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Posts Tagged ‘predictions’

The Perils of Prediction

The Perils of Prediction 

Courtesy of Charles Hugh Smith, Of Two Minds 

Fortune teller wheel

Nobody knows the future, so the best we can do is strive for an open mind and flexibility in our thinking and responses. 

In 1904, the "fact-based" consensus was that rising prosperity would stretch into the future as far as imagination allowed. The prosperity was so widespread that war, it seemed, had been abolished as bad for business.

In 1904, Imperial Tsarist Russia, though suffering from the usual spot of bother now and again, was stable and enduring. In 1904, Great Britain viewed France as its continental rival.

Ten years later, advanced, peaceful, hopeful Europe stumbled into the Great War, and three years into that war Tsarist Russia fell to revolution.

In 1928, permanent prosperity was again the consensus. Two years later, that hope was reduced to ashes.

In 1930, Germany and Japan were economically troubled, as were the other great nations of the world, but neither were seen as threatening. Less than ten years later, the two nations had declared war on the world.

In 1980, fear of a sudden massive Soviet tank attack on West Germany sparked a series of "what if" books and a push for short-range nuclear-armed missiles in Germany--a U.S. plan which galvanized the Western European peace movement.

Ten years later, the Soviet Empire had crumbled into dust and abandoned gulags.

In 1975, scholars and pundits confidently declared that the "cult of Mao" which fueled China’s Culutral Revolution was so entrenched, so pervasive and so central to China’s Communist regime that would outlast Mao the mortal and thus into the next century.

Three years later, Mao was dead and the Gang of Four lost power. Ten years after 1975, when the Cult of Mao was universally viewed as a permanent feature of China, that nation was four years into the state-controlled, limited-capitalist model of engaging the world that created its present-day pre-eminence.

I think you see my point: consensus predictions of what the future holds are generally wrong. The consensus in the U.S. about the world of 2020 is that it won’t be much different from the world of 2010. All the actuarial tables of Social Security run to 2040 and beyond, as if the road ahead will be an extension of the past sixty years of American global dominance and credit-based prosperity.

That alone tells me 2020 will…
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How your brain remembers the future

Déjà vu, all over again.

How your brain remembers the future

Image Of Thinking Man's Brain Through Bowler Hat

By NewScientist

IT’S like remembering the future. Our brain generates predictions of likely visual inputs so it can focus on dealing with the unexpected.

Predictable sights trigger less brain activity than unfamiliar stimuli, bolstering the view that the brain is not merely reactive, but generates predictions based on the recent past. "The brain expects to see things and really just wants to confirm it now and again," says Lars Muckli at the University of Glasgow, UK.

[...]

The finding supports the "Bayesian brain" theory, which sees the brain as making predictions about the world which it updates when new information comes in.


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Few Called Market Turn, Fewer Predict It Will Last

H/t to Pragcap.

Few Called Market Turn, Fewer Predict It Will Last

market turn, time.comBy AP / TIM PARADIS, courtesy of TIME

(NEW YORK) — Few analysts forecast this year’s remarkable stock market rebound as major indexes were plunging to 12-year lows last March. Now, with most experts predicting the pace of stocks’ gains will slow in 2010, there’s reason to believe they will be proven correct.

Stocks began the dramatic turnaround in March after Citigroup Inc. and other big banks said they were making money again, and then climbed at a fairly steady pace as signs of an economic recovery from the Great Recession became more pronounced.

Investor fears about a potential financial system collapse played a big role in the early year slump in stocks. Once it was clear that wasn’t going to happen, the Standard & Poor’s 500 index roared back 64.8 percent from its early March low, the biggest move since the Depression. For the full year, the index rose 23.5 percent, its best showing since 2003.

But sustaining that momentum in the new year likely would require a big drop in the unemployment rate and strong corporate profit gains, along with stable borrowing costs--a combination few analysts are forecasting.

"The easy money has been made already," said Bill Stone, chief investment strategist for PNC Wealth Management. "You’re not going to see another 65 percent move in the next nine months."

In the last day of the year, more signs of healing first pleased investors, then had them concerned about the economy’s ability to thrive without government help. Light trading volume exaggerated the market’s moves, sending the Dow Jones industrial average down 120.46, or 1.1 percent, to 10,428.05.

The year’s stats tell an incredible story across the financial markets:…

Stock market gains often come months before economic recoveries are confirmed. That’s because investors tend to bet on how they think business conditions will be six to nine months in the future. In downturns during the past 60 years, the S&P 500 index hit its bottom an average of four months before a recession ended and about nine months before unemployment reached its peak…

Ron Kiddoo, chief investment officer at Cozad Asset Management in Champaign, Ill., said the market can continue its rally through 2010 only if investors see that companies are again hiring, bringing the unemployment rate down for its present 10…
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GOLDMAN SACHS 2010 INVESTMENT OUTLOOK – THE BULL WILL CONTINUE

GOLDMAN SACHS 2010 INVESTMENT OUTLOOK – THE BULL WILL CONTINUE

Courtesy of The Pragmatic Capitalist

Fortune's Andy Serwer Interviews Goldman Sachs' Lloyd Blankfein

The rally is going to continue into 2010 according to Wall Street’s most influential bank   (Please see here for Goldman’s top 10 trades of 2010). Analysts at Goldman Sachs Europe and America have released their full year 2010 estimates and they are very bullish about the upcoming year.

