[ExI] Psychology of markets explanations

BillK pharos at gmail.com
Mon Jun 1 19:00:14 UTC 2009

On 6/1/09, dan_ust wrote:
> No so.  This is not a perfect law in the sense that it doesn't apply.  Instead, it
> applies to all such phenomena.  To wit, armed with this law (and other economic
> laws) one can look at the data and attempt to interpret it correctly.  This is
> especially important in cases where it appears that the law is being violated:
> it directs you to look for confounding factors.  (Of course, at the limit, it should
> call you to question the law; economic science has progressed by steadily
> weeding out "bad" economic laws -- I mean laws are either are completely false
> or only apply to a limited range of economic phenomena.)

I think we are just disagreeing slightly about what a 'law' is exactly.

I say that if it is a law that cannot be used to make predictions,
then it is of little practical use.  i.e. it will lead you to make bad

You seem to say, (one can never be sure), ;)  that, sure, often things
happen which don't follow this 'law' but that is because other things
have changed. I agree it is nice to analyze why my investments have
failed, but I would prefer to have a 'law' that told me not to make
these investments in the first place.


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