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Regress and progress — 5 Comments

  1. In your previous post but one you were quoting from Candide and Rosencrantz and Guildenstern popped into my head then. I was going to leave a comment to that effect. Maybe it’s the slight surreality of them both which caused me to make that connection but I’ve been thinking about R and G for the last couple of days. I suppose probability dictates that my thoughts at time will correspond to your posts.

  2. The line I quoted, spoken by the Player, in the Candide post is from ‘R & G are Dead’. The play has been on my mind the last few days as I went to see Beckett’s ‘Endgame’ on Friday (bleak) which prompted thoughts about Godot.

  3. There are a lot of misconceptions out there about ‘reversion to mean’ (RTM). Economists and stock market watchers tend to use it to mean that the further you are from the mean the more likely it is that the next move will take you back towards the mean. It’s like playing coin-tossing with a coin with memory, not a fair coin! In fact there is precious little evidence that real markets behave like this. Instead they tend to behave like a random walk – each move is more like the toss of a perfectly fair coin!

    If you play the coin-tossing game with a fair coin (each toss 50/50 heads or tails) the mathematics of probability tells you that the longer you play the further you expect to be at any one time from the expected result of equal heads and tails!

    For a good analysis see http://homepage.mac.com/j.norstad/finance/rtm-and-forecasting.html#game

    The implication, I suspect, is that we cannot expect improvement except in the longest of long terms – and as Keynes remarked, in the long term we are all dead! Perhaps we need to accept that, and find a way of building the kingdom of heaven despite it!

  4. Hi Joc,

    ‘Reversion’ sounds so much more benign than ‘regression’!

    Even Vincent Browne is raging at the church for simply waiting for the markets to solve the problems:

    I continue to be intrigued by those who profess to be Christians, yet are not embarrassed by the question of whether Jesus would think such vast disparities in wealth and income were fair. And if Jesus did not think they were fair, why then don’t Christians support doing something radical about it?

  5. I just remember Listening to Rosencrantz and Guildestern are dead on the radio years ago so maybe that passage stuck in my head somewhere.

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