Market prediction based on macroeconomic indicators - page 13
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Here's Keane's article on his model:
http://keenomics.s3.amazonaws.com/debtdeflation_media/papers/PaperPrePublicationProof.pdf
Although I will say right off the bat that I don't like his model. Its purpose is to explain economic cycles and collapses, not to predict the market or economic performance as GDP with any accuracy. For example, his model predicted that rising household debt would lead to the collapse of the economy. But when exactly did his model predict. Nor is it capable of predicting what will happen after the collapse. All of his theoretical curves go to infinity and sit there indefinitely although the market and economy in the USA recovered in 2009. That must be why he continues to be very negative about this recovery, not believing in it and claiming a worse great depression is coming than Japan's two decade long one. I think this is the problem with all dynamic economic models: they are hard to stabilise and if they become unstable they lock in and can no longer predict the future. Although a famous hedge fund hired Keen as an economic adviser.
So you do tend to trade on years?
Explanation of economic cycles and collapses
Economic cycles are 3 to 12 years.......
I don't mind, just so you understand....
Mmmm, that kind of contradicts Taleb with his black swan. How can economists who predict well in one environment predict collapse?
Or rather not how, but why will it happen? because they are quite sure they are right, why would they revise that right, so we get lemmings enthusiastically rushing into the abyss.
The choice of an economist-predictor is based on his average prediction error both during crashes and during growth. I don't see anything contradictory about that. You wouldn't buy a car that only drives well in warm weather and breaks down completely in cold weather or vice versa. You will buy a car that drives well both in warm and in cold weather, on asphalt and on ice and snow. Although this car may not beat those machines that are specifically designed for off-roading (tractors) or dry and smooth asphalt (race cars, parkettes).
And so we come to the idea of multi-criteria selection, then we come to the idea of multi-criteria selection parameters etc., buttery oil.
Wouldn't it be better to choose one but the right model and chop dough with it? or whatever it is you do it for (saving the world from collapse).
So you do tend to trade on years?
Explaining economic cycles and collapses
Economic cycles are 3 to 12 years.......
I don't mind, just so you understand....
or whatever it is you do it for (saving the world from collapse).
Doing it for myself, to preserve my capital.
Why is this an afterthought in the discussion?
Isn't it better to choose one but the right model?
This whole thread is not about trading, but about investing, i.e. how to keep our long-term investments without collapsing and succumbing to false corrections.
Ours or yours?
Ours or yours?
Yours too, if you are interested in the topic. You probably don't know that the vast majority of the population don't trade every 5 minutes or 4 hours, but invest their savings (if they have any of course), i.e. put their money in stocks or mutual funds or houses or the local shop and sit on those investments for years. The richest use hedge funds and larger investments in companies and stuff. Pension and hedge funds hire econimist advisors where to move capital and when. They don't need market predictions for 5 minutes or even a day. Day-to-day trading in the market gives you less profit than long-term investments, especially if these long-term investments can be properly moved between different instruments and crashes can be avoided.
Have you even heard of Modern Portfolio Theory? http://en.wikipedia.org/wiki/Modern_portfolio_theory
By the way, noticed your thread
For large banks I am considering a job as a trader with your bank.
If it's not a secret, how many offers have you received? And if you describe your services like "I have experience in predicting economics and the market based on economics predictors" you would probably get more responses not only from banks but also from hedge funds, both Russian and foreign.
Yours, too, if you are interested in the topic. You probably don't know that the vast majority of the population don't trade every 5 minutes or 4 hours, but invest their savings (if they have any of course), i.e. put their money in stocks or mutual funds or houses or the local shop and sit on those investments for years. The richest use hedge funds and larger investments in companies and stuff. Pension and hedge funds hire econimist advisors where to move capital and when. They don't need market predictions for 5 minutes or even a day. Day-to-day trading in the market gives you less profit than long-term investments, especially if these long-term investments can be properly moved between different instruments and crashes can be avoided.
Have you even heard of Modern Portfolio Theory? http://en.wikipedia.org/wiki/Modern_portfolio_theory
By the way, noticed your thread
For large banks I am considering a job offer as a trader in your bank.
If it's not a secret, how many offers have you received? And if you described your services like that "I have experience in predicting economics and the market based on economics predictors" you would probably get more responses not only from banks but also from hedge funds, both Russian and foreign.
So you do trade on years?
I know that 80% of this site are scalpers scary....