Muzie

Black Swans, Real Estate and Financial Stocks

vamc: Frankly I'd take Considine's flawed models over your vague wand waving any day of the week.

I don't think Considine ever implied he tried to "predict all the things". Black swans will make any investment method fail whether they are based on fundamentals, technicals, psychology or whatnot.

Yes, to one with a hammer everything looks like a nail, aka. the data fit problem.

The flipside is to one with no (or inadequate) knowledge everything looks like randomness....

Black Swans, Real Estate and Financial Stocks

dmnieren: I think Mr. Considine 1:40 odds are for any single one-year period... so of course over multiple years you will eventually hit a significant percentage. Besides you can't just compare a predicted one-year return with the cherry-picked arbitrary timeframes you've chosen, you're comparing apples and oranges.

Mr. Considine: I'm sorry if my knowledge of statistics is relatively shallow - I'm assuming some kind of Monte Carlo simulation is at the heart of these predictions. Wouldn't it be possible to give a probability curve on the accuracy of the predictor itself, thus at least giving an estimate of how wide the black swan event window is?