Tuesday, January 15, 2019

The Model Thinker #3 : Aristotle's categories

I can argue that Aristotle is the philosopher who inspired all of quantitative investing. Even before the establishment of modern financial markets.

Aristotle created a framework of inquiry that is relevant even today, his ten categories being : Substance, Quantity, Qualification, Relative, Where, When, Being-in-position, Having, Doing and Affection. By inventing these categories, it is possible to classify everything under the sun. Once a set of objects can be categorised, we can start hypothesising about the relationship between these objects.

Naturally, in this modern world driven by data, a good working theory can result in extraordinary profits.

To bring this discussion down to earth, I have been experimenting with folks who show up for my previews. As my quantitative models have been working pretty as of late, I want to see whether the same quantitative discipline can be used to learn more about folks who are passionate about learning about investment. This is an example of one-to-many thinking : can I use the same models I learnt in my investing work in my new job as a trainer ?

The following slide represents my maiden attempts to understand my preview participants better :

I tried to distill the MBTI personality tests into one Mentimeter slide and attempted to figure out what "personality" do preview participants have.

After some crowdsourcing, I have at least one data-point that folks who show up for previews have the ISTJ personality. Introverted, data-driven, and decisive thinkers who otherwise would make great administrators and accountants.

So I can now imagine my course preview as some kind of equity screen that returns participants who belong to the ISTJ personality category.

Of course, just because you have an equity screen with a selected stock does not mean that you can you can profit from it.

Being an ESTJ-turn-ENTJ, communicating with ISTJs needs to be picked up as a skill.

My next step is to subtly change my materials to reflect the needs of my audience. Every assertion should be backed by some data. Every major outcome should come with a series of steps on how to achieve that.

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