« Happy Hour 2.27.08 | Main | A Trade In Which Emotions Aren’t the Enemy »

February 27, 2008



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


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.


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"..."

The comments to this entry are closed.

About Me


  • 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.

Products I've Used (Rated on Scale of 1to10)