Forecasting Error

A.M. asked me to reflect about my  bullish 2011 ecomomic predictions (referring to my 12/23/2010 blog entry).  I should have had some pithy response like "Just think what they would have been, if I hadn't predicted a bullish market". 

His question reminded me that I needed  to score the $100 bet that I annually have with B.S. and schedule the payoff lunch for the winner. 

Just for full transparency - my forecasts were:

Crosstown Shootout - Bearcats   (This was for the 2010/2011 season and the Bearcats won 66 to 46)

Bengals - 8-8  (Oops - who would have known that Andy Dalton would be QB    Season ended 9-7)

S&P - 1500  (Wow - I really blew this one S&P did nothing 1257.61  but at least dividends created a 2.11% return)

Best Long - MSFT (B.S. laughed at this one - and I must admit it is a long shot  MSFT lost $1.95 w/o dividends or -7%)

Best Short _ Netflix  ( who's laughing now :) NFLX lost $106.41 or -61% )

SVP Cincinnati Partners - 22  (technically 21 even though our last new partner's check wasn't received before 12/31)

B.S. Asset Under Mgt - 18M  (I will need B.S. to give me the result at lunch)

Unemployment % - 6%  (8.5%  miserable for all)

So for the investors out there, my stock picks were mixed, the economy forecast was way off, and the S&P prediction was laughable (even the highest high on 5/2/2011 of 1370.58 was not even close - "Sell in May and walk away").   You could say 2011 was a muddle along year. 

But just like measuring happiness - it's always relative to the other person.  So it depends on how bad B.S. predicted that will determine my real forecasting error.

Afterall if two guys are surprised in the woods by a bear (market)  how fast should you run?

Answer:  You only need run faster than the other guy. :)


Postscript (2/23/12):  I happened to see another post of mine (12/16/2009) titled Forecasting Error.  At least I'm not that bad!