Margin of Safety » Predicting the Future http://amarginofsafety.com "...to distill the secret of sound investment into three words..." Fri, 26 Jun 2020 18:44:00 +0000 en hourly 1 http://wordpress.org/?v=3.2 Equity Market Histogram: Another Victory for the Mode in 2011 http://amarginofsafety.com/2012/01/03/equity-market-histogram-another-victory-for-the-mode-in-2011/?utm_source=rss&utm_medium=rss&utm_campaign=equity-market-histogram-another-victory-for-the-mode-in-2011 http://amarginofsafety.com/2012/01/03/equity-market-histogram-another-victory-for-the-mode-in-2011/#comments Tue, 03 Jan 2012 20:06:56 +0000 Ray Galkowski, CFA http://amarginofsafety.com/?p=1227 Continue reading →]]> As I recall, I said at the beginning of 2011 that predictions are worthless, but if one takes an outsider’s view there is a 70% chance that the market’s total return will be positive in 2011 and that the most likely event is a 0% to 10% rise. Well, that guess (and I do mean guess) was spot on. Of course that guess was based on a returns histogram that I supplied at the time. I have updated that histogram below.

Guess what I “predict” for 2012? Years highlighted in orange relate to the Great Depression; blue relates to the credit crunch. Notice that there were many more extreme years during the Great Depression than recently.

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]]> http://amarginofsafety.com/2012/01/03/equity-market-histogram-another-victory-for-the-mode-in-2011/feed/ 0 A Machine that Predicts the Future? http://amarginofsafety.com/2011/11/17/a-machine-that-predicts-the-future/?utm_source=rss&utm_medium=rss&utm_campaign=a-machine-that-predicts-the-future http://amarginofsafety.com/2011/11/17/a-machine-that-predicts-the-future/#comments Thu, 17 Nov 2011 17:52:48 +0000 Ray Galkowski, CFA http://amarginofsafety.com/?p=1104 Continue reading →]]> I have not received this edition yet, but I cannot wait to read the article. A machine that predicts the future? If enough people fall for that, value investors like me will make a mint.

 

 

 

 

In Brief

  • Researchers plan to build a computing system that would model the entire world to predict the future.
  • The project would be powered by the enormous data streams now available to researchers.
  • Yet models are not perfect; many researchers think they will never be able to capture the world’s complexities.
  • A better knowledge machine may arise out of Web-like principles such as interconnection and argument.

 

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