Slashdot Mirror
Scientists Develop Financial Turing Test
KentuckyFC writes writes to share a new online test that is being touted as the "financial Turing test." The web-based exercise asks users to distinguish between real and randomly generated financial data. "Various economists argue that the efficiency of a market ought to be clearly evident in the returns it produces. They say that the more efficient it is, the more random its returns will be and a perfect market should be completely random. That would appear to give the lie to the widespread belief that humans are unable to tell the difference between financial market returns and, say, a sequence of coin tosses. However, there is good evidence that financial markets are not random (although they do not appear to be predictable either). Now a group of scientists have developed a financial Turing test to find out whether humans can distinguish real financial data from the same data randomly rearranged. Anybody can take the test and the results indicate that humans are actually rather good at this kind of pattern recognition."
pi?
It means it follows a recognisable pattern, that can be distinguished from random data after the fact but not predicted in advance.
The test is to distinguish computer-generated graphs from the actual stock prices.
It seems to have very little to do with the actual Turing test.
I clicked the link. Instead of a "Financial Turing Test", it looks more like a "Slashdot My Website In Seconds Test".
The market is also inefficient when any participant with more resources uses some of those resources to change the rules of the market to favor that participant.
For example, the same movie sells in china for 2.49 and in america for 19.99 (often with an english soundtrack for both). In an efficient market, the movie would be purchased there for 2.49 and sold here for 4.99 making a 100% profit for someone. But artificial rules restrict this.
For example, drugs which are out of patent are sold in India and China for 10 cents a pill but for 33 cents a pill in the united states (example- metformin) and those in patent are sold for about 10 to 50 cents a pill in india and china and for 5.00 a pill in the united states. (and apparently viagra is much cheaper in canada than the u.s.). In an efficient market those pills would be purchased, imported, and resold. But artificial laws prevent this rational activity.
For example, Microsoft absolutely slaughtered many competitors through illegal monopolistic behaviors (for which it lost many court cases years after the competitors were dead or crippled). In an efficient market, there would have been other options.
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
Dude, it is the year 2010. Everybody knows by now that financial data does not follow a random walk (coin tossing). Stock market variations hat a "fat tail". Unfortunately it is hard to put thins into option pricing (problems with variance). This is actually a reason why far out of the money options are likely to be underpriced. I think Mandelbrot came up with this decades ago. Welcome to the real world. I heard more interesting things. Like the Peruvian who did not clone sheep but bacteria. Yea, that's right.
These instances are decidedly not random but tied to the facts of the underlying business and since news is usually released in quarterly calls and SEC filings, there will have to be large one-time corrections rather than random-looking up and down movements over time that trend toward the final price.
Bottles.
Or, because of the large demand, the marginal costs of producing extra pills approaches 0, thereby allowing them to sell pills at a cheaper price and maintain their profit margins.
Then why don't you answer the question. These are digits of pi ... which is the next digit ?
46457
You say it's predictable, great. Predict it.
I do think we all agree it's not random.