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If your data mining method results in no significant results, you should look for a different data mining method rather than relaxing your statistical requirements. For example, do not test billions of possible models. This is a recipe for failure. There are alternatives. Develop strategies...

Technically speaking, curve fitting is the goal. Curve fitting is the art of matching a theoretical model to the underlying behavior of a multidimensional data set without allowing random variations to influence the model parameters. By analogy, when backtesting we want to find a trading model...

I don't know how I missed this thread earlier. Good thread. Responding to the original post, your concern is a well known statistical flaw called the multiple hypothesis or multiple comparison problem. Using an uncorrected T test to evaluate the statistical significance of a large number of...

In SF Bay Area rents dropped precipitously (30% or so) in 2000 and 2001 and have been steady or dropped a bit since then. In the same time housing prices have gone up about 30%. Martin

Oh, I agree. Most, but not all. Opportunity cost is included in discounted present value by definition. That is what discounted means. The discount rate is the time value, or opportunity cost, of money. In my neighborhood, the intrinsic value of virtually all houses is negative. That's why...

Hey man, you started the thread. You said discuss. I discussed. What's your issue? By an astonishing coincidence, I actually live in Shittown, California and from where I sit there is a real estate bubble. I didn't say there's a bubble in Omaha. That's why I said, "In many markets...."...

So was the dot-com bubble. Just not enough intrinsic value. :) Tell Amazon, EBay, Yahoo, and Google that there is no intrinsic value in doing business on the Internet. In economic terms, the intrinsic value of an investment is the discounted value of future net earnings that one can expect...

The correct analogy will be obvious in hindsight, just as the flaws of the New Economy were obvious in hindsight. In many markets, real estate investors make up a significant proportion of buyers and they are not profitable either. Where I live, houses rent for less than the cost of money on...

That's the most plausible explanation I've heard. Maybe there's something in Texas consumer protection law that prevents them from using this "bait and switch" tactic. Any other Texas based Freetrade customers here? Martin

And the difference between affordabilty and demand is what exactly? Martin

Granted, the real estate market is illiquid, opaque, inefficient and highly segmented. But it is still a market. Willing sellers meet willing buyers and exchange real assets at a price determined by supply and demand. If that's not a market, what is it? In any case, you have merely raised a...

Unless the 30 year yield is also priced beyond affordability, as Greenspan has been reminding us every chance he gets. The market will figure it out. Martin

http://www.irs.gov/publications/p550/ch04.html "Once you make the election, it will apply to 2005 and all later tax years, unless you get permission from IRS to revoke it." http://www.fairmark.com/traders/mtmacc.htm "Once you make the election, you have to continue to use the...

Apart from the benefits you listed earlier in the thread: 1) An entity can elect MTM internally when it is created, at any point in the tax year, which is a way to get around the April 15 deadline. 2) It is difficult for an individual to go back from MTM to cash method of accounting...

How about historic options end-of-day data going back a few years? Martin

Fundamentals always get the last laugh, though. Martin

I'm very happy with IQFeed for equities, using their socket interface. Don't know about futures. Martin

Literally nothing, eh? Odd that you went on to contradict yourself in the next paragraph. Martin

A smart trader doesn't bet against the tape, as you said. But a smart investor will get out of an overvalued market. It is precisely because Toll Bros has been on a tear that people think there is a bubble. If the momentum players weren't making money, nobody would be calling this a bubble...

Maybe you weren't listening to the right people. Malkiel devotes a chapter of "A Random Walk Down Wall Street" (first published in 1973) to bubbles throughout history. Newer editions catalog several stock market bubbles in the United States in the 20th century. George Soros published a theory of...