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Old 06-01-2017, 12:19 PM
 
5,902 posts, read 4,399,579 times
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Quote:
Originally Posted by SportyandMisty View Post
The Gallup poll results from their standard question, "do you think the economy is getting better?" Note this elicits people's opinions rather than analyzing hard economic data and indicators.

Here's some data for the past decade:


Annnnd that's a graph form representation of why I avoid and am disgusted by politics.
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Old 06-01-2017, 12:23 PM
 
5,902 posts, read 4,399,579 times
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Quote:
Originally Posted by JPrzybylski07 View Post
The only intelligent thing one can do is connect the dots looking backwards... Just because there is a trend today doesn't mean there will be tomorrow, bull today can be bear tomorrow.
That's the paradox of risk. We use the past to predict the future but risk is an event where the future is different from the past. The trend only is....until it isn't.

I was watching mad money with Cramer and his "call" to buy a stock that was up x percent in the last year. Before I turned his bad camera angles and annoying voice off, my thought was " Why would I use my rear view Mirror to drive toward? "
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Old 06-02-2017, 12:27 AM
 
30,873 posts, read 36,815,390 times
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Quote:
Originally Posted by Ro2113 View Post
And this is why I feel that this is more of a political debate than an economic one. Hard core partisanship is a disease that must cured.
Agreed. And Trump isn't really even a principled conservative.
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Old 06-02-2017, 07:14 AM
 
1,519 posts, read 1,205,034 times
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Quote:
Originally Posted by Thatsright19 View Post
That's the paradox of risk. We use the past to predict the future but risk is an event where the future is different from the past. The trend only is....until it isn't.

I was watching mad money with Cramer and his "call" to buy a stock that was up x percent in the last year. Before I turned his bad camera angles and annoying voice off, my thought was " Why would I use my rear view Mirror to drive toward? "
I think the quote about only being able to connect the dots looking backwards is just that, that you can only make sense of what has already happened. It doesn't mean just because you connected the dots looking backwards that you can all of a sudden connect the dots looking forward.......
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Old 06-02-2017, 07:24 AM
 
4,224 posts, read 2,991,709 times
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The economy unfolds over time alright, just not according to any of the rules that neurotic blowhards try to postulate. It all tends less to be random and more to be chaotic though, so with enough knowledge, you can come up with some decent views of the near term future.
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Old 06-02-2017, 09:48 AM
 
Location: Paranoid State
13,044 posts, read 13,808,417 times
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Quote:
Originally Posted by Thatsright19 View Post
Why would I use my rear view Mirror to drive toward? "
Well, modern portfolio theory, the efficient markets hypothesis and the capital asset pricing model certainly agree with you and don't use the rear view mirror.

Extensions of CAPM to include other elements -- so called "smart beta" and "factor based portfolios" sometimes do include momentum (that is, looking in your rear view mirror to drive forward). Academic research shows stocks with strong recent performance have earned a return above stocks with weak recent performance, even after adjusting for risk, market capitalization, volatility, book/price (value), share price, profitability and how the firm uses its capital (conservatively vs. aggressively).

For example, you can take a zero dollar portfolio, where you are simultaneously short recently poor performing stocks and long recently good performing stocks -- that is, follow momentum investing -- and the value of that portfolio goes up over time from zero to a positive number, even adjusting for the other factors.

And, of course, even though there are positive returns to momentum portfolio exposures, I don't think I'd invest in a single stock based on momentum.

It is an area of active research, of course.
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Old 06-02-2017, 03:45 PM
 
4,285 posts, read 10,735,110 times
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Better then what? The economic crisis is long over and the economy has been in solid shape since 2014. It's been very strong for over 18 months. I would guess it's probably at or near it's peak, but hopefully it can maintain itself at this level for a while longer
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