Can you beat ARIMA at forecasting time series?
In my time series forecasting class I didn't exactly believe in the power of simple ARIMA models. I always thought I could simply draw a line and get about the same accuracy. Well it turns out
ARIMA is often better than me, but more importantly in my opinion unbiased. I made a simple game using real stock price data to try to draw a line that would beat an autofitted ARIMA model at forecasting
10 periods into the future. The
code is available here.
Why I hate the word you (and you should too)
Why do I hate the word you? It’s authoritative. In the title I said “and you should too” which immediately alters the state of open-mindedness with which someone would approach this article. I believe it is never good to directly tell people what to do, to act with authority. We often talk to ourselves in second person, saying you to myself when I give myself advice for example. Then when we take on these conversations with others it seems natural to keep up the same manner. But saying you to someone else is dangerous, it commands that they relate to what I am saying.
When I talk I often restrain myself from saying the word you. It usually takes a second, I pause to rethink, and then I continue by inserting I where I would have said you. The problem with the word you is that it triggers a person's psychological defense mechanisms. For example, if I am talking about being late I may be tempted to describe my actions by saying “when you are late…”. But what this inadvertently does is accuse or suggest that you - the other person, is late, derailing their thought process and invoking them to think “I’m never late”. Suddenly they’ve lost all ability to passively relate to what I am saying.
The real reason I find myself wanting to say you instead of I is that it generalizes some ‘bad’ behavior to everyone, making it seem like a common problem. It is almost painful to replace the word you with I, but by revealing something about myself it creates a hint of authenticity. It’s hard to admit that I have some bad trait, but by saying you when I talk about my negative traits, I create the appearance that this bad trait is universally relatable and take the focus off of myself and onto an imaginary group. The reality is that I am never late, so when someone is telling me about their problems and says “you know when you are late” I first think ‘no not really’, but if they said “you know when I am late” I think about them, and then I can voluntarily relate their experiences to mine. So, when I say you I force someone to think about themselves, which is especially dangerous to a conversation when it can invoke their defense mechanisms, but when I say I, I allow them to think about me, which often leads to their own self-reflection about my experiences. This simple ‘trick’ is incredibly valuable when I deal with defensive people. The only way I can possibly break through their ego and pride is if I break through mine first.
TLDR: When I want someone to actually listen to me, I say I instead of you.
Books I like
I have a very strong preference for books that are old, challenging to read, esoteric, and which do not make sense the first (or even third) time I read them. What I enjoy most about reading is trying to understand what is happening in the author's head rather than what their words are saying. It is especially hard to convey abstract ideas in writing so I believe that even with the best authors there is always deeper meaning or truth than what is evident. Here are some of my favorites:
Zen in the Art of Archery, Eugen Herrigel
The Unfettered Mind, Takuan Soho
Beyond Good and Evil, Friedrich Nietzsche
The New Market Wizards, Jack Schwager
Honorable Mention: Extreme Ownership, Jocko Willink It is hard to overstate how essential this leadership book is. It comes down to this: "There are no bad teams, only bad leaders."
Finally, I didn't want to 'advertise' this, but if you made it this far feel free to check out my very short writings on philosophy.