Search Results for: forecasting

… and we are not giving investment advice. This is just a convenient way to document our analysis, which can be easily shared and easily updated. 
Our Investment Trading Decision Logic
Our trading decision contains the following basic logic.
AND (Forecast Method = “Yes”, Up Forecast = “Yes”)
We have never found a forecasting method that works for all investment vehicles.
Combining Step #1 + Step #2
We find a number of investment vehicles that show a positive forecast. However, the next step is we determine how that method performed historically in forecasting that IV. We then remove investment vehicles that don’t have …

… a “go” before purchasing. And of course, we then review each indicator when making a sale.
Investment Timing Option #1: Financial Variables
Another type of variable is called a financial variable. This means that a value like price to book ratio or price to earnings ratio is used to perform forecasting.
The problem with using financial variables is that how the variable is valued changes depending upon other factors such as interest rates, group psychology, etc… Financial variables are very well reported upon, and financial variables are routinely quoted in discussions of investment vehicles without any commentary on the predictive …

… based upon what amounts to forecasting. One thinks that a company has good prospects and will be likely to go up in value. Or one thinks that an asset is in a bubble, and overpriced and then be likely to go down in value. This depends upon the idea that the item in question is forecastable. The effectiveness in financial forecasting is explained in the following quotation.
Forecasting commodity prices and economic indicators is demonstrably an exercise in futility. Our markets and economies are complex systems and as such, their future unfolding is impossible to predict with any degree of