I intended to post this a couple of weeks back, but somehow it remained in my draft folder. In the meanwhile, Happy Diwali to everyone!!!
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Can “25-Sigma events be happening for 3 days in a row”?
Should they not occur only once in, say 100,000 yrs? But lo & behold, its happened!
Don’t believe me? This is exactly what a CNBC ‘expert’ commented today on the US stocks market! Don’t ask me what context it was, something about the market rising fast, or whatever else. The limited point I’m making is that yes, theoretically there is a low but finite probability it can happen, BUT this kind of stuff is NOT possible in the real world. I know ‘fact is stranger than fiction’ but this strange? Hehehe…
I hope people dont take CNBC too seriously – and I’m not even mentioning Jim Cramer here 🙂 Now here’s the best part : this whole 25-sigma theory has been propogated by GS CFO David Viniar. Boy, they need better staisticians out there!!!
Think about it.
PS – What is a 25sigma event on Wall Street? Check here, here, and here.
What is this 25 sigma event? on Wall Street?