Monday, May 13, 2024

When is good enough - good enough

One of the ongoing problems with research as well as consumption is determining when is spending or analysis good enough. We always want more but is there a point of diminishing returns. The answer is yes, there is always diminishing returns, but at what point do you stop? It is easy to say that you can do a cost/benefit analysis, but for a good or a service, can you actually measure the benefit? If I can get an extra 10 bps of return out of new model feature as measured in a back-test, is that enough? Is it worth the added work? Is it work forming another condition? 

The question of good enough and how to measure the benefit is worth serious consideration. 

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