|
PureBytes Links
Trading Reference Links
|
Hello bondo92677,
b> Those computer models did alot of good for LTCM. Computers don't
b> understand that in the real world, sh*t happens.
I specifically have "first hand knowledge" of LTCM problems. It was
that that the method for calculating historical volatility was flawed.
Dynamic look back periods will ensure that a higher degree of
stability can be realized using this forward. Sometimes management
"READ HUMANS" make the wrong decisions and then after the fact they
claim it was the computers fault. When in fact there is another old
saying ride a good horse to death. In this case it meant that a
problem was discovered and a better method suggested, management
choose not to listen.
b> As soon as the sharks smelled blood, no one would make a fair
b> market for LTCM. Whoops! How could that possibly happen?
b> Probabilities? Reversion to the mean? Have we ever seen p/es this
b> high? When the last time interest rates were this low? How can a
b> computer predict what might happen in the aftermath of 911 when
b> such an event has never occurred?
Yes, computer programs I know of were hedged going into 911, as they
are always hedged against CATASTROPHIC events. Pitting financial
against debt instruments to dampen the shock. I know of no humans who
could do the same with as cold and calculating precision. When faced
with an event like this computer just does it's job it does not second
guess or try and make sense of the situation. I know that for the
average guy this seems unbelievable, but yet it does exist.
b> I'll take a street bum over a computer anyday.
The street bum would certainly be desirable over someone who though
they could obtain and comprehend all the knowledge to trade the
markets themselves using visual assistance. You are using a computer
to send email as opposed to using pen, paper, stamps and envelope?
What's the difference? The time it takes to overcome the learning
curve, or acceptance curve.
--
Best regards,
TheQuant mailto:thequant@xxxxxxxxx
------------------------ Yahoo! Groups Sponsor ---------------------~-->
FREE COLLEGE MONEY
CLICK HERE to search
600,000 scholarships!
http://us.click.yahoo.com/iZp8OC/4m7CAA/ySSFAA/zMEolB/TM
---------------------------------------------------------------------~->
To unsubscribe from this group, send an email to:
realtraders-unsubscribe@xxxxxxxxxxxxxxx
Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/
|