Recently, my good friend Don Ake gave a presentation to the local chapter of the Institute of Management Accountants about "unusual economic indicators." In this talk, he introduced his audience to such useful tools as the Short Skirt Indicator, shown here. :-) And he neatly summarizes all the reasons that forecasting the value of a stock, or of a stock index, is difficult. I decided to collect all these reasons and present them here, because it's not just stock we predict.
- weather
- sports team (and individual) performance
- start-up (and mature) company performance
So why is forecasting so hard?
(1) Short-term fluctuations. If you look at the performance of a stock index over time, that tends to be noisy data. Those fluctuations can look significant, if you only look at the near-term.
If we react to those fluctuations, it means we have been caught up in Tuffy Rhodes Syndrome. Tuffy Rhodes is a baseball player, an American who has had a long career in Japanese ball, where he has played with distinction.
Lessons Learned


The Do YOU Need a FAQ? FAQ
Once, long ago, I worked for NASA. One of my co-workers there, someone I liked and admired, was one of America's leading experts on fastening and joining. And local management didn't understand the importance of this knowledge until a few months before this guy was to retire. THEN they got a contractor to record my friend's knowledge on video.
Any sufficiently advanced technology is indistinguishable from magic.
I once worked for a start-up, GreyPilgrim Inc., a maker of flexible robotic manipulators (most people might just call them "robotic arms"). The company has since gone Chapter 7 and re-emerged from the ashes 
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