tag:blogger.com,1999:blog-264226589944705290.post8436446736666004838..comments2022-05-19T07:55:48.367-07:00Comments on God Plays Dice: Lightning and lotteriesMichael Lugohttp://www.blogger.com/profile/15671307315028242949noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-264226589944705290.post-63319443527280165052008-07-05T10:56:00.000-07:002008-07-05T10:56:00.000-07:00Krusty: You people are pigs! I, personally, am go...Krusty: You people are pigs! I, personally, am going to spit in every 50th burger!<BR/><BR/>Homer: I like those odds.I. J. Kennedyhttps://www.blogger.com/profile/04805435564360543720noreply@blogger.comtag:blogger.com,1999:blog-264226589944705290.post-58932665150026710492008-07-05T01:39:00.000-07:002008-07-05T01:39:00.000-07:00Isabel, so I was thinking about the stock market t...Isabel, so I was thinking about the stock market today, and what the expected return for the market is. As you know, thanks to <A HREF="http://en.wikipedia.org/wiki/William_Forsyth_Sharpe" REL="nofollow">William sharpe</A>, all financial theory is based on the expected return of equities.... except no one can agree on what to "expect". Most of the time its the arithmetic mean of past returns, but sometimes people use the geometric mean, still others the arithmetic mean plus dividend yield. No one seems to use the harmonic mean, that i've encountered.<BR/><BR/>So my question is more general. What can the difference between the arithmetic mean and the geometric mean (and harmonic) tell us about the dispersion of the data we are looking at? <BR/><BR/>also, the harmonic mean seems to relate to the exponential function,as does the normal distribution, which brings me back to my question about what difference between the means tells us about dispersion. <BR/><BR/>Thanks.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-264226589944705290.post-90675690058289216582008-07-04T10:07:00.000-07:002008-07-04T10:07:00.000-07:00Presumably there is a significant chance of a ligh...Presumably there is a significant chance of a lighting strike being fatal, so at least for the first 6 strikes, you should be an even smaller probability that is scaled by the survival rate. <BR/><BR/>Also, for most people, is the constant Poisson parameter assumption valid? I mean if I had been struck, I would definitely take steps to decrease my parameter in the future.Anonymousnoreply@blogger.com