Slashdot Mirror
World Cup Prediction Failures
pdcull writes "We all read on Slashdot about the investment banks using their massive computer power and clever modeling techniques to predict the FIFA World Cup outcome. Now that Goldman Sachs's, UBS's and Danske Bank's favorite, Brazil, has been eliminated, and with JP Morgan's England long gone, the question that begs to be asked is: can we really trust these guys to predict the financial markets any better than they did World Cup?"
Surely the last couple of years are evidence enough that the financial industry can't predict or manage the markets? We didn't need football to tell us this :D
The problem with slashdot is that most of its users were bullied and stuffed into lockers as kids!
Your question is, "Hey, these guys who spend their entire lives predicting financial markets aren't good at predicting sports. How can we trust them to predict financial markets?"
"Goldman has published an exhaustive list of defences against the allegations that it acted illegally when it allowed hedge fund Paulson & Co to choose some of the sub-prime backed securities to be included in a product it sold to investors even though it knew the hedge fund was betting against them."
The financial giants don't predict the markets, they make them.
A better analogy would be if Goldman Sachs was allowed to pick the players for each team, and put all the worst players into Brazil. Then sell all their customers bets for Brazil to win while simultaneously betting against them.
What's an investiment bank?! I don't trust any large institution that can't spell worth beans.
Slashdot "editors" are not large institutions. They are individuals ultimately responsible for failing to perform the most basic quality checks for submissions, like this mistake that an automated spell-checker would have fixed. Really, even basic proofreading would not have been necessary in this case.
If the "editors" did their jobs in a relatively consistent manner I'd consider purchasing a paid subscription. As it stands, I don't get to be lazy at my job and therefore it would be unjust to reward the way they do theirs. Anyone remember the recent article about Plato in which an "editor" inserted a blatantly false and readily falsified statement about Aristotle? This is not exactly obscure material that would be difficult to verify.
In this job market where multitudes are desperately seeking work, I am sure there are many who would be happy to do better than the current staff.
For those who have no real concern for quality, my response is this: it's not that a spelling error is so terrible or offensive. It isn't. It's that it shows that they don't care. If they don't care enough to correct errors when the effort to do so approaches zero, why should I care? If I have no reason to care, why should I pay money?
I suppose it sounds like I am picking on Slashdot specifically. Really, they are just reflecting what has become a societal norm. That norm is the abandonment of "this is my craft, the satisfaction I get out of it is proportional to what I am willing to put into it, the quality of it matters to me even when no one is looking." That norm is the embracing of "it doesn't matter if I produce substandard and shoddy work as long as someone is willing to consume it."
It is a miracle that curiosity survives formal education. - Einstein
The financial giants don't predict the markets, they make them
Obviously reality still has some bearing on things.
This issue is a bit more complicated than you think.
Economics taking a statistical approach often assumes that in the long run you have a stationary time series. This is why economics and the quants will fail miserably. There is no understanding, or desire to understand, the fundamental foundations of the economic activity. If you take a statisticl approach you have nothing like what Newton, Gallileo and a host of others gave to physics or chemistry. All you can say is, "If the past resembles the future then there is an x probability that y will happen." As opposed to saying given the following forces, then the system will behave a certain way. Non-linearity is another question, but if you do not attempt you understand basic forces then failure is likely even without non-linearity.
For economics to be a science there also must be a way to test hypotheses. To date I haven't seen anything like this. So at best economics is wishful thinking, IMO.
putting the 'B' in LGBTQ+
By having superfast computers on the floor and looking at the orders coming in, they buy and sell just before the orders execute.
This would be like observing a goal was clearly going to occur (or not occur) and then betting a goal would occur (or not occur) in the milliseconds before the goal actually occured.
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
Who would ever assume that it is possible to predict any game of Association Football? When two teams have even slightly comparable skill levels, luck is the largest determining factor of any one game. The better team will probably win best out of 7, but the results of any one game are meaningless when determining who is the superior team.
Any game with such low scoring is the same way. In professional basketball it is possible to have 10-1 favorites because being superior is a far better indicator of who will win. But even in a game like baseball (with far more scoring than assoc. football on average) you usually only see odds of 4-1 at the extreme. And because of the lack of salary caps there is a far bigger discrepency between the skill levels of the best and worse teams in baseball.
-- All that is necessary for the triumph of evil is that good men do nothing. -- Edmund Burke
This tells me more about the American attitude than it tells me about football (soccer).
You can:
- Buy the best players;
- Give them the best equipment;
- Be lavish with money however you desire;
- But you can still be whipped 2-0 by some upstart team from a 3rd world nation with none of your access to wealth and resources.
No wonder so many American's can't understand football!
lemonade was a popular drink and it still is
Have they become very wealthy by investing of by tricking others into paying them to invest their money?
With stocks, the wealthiest people are generally the middle men.
Slashdot social media options: AIM, ICQ, Yahoo, Jabber and Mobile Text. Why no MySpace?
Ha! Or they had some accounting practices that they didn't want the government looking at with a fine tooth comb. The truth is, none of us will really know for certain what the real story is. Just because the guy's a friend from college doesn't mean you know the whole story. Could be true, could be 20% hedging, could be 100% pack of lies. Don't know, and neither do you.
The 'science' can not predict the next Hand of God. Besides, football is football, even the best team can be easily defeated. And there is no set of absolute data for each player and formation. If you play Winning Eleven you see it classifies and gives a quantity to each "ability" such as speed, stamina, aim, strength, etc. But in the real world the player can be shocked by some event (like missing a penalty kick), he can be under pressure, he could have partied all night long and be really tired. All of that has happened in world cups and is almost random. There's no mathematical model to predict the next Hand of God. You can't calculate the rivalries among the team's players, the "will" to play, the distraction of the vuvuzelas, and pure luck.
The model you link placed France third. But they are less than 16th. Chile is 34th but they are between 9th and 16th. It also relies heavily in FIFA's ranking, which everyone knows to be bullshit since it takes into account games up to 4 years old.
Other models take players as individuals and take the team for granted. If that was true, then you don't even have to think about it, Argentina has the best surnames (and we got owned 0-4). As we use to say: football statistics are like miniskirts, they give you a nice picture, but you don't know what it's hiding.
In soviet russia the government regulates the companies.
Is /. not seeing that this is just a huge statistical game?
I've looked at a fair amount of the financial models and they are either a) statistical models that do try to gauge the market, or b) purposeful obfuscation bullshit trying to make things seem very complicated while it hides the true intent of enriching those who make them.
I have no doubt that they used A in their model for doing whatever they were trying to do by predicting the World Cup. Just in the same way all of the people in Vegas, and all over the world, have been doing for years. But when you only have a limited number of 'flips of the coin' it's never going to be perfect. Never mind the human error factor in crafting said models.
Really, I know what I'm doing...Ohhhh, look at the shiny buttons!
You forgot that in the end they crash the car into A, B and the rest of the alphabet. And that the alphabet then buys them a new car - despite the fact that quite a few car makers were killed in that crash too.
The problem is that every bank was saying that they did no bad loans in order to evacuate theirs quickly and throw the hot potato to someone else. Investigating such claims seems only fair. You also claim that the way media reporting is made is not fair. Well, yes, that's true and that's another problem entirely.
The Wise adapts himself to the world. The Fool adapts the world to himself. Therefore, all progress depends on the Fool.