Stock prices fluctuate constantly. There are several reliable ways to mitigate stock price volatility: trading short-term gap price differences, buying and selling with momentum, or holding high-quality stocks for the long term until volatility averages out. When stock price movement is mathematically differentiated by time, the instantaneous price emerges—but humans cannot act in microseconds. In contrast, computers, with enhanced performance, can now trade at these speeds. Furthermore, by using artificial intelligence to analyze stock data, computers can reduce mistakes and trade algorithmically, unaffected by emotion. Still, even computers are limited if humans incorrectly input trading rules. Humans are not suboptimal investors due to a shortage of information or knowledge, but because they often fail to follow the necessary rules in each situation. - Joseph’s “just my thoughts”
The social scientist’s method of confirming the facts is first to verify the beta error (Type II error) and then the alpha error (Type I error) before accepting the hypothesis as true. In other words, if the probability is less than 5% after focusing on the likelihood of accepting a false hypothesis as true (Type II error), then we risk rejecting a true hypothesis (Type I error) as false. It’s a conservative position that new information will be accepted only when the probability of being wrong is very small. This verification method is helpful if you don’t want to be swayed by conspiracy theories. - Joseph’s “just my thoughts”