Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: AC Flyer who wrote (35914)	7/10/2003 6:08:04 PM
From: gumnam	Read Replies (1) of 74559

Hi AC You are absolutely right - people do tend to use linear extrapolation way too often in life and in markets. Just like you said that " Laggards will have missed a 40% move in Nasdaq and maybe 30% in S&P by year end". YTD Nasdaq is up 25% (roughly) and S&P is up 15%- So you projected another 15% in Nasdaq and 15% in S&P till year end. That is just another example of linear interpolation. And then you project this line all the way to 2009 maybe 2012. WOW 6-9 more years of projections. That is quite incredible. I do not know "What is it about human brain that insists on projecting all trends linearly to infinity". Cheers Anshu

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