Emperor has no clothes!

A famous investor has blamed mathematics and “geeks using formulas” to be the underlying cause for the meltdown of the world financial markets. He wrote, “Too often, Americans have been enamored of a nerdy-sounding priesthood, using esoteric terms such as beta, gamma, sigma and the like. Our advice: Beware of geeks with formulas.” If this is so, those who do not use such archaic notions as mathematical formulas and esoteric terms would be doing well. If those who did not use such “geeky concepts,” also failed to produce excess returns for investors, it is problematic to have such a hypothesis. Goofy mathematicians use statistics to test the wisdom doled out by those who do not believe in such constructs. For example, if somebody says “blue cars are more fuel efficient, ” the geeks will measure the fuel efficiency of a large number of blue cars and then compare that against a set of non-blue cars. If the difference is statistically significant, the mathematicians then will accept the hypothesis. These crazy people never take a statement such as “geeks using formulas caused problems,” as true without some evidence. One such evidence will be the over performance of those who are “non-geeks” and those who never used “mathematical formulas”. But if they find that those “non-geeks without mathematical formulas” have not done any better, they will not accept such grandiose statements at face value, whoever produced it. Those who claim that it is easy to see who is swimming naked when the tide goes out, may want to see if they are wearing anything first.