Science and finance - need to look at the data

In general we look for a new law by the following process. First we guess it. Then we compute the consequences of the guess to see what would be implied if this law that we guessed is right. Then we compare the results of the computation to nature, with experiment or experience , compare it directly with observation, to see if it works. If it disagrees with experiment it is wrong. In that simple statement is the key to science. 

It does not make any difference how beautiful your guess is. It does not make any difference how smart you are, who made the guess, or what his name is - if it disagrees with experiment it is wrong. That is all there is to it.


We must always remember that the plural of anecdote is not data.

-Richard Feynman The Character of Physical Laws

The same rules of science also applies to rules of financial research. there is hypotheses and conjecture which has to be tested. If the idea s not backed-up in the data, then it is not true. Similarly, telling stories without proof will not be useful no matter ho many stories or examples are used. You need to look at the data.