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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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

Wealth Bubble In ‘Scary Graph’ Flashes Warning About Future U.S. Downturn (Bloomberg)

Americans are about as wealthy as they've ever been—and that's a worry?

U.S. Stocks Advance as Commodities Retreat on Dollar Strength (Bloomberg)

U.S. stocks rose, sending the S&P 500 Index to a record, and the dollar strengthened as speculation mounted that central banks from Japan to Europe won’t be in a rush to add to unprecedented stimulus. Emerging-market assets and commo...



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Zero Hedge

THE SUBPRIME U.S. ECONOMY: Disintegrating Due To Subprime Auto, Housing, Bond & Energy Debt

Courtesy of ZeroHedge. View original post here.

By the SRSrocco Report,

The U.S. financial system continues to disintegrate even though most Americans hardly notice.  The system is being gutted from the inside out... much the same way a chronic disease weakens a patient even before any symptoms are felt.  However, we are already experiencing painful symptoms as U.S. economic indicators continue to weaken.

Here are just a few of the recent headlines:

...



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Chart School

Best Stock Market Indicator Update

Courtesy of Doug Short's Advisor Perspectives.

We continue to receive requests for updates to the "Best Stock Market Indicator", which used to be a regular guest post from John Carlucci. Here is an update of the "Carlucci" indicator along with a summary of John's explanation on how he uses it.

As John described it: "The $OEXA200R (the percentage of S&P 100 stocks above their 200 DMA) is a technical indicator available on StockCharts.com used to find the "sweet spot" time period in the market when you have the best chance of making money."

Latest Indicator Position

According to this system, the market ...



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Phil's Favorites

Stocks' Streak Of New Highs Hits Rarefied Air - What Happens Next?

Courtesy of Dana Lyons

The Dow just scored 7 straight all-time highs; are there more on the way, or is the air getting too thin?

When the major U.S. stock averages broke out to new highs earlier this month, the key consideration became would the breakout fail or would the new highs stick? Well, 10 days later the breakout gets high marks for follow through. This is particularly so in the case of the Dow Jones Industrial Average (DJIA). As many averages have spent the past several days digesting recent gains, the DJIA has continued its ascent. In the process, the index has recorded 7 straight all-time highs.

While the streak is not unprecedented, it is just the 12th such run in the past 10...



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ValueWalk

Relypsa Inc (RLYP) Soars On Galenica Bid

By Jacob Wolinsky. Originally published at ValueWalk.

Relypsa Inc (NDAQ:RLYP) — to be acquired by Galenica AG (VTX:GALN) for $32 per share in cash is soaring this morning up about 58 percent at the time of this writing in early morning. On the other hand shares of Galenica are down on the announcement by about 8 percent. What are the details of the deal? Here is what the sell side analysts are saying about the pharma news.

Relypsa Inc (NDAQ:RLYP) bid – analysts react

Cantor Fitzgerald

Relypsa will be acquired by Galenica for $32 per share, a 59% premium over the last closing price. We have thought that Relypsa would likely be acquired at some point, given the opportunity to grow Veltassa to be a significant commercial brand, ...



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Kimble Charting Solutions

Doc Copper going to peak again at 200 Day moving ave?

Courtesy of Chris Kimble.

Doc Copper is often viewed as a leading indicator, for global growth or lack of.

The 200 day moving average is often viewed as the line in the sand to determine if an asset is in an up or down trend.

Is Doc Copper climbing above its 200 day moving average a good or bad sign?

Below looks at Doc Copper over the past decade with the 200 MA applied.

CLICK ON CHART TO ENLARGE

Copper peaked in 2011 and since, has continued to create a series of ...



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Digital Currencies

Demystifying the blockchain: a basic user guide

 

Demystifying the blockchain: a basic user guide

By Philippa Ryan, University of Technology Sydney

Companies around the world are exploring blockchain, the technology underpinning digital currency bitcoin. In this Blockchain unleashed series, we investigate the many possible use cases for the blockchain, from the novel to the transformative.

Most people agree we do not need to know how a television works to enjoy using one. This is true of many existing and emerging technologies. Most of us happily drive cars, use mobile phones and send emails without knowing how they work. With this in mind, here is a tech-free user guide to the blockchain - the technology infrastructure behind bitcoin...



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OpTrader

Swing trading portfolio - week of July 18th, 2016

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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Mapping The Market

No wonder Saudis are selling as much as they can!

Courtesy of Jean-Luc

We are getting much more energy efficient – no wonder Saudis are selling as much as they can! Who wants to be the one with trillions of dollars of oil in the ground unwanted:

http://arstechnica.com/science/2016/07/the-amount-of-energy-needed-to-run-the-worlds-economy-is-decreasing-on-average/#p3

...

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All About Trends

Mid-Day Update

Reminder: Harlan 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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Biotech

This Is Why Biotech Stocks May Explode Again

Reminder: Pharmboy and Ilene are available to chat with Members.

Here's an interesting article from Investor's Business Daily arguing that biotech stocks are beginning to recover from their recent declines, notwithstanding current weakness.

This Is Why Biotech Stocks May Explode Again

By 

Excerpt:

After a three-year bull run that more than quadrupled its value by its peak last July, IBD’s Medical-Biomed/Biotech Industry Group plunged 50% by early February, hurt by backlashes against high drug prices and mergers that seek to lower corporate taxes.

...



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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!




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