Everybody by now knows that there is no alpha in the funds. Yet fund managers make a good living.
Steven Hsu has an answer:
I think many people are irrationally overconfident. So they think they can pick the one hedgie out of many who actually has alpha, even though they may understand (at the rational level) that most do not. It doesn't help that the hedgies are very good at portraying themselves as having special magic.
Why do admissions people at elite schools think they can predict college performance better than a simple linear combination of SAT + HSGPA? (When in fact the opposite is true.)Why do economists think they can understand/predict the economy when empirically it is clear they cannot?
My son thought he had a way of rolling dice that increases the probability of his desired outcome. I got him to look at the statistics but he's only six, after all ;-)
12 comments:
Why do admissions people at elite schools think they can predict college performance better than a simple linear combination of SAT + HSGPA?
They don't. The problem is that such a combination would produce a class that was mostly Asian males and with almost no black and Hispanic people. The goal of the modern university is not to produce the smartest grads but the most "diverse" .
K
This guy has a positive "glasses sign"; the "temples" (the parts of the frame that go back over the ears) can both be seen at once, in full, from the front. This means they must be divergent, to accommodate his large brain.
This sign gives you a very rough and ready estimate of brain size.
And brain size, as we are all propagandized, means nothing at all.
Anon.
It may also mean that the guy is using undersized glasses.
Or that he is aware of the "sign" and buys small narrow glasses.
I am not suggesting he is microcephalous.
He's probably quite intelligent, and yet he does not "get it". American Jews used to be under the same misapprehension that all that was important was high test scores. After a couple of generations of playing the game, we now understand that colleges are looking for "well rounded" individuals. In some respects this is code for "not too Jewish" (in the past) and "not too Asian (in the present), but it also has some validity. My daughter has very high marks plus she has "a life" - she participates in sports, in social activities, etc. This is a different level of accomplishment from a Chinese overachiever who may not be as intelligent as she is but who has achieved identical grades by drilling 18 hours/ day.
Not long ago I attended my nieces' HS graduation from a prestigious prep school. The valedictorian was a Korean kid. My niece said that, although the school was not large, no one there actually knew the boy because he spent all his time in the library. As valedictorian he was obligated to give a speech and though the speech was well written, the boy was such a black hole of anti-charisma that everyone ignored the delivery and chatted. It was as if the crowd instinctively understood that he was a low testosterone beta to be ignored.
K
No-one else is aware of the sign.
The glasses are not small.
You can tell this from the way they overshoot to the side of the eyes.
There is not much variation in eye width, and the eyes of most people are approximately one eye's width apart. In this way you can roughly calibrate the glasses that people are wearing.
The 'temples' here are clearly diverging, otherwise you would not see the full length of both of them at the same time.
Check it out on a variety of other people, bearing in mind it is approximate.
And, of course, head size is not the only determinant of intelligence.
Anon.
I am not sure size is so important. Eskimo and other polar people tend to have large ball-like heads and large brains, yet long and narrow faced people - like most Englishmen - are also very brainy. I tend to think that long horse-like faces are more attractive.
It is by now pretty much accepted by objective observers that East Asians do in fact have differently shaped skulls from Europeans, more globular, and that they even have slightly bigger brains, on average.
It is also the case that E Asians have a higher mathematical (spatial) ability, but not verbal IQ, than Europeans.
So the issue is, to what use are the extra neurons put in the E Asians, and why did this evolve?
A credible explanation is that they had to have survived Siberia and the vast empty spaces of what is now Eastern Russia and the Steppes, to reach Northern China, Japan and Korea; hence the need for spatial capabilities (to navigate, avoid getting lost, find food, etc).
However, both Europeans and E Asians had to learn how to survive extreme cold, and this probably encouraged deferred gratification, self-control, forward planning, monogamy, and group cohesion, leading to an enlargement of in particular the frontal lobes. So Europeans and E Asians do have something in common as well.
It is estimated that Europeans and E Asians diverged about 40,000 years ago (2000 generations),some 20,000 years after leaving the mothership Africa.
This is plenty of time for these (and several other) sorts of difference to have emerged.
Anon.
At the personal level I am attracted to long - narrow faced girls.
Probably because I like horses.
But at their worse (the English royal family) the British literally look like horses. This is a good look for horses but not for humans.
K
À chacun son goût
De gustibus non est disputandum
K
Horses for courses.
Anon.
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