Bayesian Statistics + factor models = Alpha Mojo

Bayesian statistics can be used to combine qualitative investment ideas with quantitative financial models in a objective manner. Chincarini & Kim refer to Bayesian statics, along with the use of leverage, and market neutral exposure, as a source of "Alpha Mojo." We will talk about Bayesian statistics in more detail later, after we have finished building our factor model, but I thought readers might enjoy the following links to articles on Bayesian statistics. Both are written by Eliezer Yudkowsky, who is a Research Fellow at The Singularity Institute for Artificial Intelligence. Yudkowsky also wrote Creating Friendly AI 1.0, which people with an interest in artificial intelligence and The Singularity will find interesting.