I thought these suggestions for traders?from NakedShorts was too good to not repeat here:

  • It is far more important to look to simplicity (and common sense) than it is to look to increasing complexity as a means to better control investment outcome.
  • A model whose robustness is unknown or unknowable should never be employed.
  • Sophisticated tools should only be used if it is possible to verify that all required assumptions are satisfied (at least to a good approximation).? When this condition can be met, a simple application of a sophisticated technique is preferable to a complicated one.
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