Goldman sees very low rates, stronger than expected earnings, strong commodity demand and investor reallocation driving prices higher.  Goldman sees no rate changes through 2011 – one of the most accommodative outlooks of any bank we have covered.  Stronger than expected revenue growth and continued margin expansion will result in 15%+ equity returns in the upcoming year.  Although they see a continuation in the rally some moderation is expected.  As we previously mentioned, their analysts expect many similarities to 2004.  David Kostin wrote:

“Continued profit margin resiliency from prior aggressive cost reductions should drive strong returns in early 2010 and push the S&P 500 towards 1,300.”

Their analysts in Europe are even more bullish.  They see the DJ STOXX 600 rising 20% to 300 by the end of 2010.

Goldman argues that we are transitioning into the growth phase of the recovery from the hope phase.  This period is generally characterized by stabilization in economic growth and lower equity returns than the hope phase.  Nonetheless, doubt remains and catalysts for higher stock prices remain.

gs21 GOLDMAN SACHS 2010 INVESTMENT OUTLOOK   THE BULL WILL CONTINUE

Perhaps most important, Goldman sees a continued influx of cash to the equity markets.  Thus far, investors have been risk averse and either remain in cash or have moved into bonds.  Goldman sees a substantial move into equities as investors become less risk averse.

cash GOLDMAN SACHS 2010 INVESTMENT OUTLOOK   THE BULL WILL CONTINUE

How to play it?  Thematically they focus on three key themes:

  • Dispersion – higher growth and higher sustainable returns companies.
  • BRICs exposure.
  • High and growing dividend growth companies.

* You can find Goldman’s 2010 commodity predictions here.

Source: GS

 


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Mid-Year 2009 Checkup

Here’s Karl Denninger’s mid-year review of his new year predictions, and thoughts on 2009 part 2.

market predictionsMid-Year 2009 Checkup

Courtesy of Karl at The Market Ticker


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Help One Of Our Own PSW Members

"Hello PSW Members –

This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible.  Feel free to contact me directly at jennifersurovy@yahoo.com with any questions.

Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts.  After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.)  Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.

http://www.youcaring.com/medical-fundraiser/help-get-shadowfax-out-from-the-darkness-of-medical-bills-/126743"

Thank you for you time!

 
 

Phil's Favorites

EU "Red Tape Hell"; Dust Settles on Appointment of Juncker; Time for an Up-Down Vote

Courtesy of Mish.

Jean Claude Juncker (Mr. "Lie When It's Serious") is already accused of sending the UK down the drain.

Please consider British firms fear red tape hell as EU orders equality and green energy reports.
British companies will be forced to publish details of their environmental impact and efforts to improve “gender equality” under a diktat from Brussels.

Bureaucrats want all large firms in the European Union to include details of their policies on “environment, diversity and human rights” in their annual financial statements, it emerged last night.

The “corporate g...



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Insider Scoop

ArcelorMittal Completes Sale of ATIC Stake to HES Beheer - Analyst Blog

Courtesy of Benzinga.

Steel giant ArcelorMittal (NYSE: MT) has completed the divestment of its 78% stake in European port handling and logistics company ATIC Services S.A. (ATIC) to HES Beheer for €155.4 million (roughly $213 million).

With this transaction, HES Beheer now owns 100% stake in ATIC where it previously held 22% stake. The transaction reflects ArcelorMittal`s strategy of selective deposal of non-core assets.

ArcelorMittal posted a net loss of $0.2 billion or 12 cents per share in first-quarter 2014, narrower than a net loss of $0.3 billion or 21 cents a year ago.

Revenues inched up 0.2% year over year to $19.8 billion in the reported quarter. Sales were almost unchanged from the prior quarter as improved steel shipments were partly offset by lower...



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Zero Hedge

It's Time For The BRICS To Act To Counter US Destabilization Efforts

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Ben Tanosborn of Tanosborn.com,

It had to happen!  The blame game on that horrendous airline incident, Malaysian Flight MH17, has reached the expected loud monotone of pointing fault, lock, stock and barrel at Russia… and, more specifically, to that villain ex-KGB Slav, Vladimir Putin.
 
US media barrage of grotesque and obscene propaganda against America’s former foe and competitor, whether filtering down from the top or randomly finding placement in the emotions of a brainwashed citizenry, has found a leader of this warring marching band in Barack Obama.  The neoc...



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Chart School

Bulls Take Notice - Caution Suggested as Credit Markets and Equity Markets Diverge

Courtesy of Doug Short.

