Voodoo Analysis:
I'm no market analyst.....
I’m an engineer by training, and very logical by nature. I even subscribe to Skeptic Magazine, so I’m somewhat obsessed by logical thought.
As such, I agree that there are fundamental numbers and influences that make the market predictable to a degree. Someone who can churn those numbers and make no-nonsense decisions based on them has an advantage in picking the trend of the market. They won’t always be right, but that’s just proof that the market is more complex than a mechanical system. Psychology, economic conditions, and world events will often throw off even the best calculation.
But I cannot see the sense in some of the voodoo analysis I read. Here I’m talking specifically about the “4 year cycle”, and what is seemingly, (if you read the “analysis” closely), a required 10-20% drop.
Does anyone really believe the stock market is a mechanical system that can be assumed to have an inherent period? Has anyone stopped to look at the past 10-20% drops, and found that they were actually caused by an identifiable event, or series of events, or economic conditions? I'm willing to bet they were. If so, does anyone really believe those EVENTS or conditions are tied together by a 4 year cycle of cosmic significance?
Don’t get me wrong….there certainly could be a huge drop in our near future, and there are plenty of potential causes that can easily be identified. (Oil, Iran, Middle East politics, Terrorism, South America, etc., etc., etc.). Guessing what will happen, and when it will happen, is beyond our ability to calculate. So, I would propose that those who claim we are “overdue” for a drop, or think they can predict the range of DATES for the drop, are just performing voodoo. Nothing more.
Listen to them at your own risk.
There….glad I got that off my chest.....I feel better now.
