I believe in evidence. I believe in observation, measurement, and reasoning, confirmed by independent observers. I'll believe anything, no matter how wild and ridiculous, if there is evidence for it. The wilder and more ridiculous something is, however, the firmer and more solid the evidence will have to be.
-Isaac Asimov, scientist and writer (1920-1992)
- Form a specific question to be analyzed;
- Find all of the existing evidence on the question;
- Categorize the quality of testing and data employed as evidence;
- Form a decision rule based on the power of the evidence available;
- Test using your own database and specification
- Apply the developed rule based or prior and new analysis to your investment process;
- Evaluate relative to past evidence;
- Adjust the decision rule or eliminate.