Summary
  • Divergence with small cap stocks and junk bonds persists.
  • Credit spreads widening suggests building short-term financial stress.
  • Markets oversold and how risk areas react will be telling.

One of the most widely followed market theories is Dow Theory, which has been around for more than 100 years. The essence of Dow Theory is to focus on confirmations or non-confirmations between the Dow Jones Transportation Average and the Dow Jones Industrial Average for assessing market trends and reversals. If one of the indexes breaks out to a new high while the other does not, we have a non-confirmation and the potential for a market reversal.

Similar to Dow Theory I like to look for confirmation between the stock market and the credit markets. When one market does not confirm the other, caution is ...



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All About Trends

Mid-Day Update

Reminder: David is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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Option Review

Sizable Call Spread Trades On Orexigen

A large call spread initiated on Orexigen Therapeutics, Inc. (Ticker: OREX) on Monday morning looks for shares in the name to rally approximately 30% by September expiration. The September expiration is noteworthy as the company awaits the results of the FDA’s review of its resubmitted New Drug Application (NDA) for NB32, an investigational medication being evaluated for weight loss, after the review was extended for three months back in June. The upcoming Prescription Drug User Fee Act (PDUFA) date is September 11, 2014, according to a press release issued by the company. Shares in Orexigen today are up roughly 0.40% at $5.34 as of 2:15 p.m. ET.

...

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Sabrient

Sector Detector: Bulls remain unfazed by borderline Black Swans

Courtesy of Sabrient Systems and Gradient Analytics

Despite a highly eventful week in the news, not much has changed from a stock market perspective. No doubt, investors have grown immune to the daily reports of geopolitical turmoil, including Ukraine vs. Russia for control of the eastern regions, Japan’s dispute with China over territorial waters, Sunni vs. Shiite for control of Iraq, Christians being driven out by Islamists, and other religious conflicts in places like Nigeria and Central African Republic. But last Thursday’s news of the Malaysian airliner tragically getting shot down over Ukraine, coupled with Israel’s ground incursion into Gaza, had the makings of a potential Black Swan event, which in my view is the only thing that could derail the relentless bull march higher in stocks.

Nevertheless, when it became clear that the airline...



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OpTrader

Swing trading portfolio - week of July 21st, 2014

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Stock World Weekly

Stock World Weekly

Newsletter writers are available to chat with Members regarding topics presented in SWW, comments are found below each post.

Here's the latest Stock World Weekly. Please use your PSW user name and password to log in. (You may take a free trial here.)

#452331232 / gettyimages.com ...

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Market Shadows

Danger: Falling Prices

Danger: Falling Prices

By Dr. Paul Price of Market Shadows

 

We tried holding up stock prices but couldn’t get the job done. Market Shadows’ Virtual Value Portfolio dipped by 2% during the week but still holds on to a market-beating 8.45% gain YTD. There was no escaping the downdraft after a major Portuguese bank failed. Of all the triggers for a large selloff, I’d guess the Portuguese bank failure was pretty far down most people's list of "things to worry about." 

All three major indices gave up some ground with the Nasdaq composite taking the hardest hi...



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Digital Currencies

Bitcoin Vs Gold - The Infographic

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

While Marc Faber has said "I will never sell my gold," he also noted "I like the idea of Bitcoin," and the battle between the 'alternative currencies' continues. The following infographic provides a succinct illustration of the similarities and differences between gold and bitcoin.

Please include attribution to www.jmbullion.com with this graphic.

...

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Pharmboy

Biotechs & Bubbles

Reminder: Pharmboy is available to chat with Members, comments are found below each post.

Well PSW Subscribers....I am still here, barely.  From my last post a few months ago to now, nothing has changed much, but there are a few bargins out there that as investors, should be put on the watch list (again) and if so desired....buy a small amount.

First, the media is on a tear against biotechs/pharma, ripping companies for their drug prices.  Gilead's HepC drug, Sovaldi, is priced at $84K for the 12-week treatment.  Pundits were screaming bloody murder that it was a total rip off, but when one investigates the other drugs out there, and the consequences of not taking Sovaldi vs. another drug combinations, then things become clearer.  For instance, Olysio (JNJ) is about $66,000 for a 12-week treatment, but is approved for fewer types of patients AND...



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Promotions

See Live Demo Of This Google-Like Trade Algorithm

I just wanted to be sure you saw this.  There’s a ‘live’ training webinar this Thursday, March 27th at Noon or 9:00 pm ET.

If GOOGLE, the NSA, and Steve Jobs all got together in a room with the task of building a tremendously accurate trading algorithm… it wouldn’t just be any ordinary system… it’d be the greatest trading algorithm in the world.

Well, I hate to break it to you though… they never got around to building it, but my friends at Market Tamer did.

Follow this link to register for their training webinar where they’ll demonstrate the tested and proven Algorithm powered by the same technological principles that have made GOOGLE the #1 search engine on the planet!

And get this…had you done nothing b...



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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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