Friday, October 4, 2024

The difficulty with testing and the mundane


In the words of P.J. O’Rourke, “Everybody wants to save the Earth; nobody wants to help mom do the dishes”. This is an excerpt from Guiseppe Paleologo's new book draft on portfolio management. Everyone wants to be the portfolio manager or the trader. Nobody wants to do the important work of backtesting and the careful analysis associated with building models correctly. Research takes time and is tedious. It is often boring, but the rewards are strong. For a large upfront investment, a good model will allow for significant time savings in the future and the ability to make consistent decisions. 

Sweat the details. There are no big issues to solve but the consistent work of building the models correctly.

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