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It seems this time of the year is when everybody gets into the BPG, Big
Predicting Game that is. Before committing to your predictions, and
getting married or worse addicted to it, ponder the following:
- How many people trade? Maybe a million or more, I don't know
- How many people who trade have an opinion? Almost all of them.
- How many will be right? Quite a few
- How many will be right ten times in a row? Still quite a few.
- 50 times in a row? At least one.
- What does it tell us? This guy was right 50 times in a row.
- What about the 51st time? Chances are the same as for the million
other.
- So what's the point? It is all a matter of probabilities: In any given
long series of outcomes there is a sequence. But is to know before the
sequence it is going to be this sequence?
- Who is going to know it was so and so who was going to be right? You'd
have to assume there is dependency between the outcomes?
- Is there? If yes, that supposes you can know the future in advance.
- Can you? I don't, and all I know, don't. But that did not prevent
them from making money. Actually, the more you try to predict, the more
certain you are to lose in the long run.
- So? Predicting is irrelevant to making money. It is only relevant to
being right or wrong.
- So why bother predicting? ... for the ego I guess.
Happy Holidays to all of you
Gwenn
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