Today’s mystery word: Apophenia

I (Geoff) learned a new word today: Apophenia  It was in an article about investing and the stock-market. Apparently, there’s a whole industry devoted to identifying patterns in the price movements of stocks, then using these to guide when to buy and sell. The writer was emphasising that numerous studies have shown that the everyday ups and downs of a stock, or whole packets of stocks, most often are best regarded as random. So trying to win by picking patterns is a mug’s game.

In other words, if you see ‘patterns’ in a graph of stock movements, most likely you are seeing patterns in randomness, or what in ITNS we call ‘seeing faces in the clouds’.

That’s where apophenia comes in. Apophenia means exactly that: the human tendency to see patterns in random data. Wikipedia describes the coining of the term in relation to schizophrenia, and also says that it has come to be used more generally.

So, in ITNS, we could have added a slogan: When inspecting data–your own or someone else’s–beware apophenia!

Maybe it’s another deeply geek term. Choose when to mutter at a party ‘ugh, that’s only apophenia!’

Geoff

Posted in ITNS, Statistical graphics

Leave a Reply