Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Hawkmoon who wrote (955)	11/26/2000 11:12:39 AM
From: Tommaso	Respond to of 74559

Some years ago I went to some trouble to learn to use LISP, a simple threaded computer language, to try to set up a program to predict changes in various valuations. I included equations or statements such as, that when the dollar goes up gold (probably) goes down, when stocks go down bonds (often) go up. I tried to estimate connections between various changing evaluations. Then I put in current valuations. Every time I ran it, I got different results. I thought there was something wrong with my programming. Then I came to realize that, like the weather, economic intereactions are so complex that they are impossible to predict over any extended period of time. All you can say is that things will go up and down. Which I already knew, but it did seem interesting to go to a lot of trouble to construct a model that produced not exactly random results, but in fact imitated the unpredictability. I guess what it did show is that economic values tend to oscillate around norms. One of these norms is the famous P/E ratio of about 12-15 for stocks. And that implies that we may well oscillate not only down to that ratio, but below it. A dreary possibility for the stock markets.