I was attracted to finance because it promised some order amid chaos. Here was this market, with billions of transactions a day — and yet it managed to set a price for each asset, a price that put a literal number on the value of future risks, or more precisely how much people value those risks in the present day. The world is inundated with information — about individual companies, about the macro economy, about geopolitical risk, about (not to get too meta) prices themselves — and this price incorporated all that, almost instantaneously. This is the definition of market efficiency.

Except for one small thing: This number, this price, has always been a little wrong. Data, as it turns out, has issues.

QOSHE - Investors Can’t Always Trust the Data, and That’s OK - Allison Schrager
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Investors Can’t Always Trust the Data, and That’s OK

6 1
25.03.2024

I was attracted to finance because it promised some order amid chaos. Here was this market, with billions of transactions a day — and yet it managed to set a price for each........

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