Investing
A high backtest Sharpe ratio proves little: what real validation requires
Reported Sharpe ratios inflate with every unreported trial, and the corrections that account for this are arithmetic, not opinion.
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Analysis
What does out-of-sample mean in a forecasting paper?
Out-of-sample scoring is the only published test that approximates live trading, and most papers still manage to overstate it.
Markets
What is 'probability of backtest overfitting,' and how is it actually measured?
A diagnostic built to answer one question a good Sharpe ratio can't: how much of a backtested strategy's performance is signal, and how much is the number of…
Economy
The Backtest Trap: Why a Great Historical Track Record Doesn't Prove a Forecasting Model Works
AI-driven trading and forecasting tools are often sold on the strength of impressive backtested results. Here is the mechanism by which those results can be…
Finance News
SEC settles its first AI-washing cases for a combined $400,000
Markets
Anatomy of a bid-ask spread: where the pennies go
A spread decomposes into processing cost, inventory risk and adverse selection — and each component behaves differently when markets speed up.
What does trading volume measure, and what doesn't it tell you?
Volume counts transactions, not conviction — and the modern tape's count includes flows that carry no opinion at all.
Investing
How many signals were tested before this one worked?
Multiple testing turns luck into apparent skill. What the correction procedures control, the hurdles the replication literature settled on, and what a corrected…
What a fund's turnover ratio tells you, and what it doesn't
Turnover measures the pace of trading in the portfolio — a fact with predictable cost and tax consequences, not a verdict on skill.
Economy
BEA's first read on Q2 2026: real GDP grew 1.5 percent
The advance estimate prints 1.5 percent annualized growth after 1.6 percent in Q1 — and by design it is an estimate of an estimate.
What is actually inside the dollar index?
The DXY is six currencies, euro-weighted and 1973-vintage — a specific basket, not the dollar against the world.
Analysis
What replaced the guidance that has governed bank models since 2011?
Federal regulators rewrote model risk management guidance in April 2026, keeping the same validation core built around conceptual soundness and outcomes…
The Fed's stress tests changed shape: what averaging does to comparability
The 2026 results — 32 banks, $708 billion in projected losses — arrive inside a methodology overhaul that trades year-to-year volatility for smoother…
Finance News
Every backtest is one of many: what the trial count does to measured performance
Ten trials are enough to yield an in-sample Sharpe ratio of 1.57 from strategies with zero expected out-of-sample performance. What validation, multiple-testing…
July FOMC holds again — this time with three members voting to raise
The 9-3 vote on July 29, 2026 kept the range at 3.50 to 3.75 percent, the year's first hawkish dissents arriving after a unanimous June.
Latest News
Finance News
AI-washing is not a model failure: what the SEC's enforcement actually measured
The SEC's first AI-washing settlements penalized false marketing about artificial intelligence, not a model's forecasting accuracy — a distinction that matters…
Finance News
CPI cools to 3.5 percent in June, from 4.2 in May
The 12-month rate fell sharply on a 0.1 percent monthly print — energy mechanics and base effects deserve the credit before narratives do.
Analysis
How to evaluate an alternative data vendor: a working checklist
Point-in-time integrity, provenance, history depth and decay tests — the questions that separate a signal from a spreadsheet.
Investing
What should robo-advisor rebalancing claims come with?
Automated rebalancing is real and rule-based — the measurable question is what the rule is and what it costs against doing it yourself.