Tuesday, January 5, 2010

Forecasting Folly

I love thinking about the future and trying to guess what will happen next. I have on my office wall three wall charts with 10 years of history - the S&P 500, Dow Jones, and Gold (just replaced Copper with Gold).  Just looking at these charts shows the folly of forecasting human behavior. 

So what is my prediction for 2010 S&P500 close.  I say somewhere between 1250 and 1300 -  why not say 1296 which is the square of 36.  That is significant since 36 is the number of outcomes of the roll of a dice -   did I say gambling :)

So is it really a "Random Walk Down Wall Street"?  Mathematically I believe it is - Emotionally I don't and that is the real folly and a lifetime of study for a statistician.

Maybe I should replace my charts with global temperature patterns.

PS -  The sum of the integers of 36 =  666

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