Correlation ≠ Causation

I just had to put this point down on paper. I was thinking about it earlier and wanted to highlight the point with a strong visual image. I will go into more depth in one of my Sunday letters next year and show how prevalent this line of thinking is in trading.

How silly we seem to be seeing spooks in the dark. Actually there is something called the “confounding variable” which is one of the factors that steers us off course. More about it in the new year.

Lets keep this a little light into the new year. 😉

 

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