I do pay attention MOO - your words do not fall on deaf ears - I don't remember you specifically telling me the model - perhaps my memory is failing - too much saki.
But right after I described the secret TA model with an equation, you just wrote an irrelevant comment about FA. The same thing happened last time...
John Henry
Who is John Henry?
Well I thought you were in the USA now and investing in our country now no? Is soros and buffet still predicting a strong dollar collapse soon? In my gut I hate going against the old guys sometimes because later on you say - wow that old fart really knew what he was talking about. I still dont believe a dollar fall necessarily means a gold rise though.
I am in the US, but most of my money is in Aus and I bought the Australian Dollar when it was cheap. This year the US dollar is rising and I think likely to continue rising until the Fed stops raising rates. At that point it could resume its fall, or a recession (very likely I think) could instead close the trade deficit a bit. The USD came down tremendously in the years from 2002 till the beginning of this year. Look at the chart and see what happened. Gold has risen from $250 a few years ago to more than $450. You have all these opinions that don't match the facts.
Ok fundamentally what makes the market in general go up - market participants being added right? With world population growth levels smoothing out and baby boomers retiring - what effect do you see this having on the long term trend of the market? The pyramid scheme falls when you dont have an ever growing supply of new suckers right? It doesn't go down, it totally collapses right?
In the long run stocks will rise with increasing GDP and the profit share of GDP. In the medium term with changes in the interest rate. But I am looking in my post at TA, not FA. Just looking at the behavior of the series. I do think a lot about FA too of coruse, but that is not "the model"...
Ok, we know what GOOG did from jan 1st to sept 23 - what "tools" in combination most closely matched the reality - that is what you would seem to be uniquely qualified to know - do any mix and match of models predict what happened with GOOG? If not - why do you think so? I am thinking you probably have lots of models on your computer you can mix and match to see which best mesh predicted what happened with GOOG up to this point. You have the ability to make better and better refinements.
I don't have a forecasting model or use one. All the TA methods I use look for turning points and oversold/undersold. Also there are some well known longer cycles and based on resistance and support levels, gaps, and Bollinger Bands people can guess where a stock will go to. But this isn't forecasting really the probabilities are much too fuzzy.
What benchmarks and timeframes are you going to use to say wether your method was a success or failure over just sticking all the money in a big total stock market mutual fund as Mr. Bogle recommends?
The test is alpha - risk adjusted excess return. And I have a slightly positive alpha over the entire time I have been investing and in the last three years a VERY positive alpha and rising. So I must be doing something right :) I've posted a chart of that too. Jay has excess return this year I am not sure about past years. Would be interesting to check the data. I measure return against the MSCI Gross World Index as that is an appropriate benchmark.
Well we start getting back into ART again, and MOO I want to bring as much science into our investing as possible and get away from as much art as possible - doesn't the academic in you yearn for the same goal? When you have to start "STRETCHING" things doesn't your faith start to wane?
What I am saying is that the Elliott Wave theory is not as precise as Prechter or others like to make out. That is my "scientific" assessment of it. But it is much more useful than the naysayers would say. They try to program it precisely in a simple algorithmic way, fail and then say it is no good. This professor at RPI - Selmer Bringsjord argues that the human brain is not a computer in the traditional algorithmic sense, but something beyond that. Maybe our brains can do things that current computers cannot.
Past history is no gaurantee that tomorrow you will wake up - the bible said something like just because you have all those days you did good in your past - does not mean tomorrow is promised you eh? People are bad judges of Risk I think. See I won't fly planes anymore, but I love to take buses - but in stop and go traffic with oxygen tanks that was a bad idea recently.
Thinking stochastically and probabilistically is hard. You want deterministic rules, there are none.
Moo, I just am gonna have to disagree with you there - over on the real estate thread I posted how this smart MSFT guy and smart portland oregon guy thought they could be successful anywhere - but it indeed did matter what the rednecks did - and the rednecks made them broke with thier backward business thieving ways.
Yes and if all those guys weren't there the time series would be very different... You and other people just keep throwing up FA reasons why some TA method won't work. None of those arguments make any sense. What it shows is you don't understand the idea of time series analysis. That's OK, heaps of physicists etc. out there don't either. They believe in determinism and don't understand a stochastic model.
I don't think there is much point to discussing it further. Seems you are just thinking on a completely different wave length to me...
David |
