I entirely agree with you. In fact, there are still people doing arbitrage on eBay, although eBay is now an established site visited by millions. An example: some people look for misspelled items being auctioned (an auction where the item being auctioned is not spelled right, attracts a lot fewer bidders), buy them low, and sell them high at another auction. Looks like a truly classic arb! Of course, there's still the risk that the item one has just bought will attract no bidders...
In exchange-traded financial instruments, arbitrage is now incredibly more difficult than what it was 100 years ago. Computers and communications killed most of the arbs. But it's still possible to find arbs in structured products :-)
And, although sports betting sites are shady, I would bet there are quasi-arbitrage opportunities to be found in online sports-bettings these days...
1) I find your writing style juvenile and distasteful. Maybe some of you yanks actually like that kind of writing. Personally, such writing makes the reading intolerable, even if the content is interesting.
2) Still regarding 1): if you already have the fame, why do you keep writing like a disgruntled teenager desperate for attention?
3) Interestingly, I don't disagree with the points you made in the article, I just don't think that insulting your audience is the best way to make your point. Maybe some people like it. To me, it just sounds vulgar.
4) Statistics taught in undergrad and business school is pseudo-Statistics. I don't mean to be pedantic, but the truth is that only graduate-level, rigorous, Mathematical Statistics counts as "true Statistics". One does not need to know the entire field (that takes at least one lifetime), but one needs to know the fundamentals very well in order to apply them.
5) Mere mortals can only be experts in one or two things. You have programming and guitar. Sorry, but you still are no Statistics expert on my book. 10 years of R is impressive and valuable, but if you don't know the foundations, you're a technician, not a statistician.
6) My field is not Statistics. I am no expert in Statistics, and I am not qualified to write about it. I can write a blog post on Algebraic Geometry, but you would not understand it, so there's no point.
7) Unlike you, I have no interest in revealing my true identity. Unfortunately, there are evil people in this world, and whatever I would write on HN under my real name could be used against me later on. If you're not in that position and can write what the fuck you want on your blog, then I must say that I envy your freedom.
To recap: writing like a teenager does alienate some readers, and calling a non-expert an expert is something to be avoided.
The world changed faster than Statistics. These days, anyone with a computer can analyze data sets, which is awesome. The problem is that the Statistics books are not designed for the masses, and the experts are concerned with technicalities that programmers, for instance, couldn't care less. If Zed helps brings Statistics to the programmers community, I guess that can only be a good thing...
The good news is that there seems to be an opportunity here: write Statistics for the non-statistician. Not everyone who needs Statistics can take 2 years off to learn it. Back in the 1970s, Digital Signal Processing was an advanced grad course... now it's a basic undergrad course. Maybe Statistics will go the same way, becoming more and more prevalent, and less and less ivory tower.
I find MIT OCW courses on Statistics a good source of references. Reading books takes time, but you can find some lecture slides and lecture notes there.
I, too, found Statistics impenetrable. One solution I found was to learn Statistics from the Electrical Engineering and Computer Science perspective. Instead of weird abstractions, in EE and CS one thinks of more concrete things, like random signals, or data sets. The best way to learn Statistics is to apply it.
One problem, though, is that knowing only a little Statistics might be worse than knowing nothing.
I am not saying Zed is wrong, I am merely saying his post is not really that insightful... at least when compared to other essays on Statistics one could read instead. For example, what Cosma Shalizi writes on Statistics is much deeper than what Zed did. Another example: Andrew Gelman has a great blog on Statistics, and he's a true expert.
For me an "expert" is someone who has at least 10 years of experience in one field. An expert on Statistics must have carried out extensive data-analysis work, or must have published original papers. Reading books gives one some understanding, but only when one must solve a problem, does one realize that one's knowledge is utterly superficial.
Zed is no superman. His area of expertise is not Statistics, it's something else. I am not saying he's stupid. All I am saying is that he has not invested the many years of effort into studying Statistics to earn the title of "expert". By calling him an expert, one insults all the true experts out there, the one who do not write blog posts using juvenile language because, you know, they have better things to do... like spending time with their friends and family...
