Re:Investing Is More Luck Than Talent
by timr on Sunday January 22, 2017 @03:29AM
(#13454267)
"What we observe is that the probability of having money m is actually m^(-alpha). Therefore the money is not being exchanged randomly, and the richest agents probably aren't lucky."
No, it means that you're using the wrong model. There are lots of models of "random" behavior. You can't just pick one out because you like it, and conclude that a system isn't "random" because the model you've chosen doesn't fit the data.
The article isn't especially convincing either, but at least they're describing a model that looks somewhat like money, and produces a distribution that matches what's observed in reality. You're describing a model that looks like atoms, and concluding that money isn't random because it doesn't look like atoms.
No, it means that you're using the wrong model. There are lots of models of "random" behavior. You can't just pick one out because you like it, and conclude that a system isn't "random" because the model you've chosen doesn't fit the data.
The article isn't especially convincing either, but at least they're describing a model that looks somewhat like money, and produces a distribution that matches what's observed in reality. You're describing a model that looks like atoms, and concluding that money isn't random because it doesn't look like atoms.