The hidden ‘replication crisis’ of finance
Are swaths of prestigious financial academic research statistically bogus?
✒ Beware of “p-hacking”, the trick how researchers twist the data to find a superficially compelling but ultimately spurious relationship between variables (in statistics, a p-value is the probability of whether a finding could be because of pure chance).
Just because something is narrowly statistically significant, does not mean that it is actually meaningful.
Campbell Harvey, professor of finance at Duke university, reckons that at least half of the 400 supposedly market-beating strategies identified in top financial journals over the years are bogus.