Minetta Tavern. New York. Black Label Burger. Everything about this burger suggests it has a certain quality lacking from most other burgers. The meat is tender, from a sirloin steak, without any of the unpleasant stringiness that might afflict other burgers. It appears that many people agree, judging by the difficult in finding a table here. Yet, at $28, perhaps this burger defies the whole logic of a burger: a relatively inexpensive meal, which is also thoroughly satisfying. With such a high price, any diner is expecting something thoroughly phenomenal, but still, $28 for any burger seems to be expensive.
If we instead focus on price, we might be cajoled into having a Whopper from Burger King. Whilst, it will satisfy my hunger, the meat is of somewhat lesser quality than the black label burger. Then, we need to address the controversial issue of "accessorising" a burger. For some the notion of lettuce and tomato, sullies the whole experience (well, you never make friends with salad?), whilst for me, it breaks up the richness of the beef patty. We haven't even begun to mention the types of cheese or how onions in a burger should be prepared. It also depends on what type of mood you are in. At times, I might be in a MeatLiqor mood, a fashionable burger joint in London. The burgers are fantastic, but the music always seems to loud, and the decor is perhaps not quite what I would term as decorous. Maybe burger sliders are the answer, mini tapas style burgers, offering diners the possibility of sampling several different flavours on a single plate?
At other times, I might eschew the greasiness of beef burger, in favour of a chicken burger (I know this might seem shocking). If there is one thing I find tough to cut out of my diet, it is the humble burger. I tried for one week, and it simply made my fondness for them increase. Or could the chain burger of places by Shake Shack be sufficient to satisfy most diners?
It brings us to the question, which I am asked regularly by friends, who are aware of my love of burgers. What is the best burger? This is a question which I confess has no real answer. Trying to use Google gives approximately 43 million responses. I like burgers, but perhaps not quite enough to sample 43 million burgers, to answer this question. Furthermore, my answer is unlikely to be as other judges. There are also so many degrees of freedom in this question. Does it refer to classic burgers or cheeseburgers etc?
So how do we solve this problem? You could argue it is a somewhat trivial problem and not worth answering (unless you are a burger aficionado, a self confessed burgermeister!). However, it does illustrate a problem which faces everyone, whether in markets or in any form of decision making. We have to make decisions in absence of imperfect information. Markets in particular produce too much information to deal with. The notion that traders can adequately absorb every single piece of relevant news article, whilst somehow dispensing with all the "noise" seems optimistic. Yet, despite this, traders still need to make their best judgement when it comes to putting on positions. For quants, creating systematic trading models, they might have the ability to process more information and use advanced techniques such as news processing. Even in this case, there is a limit to how much information they can aggregate. It is also often the case, that simplicity underpins the best trading strategies. Excessive complexity can often render a trading strategy less robust when it comes to running it out-of-sample.
The best we can do is to find a solution. It might not be optimal, but might be good enough for our purposes. Spend too much time deciding which burger to eat, and you might become hungry. In the meantime, I might start writing a bit more about burgers (and probably eating a bit less of them). If you're interested in reading more about burgers let me know (or if indeed you don't!)
Feeling hungry after reading this? If you are in London this Wednesday evening (10th Dec), come to our Thalesians Christmas dinner, a 3 course meal at La Tasca, a tapas restaurant in Canary Wharf. The dinner will be preceded by a talk on Deedle, a time series library for .NET. Get dinner tickets and details here - a great way to celebrate Christmas and be part of the Thalesians community.