the degenerate serenity prayer

many engineer-types approaching the market want to believe there is some ex-ante-knowable process generating asset prices... and that the job of the investor is to model that process and come up with optimal investment decisions.

that path leads to madness.

many trader-types observe a highly-competitive non-random game playing out on very fast timescales.

and they extrapolate that out assuming inefficiencies to be rampant everywhere they look.

that path leads to madness too.

look closely, and prices move up and down in dollars (ticks) in an adversarial battle.

zoom out, and prices look like they move up and down in percentages / logs in a random way.

which is right?

technically, the first one.

but that's the wrong question...

if you're the first person, thinking about stochastic processes and stuff, you should know that prices are fought over by bots and traders in points, not log returns pulled out of some distribution.

and if you're the second person, extrapolating micro determinism out to longer timeframes, you should know that if you zoom out it all looks pretty damn random.

ultimately, if your goal is to make money, you want to hold all models pretty loosely.

market gods, grant me the serenity to accept i can never understand what's going on, the courage to hold a variety of conflicting wrong models, and the wisdom to know which ones to use and when to use them.