New Column up at The (02/01/08)


I have a new Apprenticed Investor column up at, titled What Investors Need to Know About Historical Data.

This was a rather different writing experience for me, as it was a collaborative effort with readers. The intro quote, and the entire sidebar was based on feedback from you guys. This not only made the column better, but it allowed me to make the piece far broader than I could have on my own. Thank you for both your efforts and the substance of what you added.

"A man with one foot in a bucket of ice and the other foot in a bed of hot coals is, on average, very comfortable."

"One option is to obtain a college degree in statistics. But that’s time consuming and expensive. Rather than spending another four years in school, I suggest a simpler approach to handling statistical data. When confronted with "incontrovertible proofs" based on historical data, ask yourself this short list of questions."

The rest of the column, consisting of questions you should ask yourself when confronted with persuasive historical data, were loosely based upon what we discussed last Sunday.




What Investors Need to Know About Historical Data
Barry Ritholtz, 02/01/08 – 09:33 AM EST

15 Ways to Check Data (Reader Suggestions)
Barry Ritholtz,  02/01/08 – 10:56 AM EST

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What's been said:

Discussions found on the web:
  1. Pool Shark commented on Feb 4

    Who needs ‘historical data’?

    After all; it’s different this time…

  2. ottnott commented on Feb 4

    I read and greatly appreciated the article. Until now, I didn’t realize it was one of yours.


    Tell that you want a byline nobody can miss. Nix on the dancing B.R. silhouette idea, though. It would remind everyone of the lending bubble.

  3. Don commented on Feb 4

    Excellent article.

    What you are really doing w/ this article and this blog is teaching people how to analyze and view the world logically, i.e., teaching them how to think (but not what to think).

    I think it’s admirable. The first thing any student of the markets (or of any other aspect of the world for that matter) should do when they awake each morning is chant “correlation is not causation” and “all other things never stay the same”.

    That, and read TBP, and its commenters. It’s as close to a free university education in logical thinking as there is.

  4. red95king commented on Feb 4

    You know what credit card companies call account holders that pay their balance in full every month don’t you? Deadbeats.

  5. The Financial Philosopher commented on Feb 4


    I’m not surprised to find that you have a B.S. in Political Science (with concentration in Philosophy). The use of logic and critical reasoning can provide great value in the realm of investing and finance.

    I believe you are not unlike Plato: He moved toward philosophy and away from politics when he came to believe that politicians don’t think clearly enough about the proper relationship between political order and the ideal truth: Plato believed music was one of the “true sciences” because it only involves figuring out ideal “relationships” — it’s purpose is not “practical;” and Plato was a “rationalist” — just because someone CAN know the truth does not mean that they DO know the truth…

  6. Mike commented on Feb 4

    Here’s to all the Giant fans that wanted to toss out Tom and Eli, o ye of little faith

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