Science Versus QED
Wikipedia defines science as “a systematic enterprise that builds and organizes knowledge in the form of testable explanations and predictions about the universe.”
Wikipedia defines QED as “an initialism of the Latin phrase quod erat demonstrandum, literally meaning “what was to be shown”. Traditionally, the abbreviation is placed at the end of a mathematical proof or philosophical argument to indicate that the proof of the argument is complete, and hence is used with the meaning “thus it has been demonstrated”.
Investors should note that science and QED are, in many respects, essentially opposites. Science recognizes that continuing advancements in knowledge are likely to render science as fluid, and subject to change as understanding advances. On the other hand, QED basically reaffirms the original conclusion, implying that no further study is required.
All of this presents significant challenges to investment strategies. An additional complication comes from a recent, apparent breakdown in the peer review process (see our blog titled Peer Review). Two highly regarded journals, The New England Journal of Medicine and The Lancet, have had to retract studies shortly after publication. This has given rise to questions relating to true research and efforts to advance agendas.
All comments and suggestions are welcome.
Walter J. Kirchberger, CFA