Bedtime Stories for Capitalists Quotes

“remembering the fabulous successes we missed (which, like the winners of the war, are here to remind us of their success). But a bigger part is Survivorship Bias. The IPOs of companies that struggle and fail or are acquired at pennies on the dollar no longer exist in our mental database.”
― Sky Lucas, Bedtime Stories for Capitalists: Protection from the Wolves of Wall Street

“Evolutionarily—no small point in how our brains are wired—there is safety too in the crowd. The gazelle on the Serengeti is less likely to be eaten in the herd than alone.”
― Sky Lucas, Bedtime Stories for Capitalists: Protection from the Wolves of Wall Street

“we like to joke that if you torture the numbers long enough, they will confess to anything—have in our opinion a fighting chance of containing a bit of the Holy Grail: the elusive Causality.”
― Sky Lucas, Bedtime Stories for Capitalists: Protection from the Wolves of Wall Street

“called “Out-Of-Sample” testing. When testing an idea, we try to find something that works on a database covering a long time. But not the longest time for which we have data. We take some of the history and “hide” it from ourselves. When we’re done—when we think our idea is ready to produce pots of money for us—only then do we let it try on data its never seen before. Usually we cry a lot after that and go out for a beer.”
― Sky Lucas, Bedtime Stories for Capitalists: Protection from the Wolves of Wall Street

“rest of us mortals, when looking for “lists of winners” go beyond the cover of the magazine. A few (very few, but even a few free ones) take care to stress test track records in detail. Statistical tests, Up and Down markets separately, etc.”
― Sky Lucas, Bedtime Stories for Capitalists: Protection from the Wolves of Wall Street