right, "Facts are meaningless. You could use facts to prove anything that's even remotely true!"

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the horse betting study was the best analogy in there and i think taleb used it as well.

what i do, fyi (evan et.al.) is to look at a ton of info and boil it down to the things that really matter to what i'm studying. like a filter.

for instance, when building a trading strategy that generates a signal, you need fo first have a ton of indicators based on economic data that determine that signal. the more info you use in indicators doesn't necessarily create a better system. using 10 indicators for a signal may be just as good or only marginally worse than using 50 or 100...just depends on the thing being created obviously.

the site you've shown does a good job of explaining why an overload of info could be bad and even make you think you're doing a better job than you would be able to do otherwise with less info.

good cite.

Barron

Re: Too Much Information
 

I merely skimmed the blog article, but the discussion here has me confused about the point of the article. Is the author trying to say that more information is distracting? Or is he making a point about the way people convey their analysis to others (i.e. people who sound smart aren't necessarily doing any better)? This discussion in this thread seems to be talking about the latter.

I think some people are misunderstanding the article, but Barron's recent reply seems in line with my understanding. I don't think it's the amount of information you examine or absorb that matters - in fact, at this stage, more is better. Success ultimately seems determined by the investor's ability to filter that information and determine the pieces that are useful/relevant to his or her analysis. Smarter people don't necessarily see more information as noise or a distraction - they are simply better at filtering it and making the intelligent decisions needed to process that information.

FWIW, I don't do any sort of stock analysis (I'm a standard passive index fund investor), but I think there's a subtle distinction between the quantity of information being the culprit of a poor analysis and the individual's ability to process that information as the culprit. I think it has to be the latter.

In conclusion, more is better unless you can't handle it.

Re: Too Much Information
 

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In conclusion, more is better unless you can't handle it.

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I don't think that is a perfect conclusion. It is hard to determine if we are actually able to "handle" new information well. Often times the additional information you are getting seems helpful, but is just noise that can impair your decision making abilities. Once additional information is confirmed as just noise or is only very marginally beneficial, it is worth it to ignore it even if you can "handle it". To take an example from Blink, Dr. Brendan Reilly, the chairman of the Department of Medicine at Cook County Hospital in Chicago, instructed that the diagnosis of heart attacks be boiled down to 4 simple risk factors. The doctors were smart people who could use much additional and seemingly relevant information like if the patient has diabetes, a history of heart attacks, etc. However, once doctors used the simplified decision tree, it improved their ability to identify true heart attack patients by 70%. The key is that many years of evaluating and analyzing the evidence took place before the extra information was deemed as unhelpful.

Re: Too Much Information
 

If you knew for sure that information was "very marginally beneficial," why would you still choose to ignore it?

Re: Too Much Information
 

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If you knew for sure that information was "very marginally beneficial," why would you still choose to ignore it?

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We're nitpicking here, but you might in cases where time is a factor, like when you are making a poker decision or, to use the blink example, diagnosing heart attacks. Also in cases where you are expending an exorbitant amount of resources for very little return, ie. mastering game theory to increase poker winnings or Buffett not having many analysts, etc.