One of the most observable things we can share about finance and one of the main reasons that vigt.io was constructed is that for everyday investors, there's a surplus of opinions (what stock is hot, which way the market is headed, what the President’s comments will mean to interest rates, etc.) and a shortage of easily usable mathematical algorithm measurements (the probability skew is ‘x’, the volatility of the market is ‘y’, and the stock that is currently outperforming its peers based on performance math alone is ‘z’).
In surplus are narratives...in shortage are measurements. No wonder the markets are so hard.
As the world and technology evolve, markets are becoming easier to access, more liquid, and rapidly more traversed. This surplus of narratives and this shortage of measurements needed to be addressed. We believe that in order to begin to think in probabilities using measurements rather than narratives and monologues, platforms and tools need to be readily available to assist the everyday investor.
The reason this is so important to us is that the markets, like life, are not binary outcome games. Many analysts and narratives want you to believe that the markets are like checkers. If this then that...which implies that the markets are simply navigated by looking backwards and taking simple measures to move forward. This isn't accurate.
Even more common is the perception that the markets are highly complex and multi-dimensional like chess. This is brought about by a residual use of complex industry jargon by legacy market participants and a general lack of financial literacy by the everyday investor. We find chess to be an inaccurate assessment of the markets as well. Here's an excerpt from John von Neumann in regard to why Chess isn't the right model either:
“…Chess is not a game. Chess is a well-defined form of computation. You may not be able to work out the answers, but in theory there must be as solution, a right procedure in any position. Now, real games,’ he said, ‘are not like that at all. Real life is not like that. Real life consists of bluffing, of little tactics of deception, of asking yourself what is the other man going to think I mean to do. And that is what games are about in my theory.” – John von Neumann in conversation with Jacob Bronowski1.
Here's another expert on the subject of why chess is not the right analog for markets, legendary poker champion Annie Duke’s take on the difference between Chess and Poker:
“Chess, for all its strategic complexity, isn’t a great model for decision-making in life, where most of our decisions involve hidden information and a much greater influence of luck. This creates a challenge that doesn’t exist in chess: identifying the relative contributions of the decisions we make versus luck in how things turn out.
Poker, in contrast, is a game of incomplete information. It is a game of decision-making under conditions of uncertainty over time. (Not coincidentally, that is close to the definition of game theory.) Valuable information remains hidden. There is also an element of luck in any outcome. You could make the best possible decision at every point and still lose the hand, because you don’t know what new cards will be dealt and revealed.”2
Von Neumann and Duke are right. And we believe that markets, like life itself, are more like poker. Markets are a dynamic game. You regularly find yourself with incomplete information. Investing is littered with decision making that's required to take place with great amounts of uncertainty over time. Valuable information remains hidden from the everyday investor’s view. So, ask yourself “how are narratives, singular if-then analyses suited for checkers, and ultra-complex useless jargon useful to me in such a dynamic game like investing in the capital markets?” The answer is – they fall short.
That's why you need all of the easy-to-use mathematical algorithmic decision-making tools that you can get your hands on to help you measure the probabilities that exist in a dynamic game. This is because no outcome is finite when you are investing. This is contrary to the surplus of single facet, one-directional opinions that exist in today’s world - as they all constantly propagate that their narrative is accurate. An interesting exercise to prove our point is to ask one of these narratives a simple question, “wanna bet on it?"
When you perform this exercise, you'll immediately transition from accepting something based on an opinion, to viewing it from a perspective of quantitative analysis. Effectively, you'll trigger yourself to instantly vet their narrative. You will move the game from checkers to poker (at which time you will then need to acquire some information that may not be readily available from today's legacy applications - but vig.io has you covered there). Duke touches on the vetting process in the following:
“When someone challenges us to bet on a belief, signaling their confidence that our belief is inaccurate in some way, ideally it triggers us to vet the belief, taking an inventory of the evidence that informed us:
Remember the order in which we form abstract beliefs:
Throwing out the "Wanna bet?" triggers us to question the opinion/narrative and then head directly to the third step of vetting the entire situation using quantitative decision making, which makes us much more likely to think in probabilities and to look for useful, measurable, and mathematical information. This gives us the highest likelihood of making the best probable investments in a dynamic game like the markets. vig.io empowers you to play and win in the dynamic game that is the global markets.
vig.io was built to be the nexus of where math, your money, and the markets meet. As an algorithmic-driven decision making platform, our objective is to help fill the shortage for everyday investors and move away from the surplus of opinions and narratives that've fueled markets for so long.
Play poker not chess. Use pre-built algorithms to give you a quantitative edge at the table with real-time rich market data. Use vig.io. Then ask those narratives playing checkers – “Wanna bet?”
1 Jacob Bronowksi. The Ascent of Man. (BBC) 1973.
2 Annie Duke. Thinking in Bets. (Portfolio | Penquin). 2018. 20
3 Annie Duke. Thinking in Bets. (Portfolio | Penquin). 2018. 65