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  • Zaphod
    replied




    The chance of this working is very small.  If it worked so well then every investment site could set this up to auto do it.  You dont need a PhD.  You dont even need to understand how it works.  Someone else programs the computer.

     

    When these things dont work the person (similar to the OP) will make the claim that political influences or whatever made it not work so not their fault.

     

    What good is any of it if it isnt real world.  There are always going to be outside influences.

     

    All of this is just fancy market timing.  Sure somebody is the next WB or whatever but not possible to identify that person ahead of time.
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    I think even if you get it to work brilliantly to foresee recessions with excellent accuracy, your ability to make money off this knowledge would still be incredibly limited.

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  • Donnie
    replied




    I am not diminishing the value of advanced degrees at all. Quite the contrary. What I am saying is that in spite of advanced degrees, predictive models of chaotic systems are tenuous at best. They are only as good as their model and unlike weather forecasting, the human component is the big wild card in economic and securities market forecasting.
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    Our ability to predict all of these things is improving, and it is the PhDs who are often at the leading edge of this.

    The earlier poster's comment that started this is right.  Having PhD resumes in relevant fields from people working on OP's site would lend credibility to the work.  Having a PhD is an indicator of (i) general intelligence and (ii) specific knowledge of a subject.  If I saw some resumes with advanced degrees or other useful background on the website, I would be more inclined to have a look rather than stick with my current assumption that the website will lack any new or useful insight.  In this regard, the failures of LTCM and their leadership are not relevant.

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  • spiritrider
    replied
    I am not diminishing the value of advanced degrees at all. Quite the contrary. What I am saying is that in spite of advanced degrees, predictive models of chaotic systems are tenuous at best. They are only as good as their model and unlike weather forecasting, the human component is the big wild card in economic and securities market forecasting.

    Leave a comment:


  • Donnie
    replied




    Kind of funny to see an argument against an on point event when the main premise of my response was about fat tails and Black Swans. Not to quibble, but a well researched post-mortem analysis of the facts and circumstances of LTCM’s demise is not an anecdote. It is ironic that you are disputing my basic premise with an analogy which never have any probative value.

    I will state again, no matter how smart the people are, any model of of a chaotic system has a significant risk of fat tails and Black Swans.
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    Yeah, I have read the book and am familiar with LTCM.  They messed up.  An analysis of LTCM is useful, but not in a generalizing way to diminish the value of advanced degrees in statistical fields relevant to stochastic modeling.

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  • Zaphod
    replied




    Kind of funny to see an argument against an on point event when the main premise of my response was about fat tails and Black Swans. Not to quibble, but a well researched post-mortem analysis of the facts and circumstances of LTCM’s demise is not an anecdote. It is ironic that you are disputing my basic premise with an analogy which never have any probative value.

    I will state again, no matter how smart the people are, any model of of a chaotic system has a significant risk of fat tails and Black Swans.
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    Thats why you have position sizing, etc...Those guys just got over leveraged, over confident and greedy. Unless the probability of an event was zero they were going to blow up. Get as leveraged as they were and it doesnt even have to be a grey swan, just a normal bad day.

    Leave a comment:


  • spiritrider
    replied
    Kind of funny to see an argument against an on point event when the main premise of my response was about fat tails and Black Swans. Not to quibble, but a well researched post-mortem analysis of the facts and circumstances of LTCM's demise is not an anecdote. It is ironic that you are disputing my basic premise with an analogy which never have any probative value.

    I will state again, no matter how smart the people are, any model of of a chaotic system has a significant risk of fat tails and Black Swans.

    Leave a comment:


  • Donnie
    replied




    A PhD is not necessarily a good metric in determining the value of any modeling.

    A good history lesson can be found in “When Genius Failed”, regarding LTCM who almost singlehandedly took down the world’s financial system. Seven (7) of the eight (8) Board of Directors we’re PhD’s from either MIT or the University of Chicago, with two of them Nobel Prize winners in economics.

    Probabilities based on modeling are still just probabilities. You can still get whacked up the side of your head by fat tails and bit in the @$$ by a Black Swan.
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    Kind of funny to see an anecdotal argument being used to discount the value of advanced degrees in determining probabilities and correlations of events in very complex subjects.

    This argument is equivalent to saying Dr. X committed medical malpractice so an MD is not a good metric in determining the value of any medical treatment. My great grandmother says she cured her flu in two days by eating coffee grounds and orange peels, so I’m pretty sure I know where to go for my next check up.

     

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  • spiritrider
    replied
    A PhD is not necessarily a good metric in determining the value of any modeling.

    A good history lesson can be found in "When Genius Failed", regarding LTCM who almost singlehandedly took down the world's financial system. Seven (7) of the eight (8) Board of Directors we're PhD's from either MIT or the University of Chicago, with two of them Nobel Prize winners in economics.

    Probabilities based on modeling are still just probabilities. You can still get whacked up the side of your head by fat tails and bit in the @$$ by a Black Swan.

    Leave a comment:


  • Zaphod
    replied




    By “recession” do you mean Market downturn?

    The unemployment rate among physicians is essentially nil, even in recessions.   In a recession my intermediate and long term bond funds will rise. This is the reason I own them.

