At 05:51 AM 9/9/2008, Rick Monteverde wrote:
Horace -
If you don't think it's relevant, then you don't think you know exactly
what's driving it (and you'd be right), and therefore you couldn't possibly
know where it would go if you tried driving it yourself. But Horace, if you
*know* that you *can* predict and even steer an immense chaotic system like
planetary climate - please please pretty PLEEEASE email me your stock picks
NOW!!!
This analogy is flawed. Predicting climate change in the future is
like predicting the overall trend of the market. Predicting the
weather for one location is like predicting the outcome for a
particular stock. In 1950 a person might have predicted that over the
next 30 years the stock market as a whole would rise. That would be a
very safe, fact-based prediction. Knowing which stocks in particular
would rise is a very different proposition. Even the best markets
some stocks fail, just as even during periods of global warming, in
some locations, you may have days or months of unseasonably cold weather.
Actually, in some ways you have it backward. You think that
short-term trends are easier to predict than long-term trends. This
is true with some complex systems, but not the stock market or the
weather. The outcome of the stock market on any particular day is
unpredictable but the overall trend is often clear. That is why
financial geniuses tend to be long-term investors. They make tons of
money whereas daytraders seldom do. Our knowledge of physics and the
atmosphere makes it easier for us to predict the weather in 30 years
than tomorrow in Atlanta (assuming CO2 emissions do not decrease).
- Jed
