Tuesday, June 26, 2012

Stumbling onto chestnuts

The weather report two weeks ago last Friday said the high for a week ago last Wednesday would be 102 degrees. By the time a week ago last Wednesday rolled around, the atmosphere delivered a cool 97. The forecast high for a week ago last Friday was originally 103, however as the cooling trend hit, the experts promptly lowered their expectations to a range of 95 to 98. However by the time Friday arrived, dang that global warming, we were back above the century mark. Last Wednesday's high was originally expected to come in around 96, however the previous Friday's heat wave caused the experts to abruptly alter their forecast to 104.

Oh how great life would be if only the Fed (revisions, revisions, revisions), your typical economist (predicted 10 of the last 3 recessions) and your most adept stock market forecaster (LOL) were nearly as accurate as your everyday weatherperson - I kid you not.

Now one might say, with regard particularly to the Fed and the economist, it's their lack of real-world experience (now that I just said that, I think I recall saying that myself), but the truth of the matter is; experiencing the real world will never make one an accurate forecaster. But if one pays very close attention, and remains detached, one becomes enlightened to something infinitely more important. That there is no 'art of forecasting'. That an educated lucky guess is every bit as much a random occurrence as a blind squirrel stumbling onto a chestnut.

My point; don't dare succumb to a forecast, rosy or gloomy. Nobody knows, particularly in the short-run, where the market's headed. Seriously; Dow down 130 yesterday, up 11 this morning. Why? Where's the logic? Don't even attempt to answer. That is, unless your answer is; because yesterday's buyers were only willing to come in 130 points below Friday's close. And this morning's sellers were only willing to sell 11 points above yesterday's close.

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