Cheap measurable signals

A cheap, measurable signal beats an expensive intuitive one at scale, in scouting, in quant investing and in hiring.

• Investing
• Decision-making

2 ideas that carry it

• FrameworkInvestingFilm

  A cheap measurable signal beats an expensive intuitive one at scale

  The market misprices what is hard to measure, so a consistent cheap signal can beat an expensive expert.

  Quant interviews, any debate about discretionary against systematic investing, and understanding how you yourself are being assessed in recruiting.

  From Moneyball · 2011

• ObservationInvestingBook

  A signal that works is small, short-lived and expensive to find

  Expect an edge to be small, to fade, and to cost more to find than to run; a large, durable, obvious one is probably not an edge.

  Quant interviews, and any conversation about whether a published strategy can still work.

  From The Man Who Solved the Market · Gregory Zuckerman