A statistical look at the world.
Interview with Lorenzo Sierra Perez - Trader at Flow Traders
I found out quite quickly during my studies that continuing the natural path of becoming a PhD was not for me. I really liked the content, as both physics and mathematics basically presented complicated puzzles that I wanted to solve, but there were a couple of specific things about a PhD which really irked me. Spending four years -a long time!- on a single topic, mostly by yourself, with relatively little reward for doing great as opposed to scraping by; it had a lot of things that I really did not want in a job. Instead, I flipped them around: what jobs are out there that are fast-paced, very diverse, team-based, where there is a clear feedback loop and you can get a lot of responsibility fast if you do very well? With these job traits to look for, I landed on two possible career paths: strategy consulting, and trading. I sent out some messages to members of my study association who were working in those fields, and after a lot of chats with them I was convinced I should at least try my hand at getting into trading. Now I am coming up to four years as a trader at Flow Traders and I'm still very happy being here.
Is the F1 championship already decided after two races?
Formula 1 seasons last more than twenty races, but championship battles often are predictable surprisingly early. After only two races, fans already speculate about who will become world champion. But how much information do the first races actually contain?
The Red Flag of the First Digit: How Benford’s Law Catches Fraud
If I asked you to invent a list of 100 random expenses for a fake company, you would likely try to make the numbers look as "random" as possible. You would sprinkle in some numbers starting with a 4, some with a 7, and perhaps a few starting with a 9. In your mind, randomness implies equality. However, doing this would result in you being caught rather soon. This is because real accounting data follows a hidden, logarithmic rhythm known as Benford’s Law.
Intuition and Definition of a Martingale
The concept of a martingale originates in the world of gambling, but the idea extends far beyond the roulette or poker table. Imagine a simple game: you start with €0, and in each round you toss a fair coin. If you win, you gain €1; if you lose, you lose €1. Each round is completely independent of the previous one; what happened before does not influence the outcome of the next toss.
Why continuity assumptions matter more than you think
In econometrics, many of the most important results depend on conditions that rarely receive attention. Buried inside proofs, often labeled as “regularity conditions,” these assumptions can look technical and secondary. Continuity is one of them. Yet continuity is not just a background detail. It is one of the structural features that makes estimation possible, inference meaningful, and models stable.
The angel and the devil on an infinite chessboard
Imagine a chessboard stretching endlessly in all directions. In this unusual game however, there are only two actors: The angel, who is our hero of the play, and the devil. The angel moves in a manner similar to a chess king, except that the distance he may travel is determined by some fixed power k. For example, an angel with power 3 can on each turn travel 3 squares from its starting location. The devil can move to any square he likes, and in turn burns that same square, making it permanently inaccessible for the angel. Our question is: is it eventually possible for the devil to trap the angel, leaving it with no squares to fly to, or will the angel always be able to escape?
Meet the 37th VESTING Board
On Monday the 5th of January, the 37th VESTING Board was announced. Each one of them has written a short introduction about themselves below:
Why Economists Disagree Even When Looking at the Same Data
Economists often appear in public debates, disagreeing on the same topic as if they are speaking two completely different languages. One study claims inflation is driven by excess demand, another points to supply shocks. Some economists argue that higher interest rates slow the economy, while others suggest they merely follow economic downturns rather than cause them. Perhaps the most puzzling is that these disagreements continue when economists analyse the same data. The numbers are identical, the time periods overlap, yet the conclusions still differ. How can experts trained in the same field reach such different answers from the same evidence?
Why the other line is always faster
We have all been there. You stand in the supermarket, scanning the checkout landscape like a grandmaster surveying a chessboard. You spot it: the short line. Three people, modest baskets, a cashier who looks caffeinated. You commit. Two minutes later, the woman in the “long” line next to you is already paying and leaving. Meanwhile, your cashier has called for a price check on an unscannable item, and the person in front of you is counting out pennies. At that point it no longer feels like bad luck, but like the world is against you. But as it turns out, your frustration isn't just a mood; it’s a fascinating intersection of psychology, social justice, and cold, hard probability.
Was Widespread COVID-19 Testing a Good Idea?
Imagine you test positive for a test that predicts that you have a rare disease with 99% accuracy. You would worry right? You might think this means you almost certainly have the disease, with only a 1% chance of not having the disease. This seems very intuitive, but is actually completely wrong. If the disease is rare, a positive result from this remarkably sensitive test can still mean that you are almost certainly healthy. This feels impossible at first. How can a test that almost never misses a true case be wrong most of the time when it gives a positive result?