I used to mention the PDCA cycle (Plan Do Check Action) from Shewart/Deming quality gurus. Now a guy Dr Sloan has renamed it with an easy acronym since it is IDEA which stands for: Induction Deduction Evaluation and Action. Not a bad idea indeed
I think it is fair to say that you are freaking everybody out on this board with your nonsense posts. Who cares what you "used to post" about some obscure bong smoke theory. Frankly, it is starting to get old.
Are you the center of the World ? It seems not. Some people are interested some people aren't. If you are not interested you are not obliged to read or you are willing to make some harm to yourself: so tell me do you have some psychological problem ? After all we are on the psy board I'm sure some volunteers would like to help you, as for me I won't I'm not a psychiatrist
Very funny, an ignorant who talks about what he doesn't know, if you want to get out of your own smoke I find an article for you about the IDEA cycle: http://www.danielsloan.com/articlesframe.html IDEA Cycle Articles During the 1970s and 1980s an ageless improvement cycle made headlines under the banner, quality improvement.(1) Little was said about the thinker who invented it 2500 years ago. Less was said about the Bell Labs physicist, Walter Shewhart, whose 1932 text - Economic Control of Quality of Manufactured Product - rejuvenated the idea of quality.(2) In 1924 Shewhart invented the control chart that updated Aristotle's originial improvement cycle. P.S.: I hope that after that you will try to cure your mental...
This other one uses PDCA theory for controlling portfolio managers I posted in a connected thread (http://www.northinfo.com/papers/pdf/Philips.pdf). PDCA, six sigma and things like that are spreading out of industries to services like health and software industries (although it is hidden through other acronyms like RUP acronym of Rational Unified Process from Rational Software and since IBM has just bought them you can be sure that it will be spread), it is a new trend in methodology that has touched some services - whereas it is well known already in industries - and so it will touch finance in some years. I bet that in a few years a fund manager that doesn't know what PDCA is - because it is just a logical suite to VAR concept launched by JP Morgan - will have some difficulty to get a job huhu ! So Mr Center of Universe, if you are not interested, don't bother others with your dictatorship : you want to shut me to speak about that ? Give a reason apart from a craziness in your head huh ? P.S.: for the others, you see this guy is a french, so being french doesn't garantee against stupidity (like me also but at least I am conscious) hee hee !
Why is it qualified as Universal ? Because it is a very old idea (as mentioned in the article above) since for the greeks it encompasses how the Universe and all life evolve. Let's take an example : intelligence. Here's an article that was published in scientific american that tried to define intelligence: http://faculty.washington.edu/wcalvin/bk8/bk8ch2.htm "IQ is certainly one fascinating aspect of intelligence, but it doesnât subsume the others; we shouldnât make the mistake of trying to reduce the subject of intelligence to a simple number on a rating scale. That would be like characterizing a football game in terms of one statistic, say the percent of passes completed. Many complex behaviors in animals are innate: no learning is needed as theyâre wired in from birth). Such behaviors tend to be inflexible and often difficult to perform at will, such as sneezing and blushing. These stereotyped movement patterns exhibit no more insight or understanding of purpose than does a computer program. Theyâre a set piece. Both innate and learned behaviors can be long and complex. Consider, for example, the performance of an idiot savant, a person with enormous detailed recall but poor ability to make good use of the recollected information in a new context, by breaking the pattern into meaningful parts and recombining them. Whale song and insect nest building may be equally unintelligent." So intelligence could not be reduced either as a number or as a complex behavior or even an accumulation of knowledge, rather "intelligence is about the PROCESS of improvising and polishing on the timescale of thought and action." PDCA or IDEA cycle is the PRACTICAL PROCESS to achieve that. Many people just recites mantra by setting goals and hoping that it will happen one day this is not the way to achieve the desired result with high probability. If you read the story how I improved myself in a matter that I hated http://www.elitetrader.com/vb/showthread.php?s=&threadid=19445 I can add that it is just this kind of process I followed - and that I always follow for many other things like trading also of course - and the point I would like to insist upon is this : DON'T SET A GOAL, JUST CONCENTRATE ON THE PROCESS TO DO AS BEST AS YOU CAN, GIVE YOU TIME BECAUSE IF YOU DON'T YOU WILL BURN. INSTEAD OF GOALS SETTING RATHER CONSIDER STAGES AT SOME INTERVALS AND AT THE END OF EACH INTERVAL APPLY THE PDCA RULES that is to say CHECK AND ACT - to correct if you made a mistake. If you don't set any goal you can go as far as you can - and sometimes be among the bests but that doesn't matter what matters is that you have put the best of yourself : you are working for you not for others - and that will never end whereas if you set a goal, if it is too easy you will stop to progress, if it is too high you will get discouraged. Unhappily schools form almost only idiot savants since they will never learn you about PDCA. Learning how to learn is all about real intelligence.
Doesn't this remind also of something about trading ? "let your profit run don't set target use trailing stop..." so you see PDCA is just a framework for many things. It is only when you master enough that you can set goals without burning. Today I master enough to do so (because I have evolved and don't use any more the "blind" stochastic framework) but when I began I was incapable of setting any goal so I didn't do it that's why I said the other day that if you use a simple stochastic framework it is stupid to set fictitious risk/reward since you can't predict target in this framework.
