Predictions
Jan. 5th, 2009 07:16 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
peterbirksTaleb gets it right about predictions.
"Do you think the market will go up or down today?" he was asked.
"Most likely up", he replied.
"So how long are you?" asked conventional trader.
"I'm not long the market. I'm short", said Taleb, allowing the questioner to try to work out why there was no contradiction between his opinion and his position.
And so it is that my positions in the market appear somewhat to contradict my opinions about the most likely outcomes for 2009.
Inflation: My position. Not retiring debt, would be willing to take on more long-term debt at reasonable price. My predition for 2009. Low numbers throughout year, going negative for hte middle for months.
Interest Rates: Down to 0.5% by June, back up to 1.5% by December.
Sterling: Down to a bottom of about 92p against the euro. Remaining sub-parity by December (98p-ish).
Dollar: Strong until May or June, then weakening against euro to $1.60 or so by December. Strengthening against sterling ($1.27?) but weakening in second half to $1.55 or thereabouts.
Unemployment: Dreadful. See ouput
Output: Ghastly. Minus 2% to minus 2.5%.
FTSE: Despite a return of fears about inflation, no immediate boost to the market. However, bottom is reinforced by retail investors who now have nowhere else to put their savings. Low of 3,400 to 3,500 in April. Rebound to 4,500 by December.
Gold: Excellent. $1,100 an ounce by December.
Oil: Remaining in the toilet. $30 to $40 by December without much volatility this year.
+++++++++++++
Snow this morning. Trains cancelled. Train time predictor on London Bridge Underground suffering seizure, predicting 8 minute wait just as train was entering station. Exits blocked by tourist jamming his walk-a-bag. Probably an Italian (tourist, not bag). In other words, wlecome back. It's January.
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"Do you think the market will go up or down today?" he was asked.
"Most likely up", he replied.
"So how long are you?" asked conventional trader.
"I'm not long the market. I'm short", said Taleb, allowing the questioner to try to work out why there was no contradiction between his opinion and his position.
And so it is that my positions in the market appear somewhat to contradict my opinions about the most likely outcomes for 2009.
Inflation: My position. Not retiring debt, would be willing to take on more long-term debt at reasonable price. My predition for 2009. Low numbers throughout year, going negative for hte middle for months.
Interest Rates: Down to 0.5% by June, back up to 1.5% by December.
Sterling: Down to a bottom of about 92p against the euro. Remaining sub-parity by December (98p-ish).
Dollar: Strong until May or June, then weakening against euro to $1.60 or so by December. Strengthening against sterling ($1.27?) but weakening in second half to $1.55 or thereabouts.
Unemployment: Dreadful. See ouput
Output: Ghastly. Minus 2% to minus 2.5%.
FTSE: Despite a return of fears about inflation, no immediate boost to the market. However, bottom is reinforced by retail investors who now have nowhere else to put their savings. Low of 3,400 to 3,500 in April. Rebound to 4,500 by December.
Gold: Excellent. $1,100 an ounce by December.
Oil: Remaining in the toilet. $30 to $40 by December without much volatility this year.
+++++++++++++
Snow this morning. Trains cancelled. Train time predictor on London Bridge Underground suffering seizure, predicting 8 minute wait just as train was entering station. Exits blocked by tourist jamming his walk-a-bag. Probably an Italian (tourist, not bag). In other words, wlecome back. It's January.
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no subject
Date: 2009-01-06 12:47 am (UTC)So (on Taleb) which applies to you? The FTSE? Can you see much upside from 4600? I'd put the recent rally down to a savings exodus, rather than an expression of confidence in the economy / government strategy. I'm now itching to short it.
Interesting on oil, a few weeks ago, the futures were pretty high, not checked recently. Presumably you hold this sentiment for metal commodities too. I was umming and ahhing about where to enter the market if and when I do, I'd warmed to metals as I'd reckon on another bubble when china and india recover and resume their economic expansion.
f.n.
Long and short of it
Date: 2009-01-06 02:40 pm (UTC)I see virtually no upside above 4700, so that makes for a 25% downswong possibility if we are looking at 3500. Sheer lethargy stops me taking advantage of this, although I will be buying equities at 3500, for sure.
I agree that much of the support comes from savers looking for yield, and these people might run for the hills when either (a) yields appear elsewhere or (b) one or two of their investments goes down the toilet.
Bubbles take time to develop after they have been pricked. I've got no faith in oil or metals. Softs might be "a stock-pickers market", but that's a bit like saying "Be lucky".
PJ
Re: Long and short of it
Date: 2009-01-07 01:31 pm (UTC)So what are you saying: like Taleb, but without the black swan?
good luck in 2009.
f.n.