Cyan comments on Rationalist horoscopes: A low-hanging utility generator. - Less Wrong
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Comments (77)
Why not use a Bayesian method, like the one described here.
EDIT: I misremembered; this is not actually a Bayesian method.
That's not a Bayesian method -- it's a frequentist shrinkage method. That said, it's a good one to use for this purpose.
Sorry, I read the page a while ago and linked it without rereading.