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Strategies & Market Trends : Gorilla and King Portfolio Candidates

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To: tekboy who wrote (32721)10/2/2000 9:16:51 PM
From: Rick  Read Replies (2) of 54805
 
If I test a thousand "strategies" on a sample of historical data, then by definition it's highly likely that a few of them will post amazing results that seem like one-in-a-thousand shots. If I then throw out the rest and say to you "hey, try this one, look how well it did," you are being primed for a sucker bet because there is no real reason to believe the strategy will continue to outperform.


If I throw out all the data that doesn't work with the "good" strategy, that's "data chopping." But if I, instead, just say "this might work" I simply have a hypothesis that needs testing. But unconnected failed strategies shouldn't matter in the least. Is one of the flaws in the Copernican system that fact the Ptolemy looked at the same Solar System and came to the wrong conclusion? When Einstein published his special theory of relativity did someone say "but, Albert, how many theories did you reject?"

- Fred
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