The Real Numbers | Home Economics Journal
The Bayesian Update — How Confident Can We Be?
Prior beta
+1.03
4 baseline quarters. Stocks and gold moved together.
Test beta
-0.36
6 test quarters. Relationship flipped.
Posterior beta
+0.79
Honest update. Prior still has weight.
Bayes Factor
1.13
Real and directional. More data will sharpen this.
Beta = proportionality coefficient between stock and gold annual gains. n=4 baseline, n=6 test.
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