Sorry for my ignorance, but how does the profitability test work before the event happens? How do you distinguish between the models being wrong and the markets being persistently biased (such that the models keep diverging further and further from them)? Indeed wouldn't you need numerous events to get a reliable signal?
You definitely need more events to say anything conclusive, I am looking at swing states, congress, popular vote etc.
Regarding persistent bias that is not corrected until event realization that's a definite possibility. That's why is said interpretation of test is tentative.
Sorry for my ignorance, but how does the profitability test work before the event happens? How do you distinguish between the models being wrong and the markets being persistently biased (such that the models keep diverging further and further from them)? Indeed wouldn't you need numerous events to get a reliable signal?
I think I've misunderstood this a bit, sorry.
You definitely need more events to say anything conclusive, I am looking at swing states, congress, popular vote etc.
Regarding persistent bias that is not corrected until event realization that's a definite possibility. That's why is said interpretation of test is tentative.
Got it, thanks.
Fantastic update. Planning on updating my readers this evening as well!