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Pastimes : Let's Talk About Our Feelings!!! -- Ignore unavailable to you. Want to Upgrade?

To: epicure who wrote (57350)	10/6/1999 9:21:00 AM
From: nihil	Read Replies (1) \| Respond to of 108807

You make this many equation model, see, and test it against the past. Then you plug in your best guesses of the future, trying to remember how you guessed it. Then you run your little engine and see what pops out -- then you wiggle your future assumptions a little bit -- lots of times -- sensitivity analysis -- and every month you do the whole damned thing again, correcting where your future guess have turned out wrong, and then you measure your coefficients again, and you repeat this for 20 years and your come with a model that is pretty reliable. Three models make money projecting the future: S&P-DRI, Fed Reserve, and Macroeconomic Modeling. They beat the amateurs consistently, and if you rent the model you can tune it to your hunches and see if you can beat the pro's. Every once in a while a model crashes really bad and has to be shot. But kids are always pasting new ones together. I remember 25 years ago I forecast employment of scientists and engineers for three oil price scenarios. I showed that whether or not we had a synthetic petroleum and gas program we needed about the same number of scientists and engineers in the energy industries. The NSF used the result to murder a multibillion dollar scholarship program and prevented lifetime unemployment for vast numbers of engineers and geologists. The interesting thing, was that among all of the engineers and scientists in the program, there were dozens of different opinions. Some wanted nuclear, some solar, some didn't give a damn. When you have to slap the numbers down, and argue over them, it doesn't matter what people want. It's called "science." If you wish, I can give you some stock tips that never yet have failed. We are very careful not to underestimate the probability of the extremes. Those Connecticut guys are really bush (Nobels and all). Back to the old drawing board.