Conversation

SBF
@SBF_FTX
Replying to
@SBF_FTX
9) In Bob's case, his data is technically correct! But there are two core issues: a) his revenue might not be the same in both cases; maybe the mobile app makes more than 4x as much revenue as the B2B product. b) also: valuation isn't all that matters! I'd prefer earnings.
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SBF
@SBF_FTX
10) Bob probably would have been better just saying "let's build the business that seems the best" and ignoring valuation. In Alice's case, her data is probably being misinterpreted.
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SBF
@SBF_FTX
11) Yes, there is a positive correlation between having 10k employees and being successful: You can only hire 10k employees if you've done well. So there's a correlation, but the direction of causation is probably wrong.
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SBF
@SBF_FTX
12) And how about Zed? Well, what, in the end, is an impression? One of the important properties about superbowl ads: they're talked about again and again and again, in lots of places that are hard to track. The direct views significantly underestimate it's impact.
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SBF
@SBF_FTX
13) And in this case, a simple gut check might have made Zed realize that _obviously_ superbowl ads have large impact, and a lot of that is the chatter. So there are lots of ways to use data poorly. That doesn't make it useless--there are also lots of ways to use it well!
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SBF
@SBF_FTX
14) But if you do a mediocre job of using data, it just adds noise which distracts you from your baseline reasonable judgement. There is a fairly high bar that statistical analysis has to overcome to be net useful!
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SBF
@SBF_FTX
16) And this is a failure mode that a _lot_ of people fall into. The vast majority of statistics that I see quoted are useless. The times when stats are more likely to be useful are when they are answering a very specific, intentional question.
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SBF
@SBF_FTX
17) If you've thought hard about a decision you have to make and think you really understand the various factors, and know which factor you're uncertain about, then it can be *extremely* helpful to get some data!
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SBF
@SBF_FTX
18) But aimlessly generating data just distracts. It's also very similar to a trap that some interview candidates fall into, particularly those with strong math backgrounds: Given a hard, messy question, they'll try to solve it exactly. And if they can't, they get flummoxed.
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rypto
@scrypto_
Replying to
@SBF_FTX
All this - another reason why we need adequate control and consent to big data-driven technologies. We can make amazing things/tools with amazing data but we need to empower the individual to decide for themselves if the end result is in their best interests. AIxblockchain ftw
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logUp
@logUp12
Replying to
@SBF_FTX
Great points. However, I'm curious how you would apply this in the world of quant trading/market making. Are there examples where you were better off relying less on stats & more on intuition
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Richard Jones
@Smartinvest1ng
Replying to
@SBF_FTX
You spent a lot of time and thought to say very little. Statistics without all the variables are ether for crap or often abused by using the wrong variables. Statistics in general are very useful though.
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