Nov

2

And the law won

November 2, 2024 |

From Big Al:

Campbell's law

The more any quantitative social indicator is used for social decision-making, the more subject it will be to corruption pressures and the more apt it will be to distort and corrupt the social processes it is intended to monitor.

Variation:

Goodhart's law

When a measure becomes a target, it ceases to be a good measure.

Nils Poertner writes:

if one could find a way to increase the odds of Sod's law happening to oneself (trading or otherwise, outside trading). one could find a way to be less exposed to that law. don't have an exact formula here it is just a question.

This book The Improbability Principle: Why Coincidences, Miracles, and Rare Events Happen Every Day, by David Hand, did flip a lever in my brain many yrs back. in this book he described that we have an inadequate idea of probabilities and nature is far more dynamic than we think and that perhaps our own actions and belief systems play a much larger role…(btw, am not saying fate never plays a role)

Rich Bubb writes:

Having witnessed (pre-retirement in 2020) multiple project, engineering & quality failures related to Murphy and/or SOD variants, the engineering & technicians [and often-times myself] that had to deal with the 'Magic Wand' mgmt insane dreams-up are/is best avoided by 'stepping away from the problem, asap'. In some areas, this 'stepping-away' is also known as the "Do NOTHING Rule". Corollary: "Ain't My Job Rule."

Or, knowing that everything rarely goes according to plan (Unknown Unknowns), & expect something-to-hit-the-proverbial-fan. One method I used (more often than I should admit), is a Reverse Fishbone/Ishikawa Diagram. The method has the "Result" of anything going wrong replacing the assumed desired effect , aka the 'Fish-head', then working backwards trying to determine Man, Method, Environment, Measurement, Machine, etc., possible snafu's, & mitigate or pre-fix problems.

Sometimes the Reverse Fishbone is done after the problem is revealed. And the $$$ Cost of mitigation are sometimes 'argued-away' by the cost-benefit folks controlling the situation's budget. This is one reason many engineers fear &/or loathe accountants (but not out loud).

Asindu Drileba adds:

Sods law seems related to a set of precepts used in computer science called the Fallacies of distributed computing.

When building a trading system assume that;
- The market's returns will arrive at the worst possible sequence.
- Your orders will not get filled exactly the way you want.
- Transaction fees are going to eat all your gains
- Your broker is going to scam you (a là FTX)
- You trading system might go offline for arbitrary reasons
- Regulations might change against your favour. (up tick rule, no shorting stocks)

Building a trading system based on such pessimistic assumptions will actually result it a system that will go through alot of muck and still be reliable.


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