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Moloch's Toolbox (1/2)

medical and drug trials routinely have severe p-hacking issues. And there have been a lot of reproducibility problems reported with, e.g. preclinical cancer research, often lacking slam dunk evidence.

Due to my medical problems I have been reading medical literature for 25 years, and indeed it is a catastrophe of p-hacking and the like, incompetent statistical analysis, ven very often there is a basic misunderstanding of what p-values mean. You routinely see researchers claiming "no effect" when the p value is slightly over 0.05.

Usually, medical papers are misleading in some serious way. The best you can hope for is that they waste the vast majority of the value in the data.

People who read abstracts only and thing they are learning something are deluding themselves. You can to go through the methods section carefully and even then not all the shenanigans are disclosed, and look very closely at sponsorship of the parties to the study (researchers, journal editors, institutions etc) to pick up the extreme biases that result from sponsorship.

An Equilibrium of No Free Energy

John Ott, who popularized and maybe invented time lapse photography (https://www.youtube.com/watch?v=m3Foz1ZJGlU ), wrote a book called "Health and Light". His observations of plant growth led him to an interest in the health effects of light.

https://www.amazon.com/Health-Light-extraordinary-Affects-emotional/dp/0898040981/ref=sr_1_1?ie=UTF8&qid=1509933857&sr=8-1&keywords=health+and+light

He discusses many of the same issues in that book. His view was that while sunlight was much brighter than internal lights, you did not need very bright lights as long as they were full spectrum e.g. included soft UV light. I don't know if this is true or not.

He ran into the meme of "sunlight causes cancer" among other things. Also he started attacking TV set manufacturers for the levels of x-rays they were emitting and thus made powerful enemies. Also of course he was an outsider.

EY's comments on the limitations of market efficiency are worth drawing out. Highly liquid stocks in the short term are efficient relative to one another. Most stocks are illiquid, expensive to trade and hard to short so mispricings can persist. If the market as a whole, even just the large liquid stocks, are too cheap/expensive it is hard to arbitrage away this mispricing because as Keynes put it "The market can remain irrational longer than you can remain solvent".

Due to agency issues, fund managers are entirely focused on short term performance relative to the market. Any agent who tries to take the long term view, and who therefore suffers from "tracking error" will lose all or almost all his funds under management. This has happened to people with stellar multi-decade track records.

Inadequacy and Modesty

Excellent points.

To add to this, we should also bear in mind that GDP growth is a bad metric for comparing countries with low population growth with countries with high population growth.

For one western country with high population growth, I calculated that 20-25% of GDP is devoted just to catering for the population growth. New roads, hospitals, houses, offices, power stations, phone lines, offices, factories etc etc. So for Japan with hardly any population growth, GDP overstates the goods available for consumption versus the US, with high population growth. In effect the US has to produce a lot just to stand still.

As Japan has transitioned to low population growth, its effective 'consumption-available' GDP growth has been far higher than it looks.