Nine out of ten people learned Statistics from teachers who knew jack of Statistics. The difference between Statistics and Math is that Statistics is data-oriented and somewhat "experimental". Yeah, I hated Statistics in high-school, but when I learned Information Theory and Statistical Signal Processing, then I understood what one could do with knowledge of Statistics, and what the field is all about.
If you can't see the beauty in it, you've probably been taught pseudo-Statistics. Don't feel bad. All the Math that engineering students learn is kind of pseudo-Math. All one learns in high-school is BS. If you want to learn something, here's my advice:
i) Don't use modern, over-designed textbooks.. you know... the thick expensive ones with many colors and boxes highlighting the formulas one must memorize.
ii) Instead read the classic books from the 1960s, many of which are published by Dover. They look boring at 1st sight, but their content is rich. Another option is to get the old Soviet books from the 1960s, which tend to be forgotten gems. The Russians are the best at marrying theory with application.
Not to mention that only in textbooks can one find perfect risk-free arbitrage opportunities. Unfortunately, the real-world offers only quasi-arbitrage opportunities. Fortunately, contrary to what some academics believe, such opportunities do exist.
Ruby ninja, guitar-player extraordinaire, self-taught Statistics expert... wow!!! Zed's propaganda machine rivals that of Kim Yong-il.
Get this: you need deep understanding of the fundamentals, otherwise you're not doing Statistics, you're doing Voodoo Magic. If you learned some Statistics from Zed's post, then you must know even less than he does. But then, one of the many symptoms of ignorance is the false belief that one knows. Do you even realize how many years one needs to become an expert on any field, especially a tough field like Statistics?
Look, I know it's none of my business, but if you're a newbie and you want to learn some Statistics, wouldn't you be better off checking the MIT OCW pages, or the countless lecture notes in PDF format that can be found on the web? This is an honest question.
Contrary to what many short-sighted "pure" mathematicians think, Statistics is hard. You can't explain statistics in a bunch of blog posts, not even if you are a true expert. You can't condense all that knowledge in a blog post, one must read the books, though painful that may seem.
Zed Shaw should stick to his area of expertise. His angry, opinionated rants on topics he clearly lacks deep knowledge of are perfect examples of the pseudo-intellectual junk that litters HN from time to time.
When I mentioned that NK could be a gold mine, what I had in mind was investments like real estate, utilities, land, agricultural commodities. My point would be clear if I had not suggested moving factories there to take advantage of cheap labor. My mistake.
Very good point. China is only the tip of the iceberg. For example, about 10 years ago, there was a scandal that Nike used slave child labor in Pakistan to manufacture soccer balls.
Please note that I stated that some people were willing to pay for the privilege of blowing up Somali pirates with heavy weapons. You found evidence that the Russian company selling pirate-hunting vacations was a hoax. I am talking about demand for a gory form of entertainment, you're talking about supply. Hence, you have not defeated my argument.
I personally know people who would pay to shoot pirates with 50-cal machine guns. You'd be amazed at how bored executives at big companies can get...
I wondered the same. North Korea is a potential gold mine. Sooner or later, the regime will collapse or open up to capitalism, and when that happens the influx of foreign capital will be enormous. When the labor costs in China become "too high", and when Vietnam is no longer "that cheap", going to NK will be the natural option. Location-wise, NK is right next to Japan, so it's less of a logistic nightmare than, say, Cambodia or Laos.
In fact, I remember reading an article in the mid-1990s about an investment fund that only invested in extremely risky places, like war-torn countries in Africa, or hermit states like Belarus or NK. The idea is that when things have hit the bottom, the only possibility is for things to get better, and though the risk is very high, if 1 out of 20 countries they invested in turns out to become a stable, investor-friendly state, then the foreign investors will flock there, prices will rise, and the fund's initial investments will yield astronomical returns.
Weren't some rich Russians willing to pay for the privilege of a pirate-hunting vacation off the coast of Somalia? You're assuming everyone has a conscience, which is an unrealistic assumption.
In exchange-traded financial instruments, arbitrage is now incredibly more difficult than what it was 100 years ago. Computers and communications killed most of the arbs. But it's still possible to find arbs in structured products :-)
And, although sports betting sites are shady, I would bet there are quasi-arbitrage opportunities to be found in online sports-bettings these days...