We want the $$ to fall and bond yields to rise, DOW 15000!!!

Discussion in 'Economics' started by citizennobody, Nov 2, 2003.

  1. I consider myself MUCH more openminded than most but I am having a hard time swallowing that an individual has built an economic model that essentially explains society in a 2 generational accumulation then distribution of market momentum through war and inflation...
     
    #41     Nov 6, 2003
  2. jmcgoblue

    jmcgoblue

    People attempting to analyze & predict the future are a big reason that there is money to be made in the capital markets, IMO. It's pretty funny that in his first post, citizennobody says -

    "I am almost finished with my Masters of Science in Economics at UTEP and after years of trading along with my current research I boldly make this prediction. I know I am right..."

    Then later he claims not to have a big ego. Saying "I know I am right" about events that may or may not take place in the future implies a big ego....sorry.

    You can analyze the past all you want, but it's pretty obvious that the future is dependent largely on a mix of events that have not yet taken place...so any accuracy in predictions are a result of pure luck.

    I don't completely discount economic analysis, I even have a degree in the subject so I know a little about the theory. I think economic analysis can be used effectively to make very broad predictions, but it's useless when trying to predict specific events.

    Having said that, I do follow Steven Roach...he's about as pragmatic an economist there is

    http://www.morganstanley.com/GEFdata/digests/20031107-fri.html
     
    #42     Nov 7, 2003
  3. I love all of you naysayers on this site. You heckle then, almost never give an alternative viewpoint, misquote current economic theory, then regurgitate the thoughts of someone else.

    First, I have a hard time believing any type of analysis that comes out a major brokerage house due to conflicts of duty. I worked for Merrill, BTW, sweet cheeks.

    Second, I simply presented another possible scenario to current opinion. Do with it what you will but the last time I made a major trading decision I liked having access to multiple scenarios and outcome analysis for strategic positioning possibilities.

    Third, what is Steven Roachs record...?


    NNNNEEEEXXXXTTTT!!!!!!!!!!
     
    #43     Nov 7, 2003
  4. jmcgoblue

    jmcgoblue

    Perhaps you should actually think about what you are reading, rather than just lashing out. That's another sign of a large ego. ;)

    If you will carefully re-read my last post, you will see that I did give an alternative viewpoint...You cannot predict specific future events with any confidence, because they are dependent on other events that haven't yet occurred. It's like trying to predict where the evolutionary process will have us in 2 million years.

    On your other points -

    I don't care where you say you worked before. Did I ask? Does the fact that you say you worked for Merrill mean something? Does that make you an 'insider' who should be listened to?

    You don't need to have worked for a brokerage to know that conflicts of interest occur. But if you'd take any time to read Roach's commentary you'd see that he hasn't exactly been promoting investment in the capital markets over the past several years. Just because an economist works for a brokerage doesn't mean he's going to bias his analysis.

    What is his record? I have no idea. I know he was warning of a bubble in '98 & '99 when most everyone else was speaking of a "New Economy" & Dow 40,000. Besides, I don't really care what his record is, I look to experts for analysis, not advice.

    Here are some nervous economists...

    http://www.foulds2000.freeserve.co.uk/economists.htm
     
    #44     Nov 7, 2003
  5. I was attempting to give a different viewpoint of market dynamics, not the infinite regress problem of developing generative and auxiliary assumptions for the model building process. You are correct I shot from the hip with my model and made assumptions that are known to be false, "a priori", for simplification purposes. There were other consequential outcomes to my theory but I chose to post this one. If you want to discredit my post on the assumptions I made, GO AHEAD. But I am sure that you always possess all extant information when you make a decision hence, your trading must be spectacular given the fact that you never just have to cross your fingers and pray...!!!
     
    #45     Nov 7, 2003
  6. jmcgoblue

    jmcgoblue

    You actually would have avoided most of this flaming if you hadn't been so bold in your first post, saying "I know I'm right". As it's been said before, people in the trading community are put off by bold predictions. And I wasn't trying to discredit your predictions, just the assurance that the predictions are correct.

    As for my own trading, I'm wrong about 55-60% of the time, and I am SURE that I can't predict the future, so I don't even try. But all of this is outside the scope of this thread, so I'll leave it at that.
     
    #46     Nov 7, 2003
  7. Well forgive my board etiquette. And maybe, just maybe, I might have been baiting a little???
     
    #47     Nov 7, 2003
  8. jwlabno

    jwlabno

    If you see a shooter standing 1 m away from the target and you make a prediction that he will hit the bullseye with all his shots, you can be fairly certain about this prediction of the future events. If you say that he will hit the bullseye at least once while he is 10m away from the target, there is much less chance that the prediction will come true. And even less if you predict that he will do it 5 days in a row.

    The further we go into the future with our predictions, and the more specific we are, the less chance of them to be correct. As the time passes the number of possible future outcomes increases rapidly. There is a limited number of events that can affect predictions in the above example. Weather, shooter's health, some external distractions. There is far more events that affect the economy and where it will go.

    Therefore, the macro scale or the big picture analysis can only be successfully applied to the past events, not the future. I would risk an opinion that there is no such thing like big picture when considering the future. Even those with power to affect the economic future, with power to manipulate it, can not factor in all effects of their actions. Your dow 15000 prediction may well come true, for the exact reasons you have given, or for completely different reasons. Right now many interpret the economic data to predict doom rather than boom. If i had to choose between one or the other, i'd go for crash - the prices drop much easier than rise.

    But as a trader I am not a good audience to receive or discuss your thesis. Trader's efforts go into reducing the number of possible outcomes, or increasing the odds of their trades. By placing a trade, in a way, traders make a prediction that their traded instrument will move in the chosed direction, but the future considered, even in case of trend trading is relatively short. Day trading and swing trading practically deals with present, and the future predicted in terms of hours, days or even weeks has much higher probability of happening than if you think in terms of years or decades.

    So I am sceptical about your prediction, not so much about whether it will or won;t happen, but about the degree of certainty you attach to it. There is also a fact that it doesn't really matter to me, and I suspect to most traders, whether it will go up or down. If it goes up I will be long, if goes down, I'll be short, whether the big picture is bullish or bearish in the long term is of no great importance to me, it is the microscale that provides the income and pays my bills.

    So sorry if I couldn't respond with something like "but whatabout the effect of xxxx on yyyy, wouldn't this mean that your assumption zzzz is incorrect?" or similar. There is just too many variables to even roughly approximate where the markets will be in a year or two or more.
     
    #48     Nov 8, 2003
  9. Good point and like I said I was simply posting an opposing viewpoint to current opinion. I believe I am right and you can believe what you will. Of course things have to happen for my prediction to come true thats why it is just a prediction...
     
    #49     Nov 8, 2003
  10. Electron -- it's still a myth. Just because 90% of traders can't do it doesn't mean it can't happen. That's like saying that it's impossible to make the NBA -- if you consider all of the high school players who want to play in the NBA someday -- I would imagine it's more than 90% who don't make it. Yes -- the percentage is low, but it's possible.
     
    #50     Nov 8, 2003