When a Crystal Ball Isn’t Enough to Make You Rich

I saw this tweet by Nassim Taleb:

FOOLED BY RANDOMNESS
My conjecture, expressed on X, that pple w/news in advance don't do well has been tested by Haghani et al.

Indeed they failed to really capitalize on information 1) you don't know beforehand what is noise, & 2) overestimate the information (sizing) pic.twitter.com/6pcwrrVOgf

— Nassim Nicholas Taleb (@nntaleb) September 25, 2024

Here is the SSRN link to the paper: When a Crystal Ball Isn’t Enough to Make You Rich.

Note: SSRN is NOT a peer-reviewed publication even though it outwardly appears authoritative, and is often cited, such as by Wikipedia or the media, as a reputable source, when it isn’t, and many people assume the stuff published there must be correct or good, when, in fact, there is no quality control on SSRN.

The fact that the paper begins with a screenshot of a tweet by Taleb in place of the abstract, is a bad omen. Who puts a tweet at the top of what is supposed to be a professionally-refereed paper?

I don’t get what point it’s trying to make here. A crystal ball minus the actual prices is not a crystal ball, in that it provides incomplete clairvoyance. The reason Biff became so rich in “Back to the Future II” IS because he had all the pertinent future data, that being the outcome of the games. This stupid experiment intentionally omits the most important information, so of course most of the participants lost money or broke even.

Yes, if I had wheels I’d be a race car. The actual experiment is not at all like the title suggests and does not mean anything.

This is yet another example how useless the social sciences have become, and how the pipeline is being flooded with garbage like this, which crowds-out quality research. The replication crisis is a ‘thing’ for a reason, but some studies are so bad one needn’t even try to replicate them know they are worthless.