This is why we get better at modelling the weather, but no better at modelling the stock market; the weather is not conscious of our models while the market (participants) are. In addition, the trading machines were trained on historical data that was generated by emotional human traders. The machines’ actions, therefore, are indistinguishable from those of their teachers.

The emotion of fear is the only constant in the market. Patterns in fear and greed (the fear of missing-out) are consistent through time.

Forty years of private equity trading, and still learning.

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