Nang explains why intuition is a subconscious synthesis of data, the limits of out-of-sample R-squared, and how over-confidence can be dangerous.
View full episode →“Out‑of‑sample R‑squared in finance is typically 0.03‑0.04, indicating very low predictive power”
“Confirmation bias, recency bias, and gambler’s fallacy are amplified when traders over‑interpret small sample results”
“Financial markets provide a small, noisy data set that makes overfitting especially dangerous”