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Fusion Analysis by V. John Palicka

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13QUANT SYSTEMS

The use of quant (short for quantitative) systems should overcome behavioral bias. However, while they appear to be objective and mechanical, my personal experience with quant funds and their programs is they are likely to be an evolving situation. The programs are updated and revised to give better results, or at least in the hope of better results. It could be that results are not that good, and we are not quite sure if we need more time or if the program is just GIGO (garbage in, garbage out). At this point, we can start to program a system to take “advantage” of new information. However, it could actually just show our prejudices.

Problems with Quant Systems

If we use a low P/B ratio, we may omit many service and technology ...

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