Beware Wind!

A little more finance. Again from Derman's Blog. In the following paper it is described that studies have found evidence that wind speed has strong influence on mood and consequently effect in stock returns. All extracted from data of wind speed and daily stock market returns across 18 European countries from 1994 to 2004. The authors claim: our findings contradict the rational asset-pricing hypothesis ...
This is a joke, or weather forecasters will become immensely rich and will only publish fake forecasts in the future to avoid sharing.
I really like data-driven methods, but this example shows, how important it is to analyse the full range of factors that might influence and apply multi-method analysis and how dangerous a naive approach can be.
Humans WANT to see patterns and machine learning shall help us to see the right ones. It often requires comprehensive cross-model checks, sub domain analysis, .... This is why we have passionately developed multiple methods and task builders for mlf .

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