Know your data, the fundamentals of analysis




Thanks to Ben Hunt's newest monetary letter, I pulled out my vintage copies of work by Ed Tufte, the visible information extraordinaire. He might have performed extra for nice visualization and information research than anybody over the final 40 years. The Anscombe Quartet says all of it in the event you do not seem to be on the data.



I took the Tufte at some point course on the visualization of information over 20 years ago and it has had a profound impact on focusing my powers of observation and my capacity to suppose of blank representations of data. Over the years, I actually have adopted a set of guidelines while watching at information that has served me well.



My information rule checklist:



1. Graph the information - If you can't see it, you can't recognize it. Pictures are critical.

2. Cut the information - Look over unique time intervals to see if there are changes. Data move.

3. Get the stats - Understand the distribution of the information in simple terms after seeing it first.

4. Look on the histogram - Find for outliers simply due to the fact it really is had been funds is won or lost.

5. Match information with occasions - Go equally methods  - match outliers with occasions and large occasions with data.

6. Generate conditional tables - The energy of a 2x2 contingency desk is typically missed.

7. Check the volatility and correlation  - See regardless of even if volatility and correlations change.

8. Compare towards nice occasions and bad - Show industry cycle and large occasions on graph.

9. Map idea and past proof  - Use priors of unique researchers to focus representation of data.

10. Run your regression assessments - Be skeptical and discuss residuals.



Good information research is a talent that might be realized by way of following a process.

Komentar

Posting Komentar

Postingan populer dari blog ini

Three big picture trading themes to watch

Gambar
The Great Divergence in monetary policy Perhaps the Great Divergence in monetary policy between the Fed and ECB is not a great as expected given the weaker than expected policy change by the ECB, yet 2016 will continue to be the story between the Fed raising rates and the ECB pushing interest rates further into negative territory. Right before the ECB announcements the interest rate differential between Germany and the US was at the widest level since the introduction of the Euro. Yields in the EU jumped up and the Euro had one of the biggest positive days since its inception on the announcement only to see ECB president Draghi suggest that there is "no limit" to what the ECB will do to help the economy. The high volume of activity coupled with the price moves tells us that that many are trading this differential closely. Some of the most liquid markets in the world may still face cascades when these crowded trades are surprised.  Assume that the Fed raises rates in December,
Baca selengkapnya

Global macro themes for March on one page

Gambar
One month makes a big difference. We have gone from a hugely negative equity environment, oil crash fears, a credit downturn, and Fed policy mistakes to strong equites, an oil rally, and less credit risk. The economic environment has not changed radically, but when risk appetite changes the asset markets around the world change.  Can this last? This will be the number one question for March. We think there are still major headwinds to stop a sustained rally, but data change and markets change. Nevertheless, there needs to be confirming economic information to sustain the current rally. 
Baca selengkapnya

Vanessa Angel Dikabarkan Hamil, Sang Ayah Enggan Berkomentar

Gambar
See detail Belum lama menikah dengan Febri Ardiansyah, artis Vanessa Angel dikabarkan sudah berbadan dua. Sang ayah, Doddy Sudrajat enggan berkomentar tentang hal tersebut. “Saya nggak mau komentar soal kehamilan. Itu kan masalah pribadi. Tanya saja sama Vanessa secara langsung,” kata Doddy saat ditemui baru-baru ini. Doddy mengaku tidak melihat ada tanda-tanda kehamilan pada Vanessa. Dia juga tidak melihat perubahan pada sang putri. “Pas hari Sabtu (saat Vanessa Angel menikah dengan Bibi, Red) nggak terlihat perut Vanessa besar seperti orang hamil,” akunya. Doddy mengatakan, ia bersedia menikahkan Bibi dengan Vanessa Angel setelah menantunya itu datang secara baik-baik ke rumah. Doddy juga melihat keseriusan Bibi kepada Vanessa. Ketika disinggung soal resepsi pernikahan, Doddy enggan memberikan bocoran. Padahal sebelumnya sempat beredar kabar bahwa Vanessa Angel dan Febri Ardiansyah akan menggelar resepsi pernikahan di Bali akhir bulan ini. “Resepsinya ada, tapi nggak tahu waktu dan t
Baca selengkapnya