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benelliott comments on Rationality Quotes: February 2011 - Less Wrong
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--Paul Graham
An interesting concept...but I wonder. I bet at least some people would actually notice that. They'd see unrest in the middle east and say "hmm...oil prices didn't change the way I expected them to" or something. Sometimes you see things like "_ index rises in spite of _".
I think Graham's inference has merit: these people don't really know what's happening...but I think some people at least would notice the anomoly.
Well now I want to test this. Do we have anyone here who thinks they know a thing or two about the stock market? If so would they be amenable to an experiment?
I'm thinking that they would agree not to look at any stock price information for a day (viewing all the other news they want). At the end of the day they are presented with some possible sets of market closes, all but one of which of which are fake, and we see if they can reliably find the right one.
Finding the most probable market outcome given a few possibilities and a day's news is easier than noticing by yourself that the news and the market don't fit.
I will participate if you'd like to try, there are some problems with the experiment though
I'm still interested, what changes would you suggest?
Sorry for the slow reply, want to do this over email? im gbasin at gmail
I'm benelliott3 at gmail. To be honest I'm not very familiar with the stock-market so if you could suggest a procedure for the experiment, including such things as where to get the information that would be appreciated.
Care to precommit to a discussion post about the experiment regardless of the result?
Well, the time Steve Ballmer announced he was to quit the Microsoft, Microsoft's stock jumped quite a bit, clearly because Ballmer quit, even though one could perhaps explain either a raise or a fall with Ballmer quitting. Expected square of a change was big from Ballmer quitting, that's for sure. Same goes for any dramatic news, such as the recent gas attack in Syria.
And yes, over the time one could tell that something is up if the stock market graph is uneventful while there's dramatic news.
Bottom line is, a causal link can exist and be inferred even when there is no correlation.