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Comment by acchow | Hacker News Reader

The grandparent's point wasn't that the people doing the analysis are injecting insider information....it's that the data dump you've been presented could be some fancy encoding of insider information.

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How would that work? If Numerai already has insider information, why not just use it directly? Why go to the bother (and risk) of anonymizing and distributing it?

As someone else suggested, think of it like parallel construction in law enforcement: an agency already knows someone is guilty, but they know it from illegal surveillance they can't use in court. So they give a tip to an unsuspecting officer to watch out for a car with a broken tail light at a particular location/time, and in the course of the traffic stop the officer finds drugs in the car, then they claim that's how they found out (despite the officer only being there because they already knew).

Plausible deniability.

There would be none if they were aware the information they hand out contains insider info.

How would you prove it? It's just an anonymous list of features to train a model.

I think it's unlikely that insider information comes in some nicely formatted dataset with 21 features week in and week out. I think of insider information as usually being a one-off tip that a company is going to take a particular action before they make that information public. This feels more like prosaic financial data. (But I'm not in finance so maybe my perceptions are way off!)

Hence why I phrased it "encodes insider information"

So you get your tip, and you generate a data set that will result in some data analyst getting the conclusion you want.

No, grandparent's point was the the AI data dump is misdirection from the actual trading logic.

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