Take wisdom from a seashell and apply it in the desert
Or, how to learn about stock picks from forensic science (or lack thereof). From Tom Brown:
They almost hooted me out of the meeting this morning when I pointed out the investment significance of Sharon Begley's "Science Journal" column ($) in today's WSJ. But what do they know?
Begley reports that following the Madrid bombings in 2004, the FBI mistakenly accused a man named Brandon Mayfield of involvement after mis-reading a fingerprint lifted near the bomb site. (The print actually belonged to an Algerian living in Spain.) Fingerprint analysis is said to be nearly foolproof, and FBI analysts are among the best around. How could such a screwup happen? Researchers tried to find out, Begley reports....
Incidentally, if you're interested in the fingerprint topic, you can go here to read more. Basically, five fingerprint experts were told something that led them to believe that two prints didn't match, and three of them subsequently concluded that the prints didn't match. Even though, in actuality, the prints presented to the examiners did match. Or didn't; it gets messy.
Tom Brown continues:
If wrong assumptions can cause experts in a narrow field like fingerprint analysis to have cognitive difficulties, how can portfolio managers, who tend to know a little about everything but be expert in nothing, hope to objectively understand the companies they invest in? Answer: they can, but only if they do a lot of work. In the meantime, the mind will play tricks along the way. . .
So using fingerprint forensic science to make conclusions about stock investment strategies can be illustrative. Next, I suggest that we use Ladytron lyrics to examine electric utility investment models. Or use Krystal Fernandez football picks as a predictor of Caribbean hurricane activity. Or the frequency upon which Joe McDonnell is (or is not) broadcasting as a point of comparison against Madonna's current hair color. (Oops, "colour" - I forget that she's British now.)
P.S. on fingerprints. Also see:
Spire Security Viewpoint
The Weekly Detail (about an earlier, but related, study by Itiel Dror)
Complete Latent Print Examination Message Board
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