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Wallace
Registered: Aug 2003
Posts: 1928 |
01-13-07 11:45 PM
I was wondering who exactly provided the 'Consensus' seen on my usual calendar Econoday, since
most published consensuses (?) are the same, even if CNBC is calling it 'the CNBC consensus'.
Are all the consensers (?) economists ?
Googling I came across another of 'those' papers 'The Returns to Following Currency Forecasts'.
While the paper deals with currency forecasts, actually only a single forecaster, results are possibly
similar for stocks, futures and economic forecasts.
Considering how much such forecasters charge it's likely their customer base are commercials —
correct me if I'm wrong. FX4casts the paper's forecaster's fee is an annual $1250 while another
forecaster I came across Consensus charge $788 for their fx forecast, no idea how they compare.
Consensus Economics has some info about who they collect from and 'accuracy':
http://www.consensuseconomics.com/w...s_forecasts.htm
 Attachment: forecasts.pdf
This has been downloaded 77 time(s).
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nutmeg
Registered: Jan 2007
Posts: 9975 |
01-14-07 01:40 AM
"A room full of smart people are self-reinfircing and come to the wrong conclusion. They are powerful contrary indicators."
"An agreement reached by a group of men is only a comprimise or an average drawn upon many individual thoughts"
From the book "Hedgehogging"
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Voodoo-king
Registered: Apr 2006
Posts: 271 |
01-14-07 02:17 PM
Quote from nutmeg:
[B"An agreement reached by a group of men is only a comprimise or an average drawn upon many individual thoughts"
[/B]
It can be worse, there is a tendency for the conclusions of a group to be more extreme than the average of individual views in the direction already favored by the average of the group. A phenomenon called group polarization from Social psychology.
But most published consensuses is probably just some kind of average of the conlusions reached by many groups?
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nutmeg
Registered: Jan 2007
Posts: 9975 |
01-14-07 02:49 PM
<>
Naw, I don't buy the "many groups" thought. Whatever group happens to have the power at that particular moment in time.
If you were a financial adviser could you sell a homebuilders stock?
The retail buyer is not the herd. They are being led. The financial adviser is not the herd, they are being led. They could be the herd for different reasons. Commissions, reputation, etc. but they would rather be wrong like everybody else and are essentially being led.
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Voodoo-king
Registered: Apr 2006
Posts: 271 |
01-14-07 04:08 PM
Naw, I don't buy the "many groups" thought. Whatever group happens to have the power at that particular moment in time.
Interesting, but different groups are likely dominated by the same kind of people looking at the same kind of data. The conclusions they reach may even be right, but becomes wrong because everyone tries to do the same taking the conclusions to the market.
If you were a financial adviser could you sell a homebuilders stock?
The history leads everyone astray?
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nutmeg
Registered: Jan 2007
Posts: 9975 |
01-14-07 06:09 PM
I can't recall the story exactly but went something like this.
The immigrant father had a news stand on a corner for years, did a fine business and put his son through Harvard. When the son graduated and looked over the newsstand he said "Pop, you order too many papers, don't you realize there is a recession and people are cutting back?"
So the father cut back his order and sure enough, his son was right, he was selling less papers. The father asked his son what to do. The son replied "You should start closing a little earlier, after all your not selling as many papers as you used to". So Pop closed early ordered, sold less papers and we know how that story ends.
Although, you're right history does not lead us astray and may not have been a good analogy but there are self fulfilling results.
This still does not resolve our "consensus" problem and ending up contra contrarian
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