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  • Mathemaical Errors in Financial Commentary 0 comments
    May 28, 2009 5:53 PM

    I've seen a lot of these on Seeking Alpha recently, so I thought I'd start keeping track.  One common theme that was repeated twice this week is the use of a black swan event to build a case for some hypothesis or other.

    Typically it takes the form of "in 1928 the stock market had a value of 241. In 1954 the stock market also had a value of 241". This proves that the only really useful investment is (one of) bonds, bullion, real estate, etc.

    Of course it proves no such thing other than if you pick your data on an ad-hoc basis you can prove anything you want to.



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