Some Sneaky Statistics Unveiled

by rrusczyk, Mar 3, 2007, 4:13 PM

I wonder how common this oversight is in medical (or other) experiments. It's certainly common in the financial world, and its practice even has a name: greenhousing. A firm starts 64 tiny funds, then after 6 years, odds are that it will have 1 fund that 'beat the index 6 years in a row'. It will then market that fund like mad to raise capital.

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Very interesting.

by joml88, Mar 3, 2007, 6:03 PM

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As Jay Leno reported a couple of weeks ago, "A new study says that 40% of all scientific studies are wrong. The good news is there's a 40% chance this study is wrong."

A reputable stock broker is currently marketing a program to "send your trading strategies back in time". Let the buyer beware.

by rcv, Mar 4, 2007, 3:40 AM

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If a study claims that "40% of all studies are wrong," then you cannot say that there is a 40% chance that it is wrong, because, if it is wrong, then the 40% figure doesn't apply. I know, I probably shouldn't be trying to analyze comedic remarks, but I just couldn't resist. :roll:

by roadnottaken, Mar 5, 2007, 3:05 AM

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