Now PDCA is just a matrix, you must fill it concretly and correctly to follow a good path. And one of the reason of failure I see in novices is that they think it is a pure intellectual task whereas it requires pavlov reflex which is somehow stupid but necessary. It's like learning to walk as a child. it must become quoting the article above "stereotyped movement patterns" which "exhibit no more insight or understanding of purpose than does a computer program. Theyâre a set piece." No intelligence here required but repetition repetition and repetition. See what I said about sport http://www.elitetrader.com/vb/showthread.php?s=&threadid=19390 "What I wanted to pinpoint is that some sport is even more suitable to develop ability that casino gambling. I see many people refer to poker etc. I think that you must also develop physical reflex and observation not just intellectual or psychological. In fact by developping enough reflex you will lower the burden of the brain because some part will become automatism so that your psychic can better concentrate. If you lack reflex you will have to compensate with intellect and that takes too much time and when you trade you must not think too much you must act (think when you drive it is the same thing). When you play tennis table for example there are patterns, you acquire reflex and reflex is important for real trading whereas many people think it is just intellectual it is also physical. Many novices failed and complain that they don't succeed it is because they are lazy to train: they want too much frill of action and pay the cost of it. You must train physically as to shoot the ball or the market in a training environment. I said that because I laughed the other day when someone sent me an email saying: "your forecast was perfect to the pinpoint but I put my order 5 point below to be sure" so he missed the ball hee hee ! That's the kind of guy who lacks physical training."
KAIZEN "Continuous improvement, described by Imai. Basically it is a management-philosophie. It results in an <B>attitude of <FONT COLOR="RED">continuous improvement</FONT></B> whereas BPR (see BPR) is the quite opposite : radical redesign of the existing procedures. " So in spirit Kaizen is just the oriental translation of PDCA - as I quoted above PDCA itself is the modern version of Aristotle circle. I have underlined what is really important in PDCA or KAIZEN: CONTINUOUS IMPROVMENT and operationally it means what I said: "DON'T SET A GOAL, JUST CONCENTRATE ON THE PROCESS TO DO AS BEST AS YOU CAN, GIVE YOU TIME BECAUSE IF YOU DON'T YOU WILL BURN. INSTEAD OF GOALS SETTING RATHER CONSIDER STAGES AT SOME INTERVALS AND AT THE END OF EACH INTERVAL APPLY THE PDCA RULES that is to say CHECK AND ACT - to correct if you made a mistake." In fact Shewart and Deming failed - according to themselves not according to me - to really implement PDCA in USA and Europe (except in military field in fact Quality method was said to be so efficient that it was classified as defense secret for years according to a chief engineer of industrial quality author of a book in that field) whereas it originated from US since both were americans. The reasons they give were that 1°) Engineers did take PDCA as only statistical stuffs instead of a whole framework so that the CEOs or at least the head of Management weren't involved in the process (whereas in Japan the CEOs have to follow at least a 3 days seminars to get to the spirit - but also some statistical stuff - and the spirit was then impulsed from the management down to the workers) and 2°) that it was against their mentality of short term thinking and setting goals for everything which is against the "CONTINIOUS" spirit. Today PDCA is making a come back with a little more success but it has still to fight the occidental spirit. And to show the importance that there is still big misunderstanding of this spirit, I will consider the slogan that you can hear about the "Zero default, zero paper, zero tolerance etc...". This is the idea that people generally have of Quality Control because slogan is shortcut thinking and is well propagated and as I said this suits well with the occidental mentality. BUT IT DOESN'T FIT WITH THE ORIGINAL SPIRIT OF SHEWART QUALITY !!! According to Deming, the spiritual son of Shewart - Deming was the Guy who was called by Mac Carthur to rebuild Japan Quality Management and in fact the devastated Japanese industries after WWII - , this slogan known as "the seven zeros" has conducted to HUGE MISINTERPRETATION OF QUALITY PHILOSOPHY in the whole occidental industries. He even dared say that it has conducted to the opposite of the expected results (that is to say big waste of human, money and ecological ressources). He was a huge critics of Quality Circle that were spreading all over europe and usa because he said that it was useless since they just didn't understand the basic spirit of Quality Management. So for him Quality Circle was as useful as the 2 cents philosophical debate in a cafe because there was nothing operational whereas Quality Circle implemented in Japan were operational. About the origin of the seven zeros I have a personal story which is rather a scoop (you will never learn this in any quality book history hee hee) because it is something I learned from a friend of Deming who had also been a collegue of Philippe Crosby at ATT (Philippe Crosby is the maker of the "seven zeros" ). He told me the reason why Philippe Crosby has created the "zero" stuffs was because he wasn't a statistician and had some difficulty to grasp the concept. So Crosby created a metaphore but the metaphore didn't encompass the spirit of Shewart and Deming PDCA and when it spreads it was devastating according to Deming. At the end of his life Deming became very popular in US industries but for him it was too late and still very difficult to fight this "zero tolerance" spirit and substitute it with the "continious improvment" spirit. The friend of Deming told me 15 years ago that the spirit of continious improvment was also disappearing in Japan that the people who taught that spirit were getting old and that there were no successors and that Japan will then lose its economical supremacy. At that time Japan was still apparently economically strong so I didn't believe him but it seems that he was right finally. If this seems too far from trading and if you don't understand the impact of these two opposite spirits think about novices who are afraid to make a loss in trading and look for "zero loss" recipe: these people will fail in trading. That doesn't mean that it is not possible to achieve something near the perfection at term, it means you musn't look for that straight away. One can even generalise to nazism philosophy which pretends to be able to get "zero default" for human beings and the result has and will be a waste of human life and even the elimination of it since in their project the best way to achieve this "perfectness" is to replace human by robots. The other day I talked about Brezinsky on geopolitics, I just said that apart from politics he has also some goals about human race and I can tell that it is just that: for him replacing human race by robots constitutes a progress. From the point of view of those who consider that human beings are just assets to serve them and not free human beings this is somehow rational, from the point of view of human beings I will let you see yourself.