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February 27, 2008

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Cody

That's great stuff, SD, thanks ,man. Keep it coming.

SD

Here is the link to the paper-- http://www.som.yale.edu/faculty/oal4/research/fcast.pdf

Shilling's forecast misses were so large that he had to be removed from the study and in statistical terms he was a "dummy variable." Yet by decades of marketing himself as the bearish economist he is perceived right now as clairvoyant, this being one of the two time per day that a stopped clock looks accurate.

SD

A permabear cheering the economic downturn and benefiting now from the stopped watch school of forecasting is Gary Shilling. In a study of forecast accuracy, here is what a Yale economist wrote about Shilling: "...One practice is the "broken clock" strategy, which consists of always forecasting the same event. An example in the sample is Gary Shilling, a well-known recession-caller. Throughout the 1980s, Shilling continually predicted recession. In 15 out of 18 Wall Street Journal surveys in which he participated 1981–1992, his year-ahead long-bond yield projection was the lowest among all forecasters...8 out of 10 times his[GNP forecasts]forecast is below consensus, and he is often the extreme pessimistic outlier... it is hard to describe Shilling's forecasts as anything, but "extreme and rather unreasonable"..."

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Cody_1a

  • CODY WILLARD
    THE BIG APPLE, NEW YORK
  • Cody Willard is the general manager of CL Willard Capital. Find him at TheStreet.com, the Financial Times, on TV, or even playing that rock n' roll.

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