thanks handle... i was just starting to look at the yield curve/ term structure in HG... i thought of something i had read a long time ago about green lumber..
"The Green Lumbar Problem, outlined in Nassim Talebâs upcoming book Antifragile, is essentially misunderstanding which facts are relevant vs those which are not in regards decision making under uncertainty.
From Nassim:
âIn one of the rare noncharlatanic books in finance, descriptively called What I Learned Losing A Million Dollars, the protagonist makes a big discovery. He remarks that a fellow called Joe Siegel, the most active trader in a commodity called âgreen lumberâ actually thought that it was lumber painted green (rather than freshly cut lumber, called green because it had not been dried). And he made a living, even a fortune trading the stuff! Meanwhile the narrator was into theories of what caused the price of commodities to move and went bust.
The fact is that predicting the orderflow in lumber and the price dynamics narrative had little to do with these details ânot the same ting. Floor traders are selected in the most nonnarrative manner, just by evolution in the sense that nice arguments donât make much difference.â"