    The smartest people on the planet are trying to predict the direction of the Economy and are consistently wrong. I am not sure what actions to take even if I knew a recession was sure to come.

    http://www.etf.com/sections/index-investor-corner/swedroe-better-face-correction
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    This is the problem. Not predicting a recession, but what/where to do anything if one should in the first place. Is it systemic, deep, etc? Most people recall 2000/2008 but those arent typical nor were they similar outside of the markets reaction. More typical recessions are much shallower and associated with much smaller bear markets, and its certainly difficult to tell what sector gets crushed and where to 'flee for safety'.

    I dont think identifying a slowdown, or that a recession is increased in probability over x months is actually terribly difficult. Its predicting/timing what the market will do and then correctly moving assets around to profit/protect from it. Thats the near impossible part.

    Probably the best overall discussion and possible portfolio implementation done on the topic is over at Philosophical Economics blog about the perfect recession indicator. www.philosophicaleconomics.com/2016/02/uetrend/

    Other excellent blogs if macro is an interesting topic to you are Fat Pitch and Calculated Risk. Both aggregate/interpret and give normalizing commentary in an exceedingly level headed manner about what each thing means, trends, what has any coincident indication and whats noise, etc....

    Leave a comment:


  • ReFinDoc
    replied
    By "recession" do you mean Market downturn?

    The unemployment rate among physicians is essentially nil, even in recessions.   In a recession my intermediate and long term bond funds will rise. This is the reason I own them.

    The smartest people on the planet are trying to predict the direction of the Economy and are consistently wrong. I am not sure what actions to take even if I knew a recession was sure to come.

    http://www.etf.com/sections/index-investor-corner/swedroe-better-face-correction

    Leave a comment:


  • Zaphod
    replied







    If you can really predict recessions with any degree of certainty you should be meeting with Blackrock and Goldman, not posting on WCI forums.
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    As others have pointed out, lots of free tools out there if you are into that.  I remember in ’07/’08 alot of folks stating we were in recession, yet took a fair amount of time for the numbers to catch up to the reality on the ground.  Prediction of a recession is not terribly difficult imo, an understanding of the drivers, length, depth, breadth are all needed to make portfolio level decisions (again if you are a timer of some stripe).

    I get RecessionProtect is attempting to provide folks information to both interpret for themselves and potentially act up from a investment perspective.  But who are you/your team?  What are your credentials to make me want to pay to see this information?  A bio/cv that starts with PhD….. Tell me how your product is a better mousetrap than everyone else’s.

    IMO, someone who has a 100k – 250k retirement portfolio would not bother, and the folks who have a portfolio north of $1M are either a. have portfolio/process that works and is successful, or b. hire the JPM’s/NT/Goldman’s who have there own staff for which they are paying an AUM fee.

    I recall a macro-economist I worked with professionally stating ‘The Fed has the largest number of Economist’s in captivity’.
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    Yes. Anyone serious about these things should already know how to get and properly visualize the important data from FRED and have an outlook that makes sense, or a relationship with someone that has similar. On the OPs website they are already concerned due to valuation, which yes is rich. However, economic data wise the whole world has turned positive recently and without a catalyst to make people fear something imminent, a flock to safety mentality will leave one behind.

    Trends weaken before they turn, and ours is still strengthening in most regards and most in where its highly important. When those things change, guards will come up.

    Leave a comment:


  • ajm184
    replied




    If you can really predict recessions with any degree of certainty you should be meeting with Blackrock and Goldman, not posting on WCI forums.
    Click to expand...


    As others have pointed out, lots of free tools out there if you are into that.  I remember in '07/'08 alot of folks stating we were in recession, yet took a fair amount of time for the numbers to catch up to the reality on the ground.  Prediction of a recession is not terribly difficult imo, an understanding of the drivers, length, depth, breadth are all needed to make portfolio level decisions (again if you are a timer of some stripe).

    I get RecessionProtect is attempting to provide folks information to both interpret for themselves and potentially act up from a investment perspective.  But who are you/your team?  What are your credentials to make me want to pay to see this information?  A bio/cv that starts with PhD..... Tell me how your product is a better mousetrap than everyone else's.

    IMO, someone who has a 100k - 250k retirement portfolio would not bother, and the folks who have a portfolio north of $1M are either a. have portfolio/process that works and is successful, or b. hire the JPM's/NT/Goldman's who have there own staff for which they are paying an AUM fee.

    I recall a macro-economist I worked with professionally stating 'The Fed has the largest number of Economist's in captivity'.

    Leave a comment:


  • Zaphod
    replied
    I do think that while it may not give one a tight time frame economic indicators can help identify when the probability a recession is nearing. However, the tools necessary and a ton of work in the area has already been free to anyone interested. Sure, lots wont care to do any work themselves.

    Im sure you'll find some interested parties, but lots of people are already doing very similar things and most of the models are freely available to anyone looking.

    Leave a comment:


  • StarTrekDoc
    replied
    @RP - did your models accurately predict the last 5 recessions AHEAD of them? 1980, 81, 90, 01 and 07?   What have they been saying with the most recent Bull run that's accelerated since November?  Did it say to move to safety anytime during 2016-17?

    Leave a comment:


  • StarTrekDoc
    replied
    Thanks for the offer; will go try it out and 'kick the tires' this weekend. 

    Yes, tough crowd - kind of baked into the genes of docs and throw financial conservative tendencies into it -- always weary of a promise.

    Leave a comment:

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