Only trouble is that once people find patterns like this, they have a habit of disappearing. Hopefully this one is based on solid enough fundamental market forces that it persists after its publication. It was published in 2013 so we won't know for sure until after 2023.
TLDR: The correlation did go down a bit since publishing but still seems alright.
It took me a few seconds to figure out that you meant the patterns and not the people as the targets for disappearing.
If you can find any way to predict the future price of things, you can make money by performing arbitrage across time (instead of space, which is how people usually think of arbitrage). This (nominally) describes all types of model-informed time-based investment.
The thing with arbitrage is that there's a finite amount of money you can make. If there's a price difference on some cross-listed stock between HKEx and SZSE, you can make money by buying on the cheap one and selling on the pricier one. But, as a side effect of doing so, the price goes up on the cheap one and goes down on the pricier one. There is only a finite amount of stock you can exchange before the price difference approaches zero and you can't make money. The price information has been communicated, and the market has served its function.
The same is true for arbitrage across time. There's only so much money you can spend before the "prices" (more complicated than spacial price differences, because you have to worry about some more complex utility theory to find the expectation value of something in the future) equilibrate and market information has been propagated "through time".
This is why these things "have a habit of disappearing"; every single way of making money via models corresponds to a market inefficiency. Model-based traders are eliminating market inefficiencies and making a cut off the benefit, just like any other good business. The inefficiencies are just more abstract than usual.
So if a model is good, there's no way for it to persist. If it actually predicts something we didn't expect, that corresponds to some inneficiency in the market that some trader can eliminate in exchange for a nice fee.
http://www.philosophicaleconomics.com/2013/12/valuation-and-...
Hah! Grammatically, "they" refers to the people (not the pattern).
IMHO, sometimes these details matter, as in:
"Let's eat grandma!" vs "Let's eat, grandma!"
or
"know your shit" vs "know you're shit"
:)
> "Linguistically, an amphiboly is an ambiguity which results from ambiguous grammar, as opposed to one that results from the ambiguity of words or phrases—that is, Equivocation."
"Fixing" it would probably involve rephrasing to reverse the order of "people" and "pattern" in the sentence or just put all the emphasis on the pattern:
"... these patterns, when discovered, have a habit of disappearing"
Strict correctness regarding subject:verb agreement can, like other grammatical constructs, lead to non-idiomatic, awkward phrasing. Formal "rules" about prepositions are the first related example I can think of. ("... of which I can think" is awful, right?). My point was just to laugh at the ambiguity. (shrug)