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About the Author
Tim Unger
Principal, Head of Strategic Research, Towers Watson
Tim Unger is a senior investment consultant who heads up Watson Wyatt's strategy team in Australia, which is responsible for carrying out the quantitative modelling and research that supports the strategic asset allocation advice that we provide to clients. He is also a member of Watson Wyatt's Thinking Ahead Group.
Articles Published
Showing results 1 to 3 of 3
The need to differentiate between noise and skill: too many fooled by randomness?
Most outcomes in life are impacted by skill (or a lack of it) as well as noise (random chance or luck). What do we mean by this in practice? We mean that a portion of any outcome is likely to relate to ... Read moreMost outcomes in life are impacted by skill (or a lack of it) as well as noise (random chance or luck). What do we mean by this in practice? We mean that a portion of any outcome is likely to relate to the process that was put in place to produce it whilst another portion is likely to relate to random factors, or noise. In turn this means that if a particular event is heavily impacted by noise then the associated outcome may not be consistent with the process that was put in place to produce it. More simply, a bad result may arise even if the process behind it was actually quite sound.
The need to differentiate between noise and skill: too many fooled by randomness?
Most outcomes in life are impacted by skill (or a lack of it) as well as noise (random chance or luck). What do we mean by this in practice? We mean that a portion of any outcome is likely to relate to ... Read moreMost outcomes in life are impacted by skill (or a lack of it) as well as noise (random chance or luck). What do we mean by this in practice? We mean that a portion of any outcome is likely to relate to the process that was put in place to produce it whilst another portion is likely to relate to random factors, or noise. In turn this means that if a particular event is heavily impacted by noise then the associated outcome may not be consistent with the process that was put in place to produce it. More simply, a bad result may arise even if the process behind it was actually quite sound.
The need to differentiate between noise and skill: Too many fooled by randomness
Most outcomes in life are impacted by skill (or a lack of it) as well as noise (random chance or luck). What do we mean by this in practice? We mean that a portion of any outcome is likely to relate to ... Read moreMost outcomes in life are impacted by skill (or a lack of it) as well as noise (random chance or luck). What do we mean by this in practice? We mean that a portion of any outcome is likely to relate to the process that was put in place to produce it whilst another portion is likely to relate to random factors, or noise. In turn this means that if a particular event is heavily impacted by noise then the associated outcome may not be consistent with the process that was put in place to produce it. More simply, a bad result may arise even if the process behind it was actually quite sound.
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