26 August 2010

Time to Run & Scream! (or not)

The Hindenburg Omen IS Scary (read here)

I'm sorry. I should take this seriously. My portfolio is again lying on the tracks while a train may - or may not - be coming. But I have to confess that I find this kind of thing so many degrees of amusing.

"Charlie!! Look!! The Hindenburg Omen is flashing!!"
"Oh! No!" Pause. "What is that?"
"It's a predictor."
"Of what?"
"Well, as it turns out, 25% of the time that it flashes, we run and scream like little girls."
"We do?" Pause. "Why?"
"Because the Hindenburg Omen is flashing!"
"So it flashes to warn us what we are about to do?"
"Why would we run and scream like little girls?"
"Because the Hindenburg Indicator is flashing!"

And so it goes. Market indicators tell players in the market that they are about to buy or sell and ... ta da! ... accurately predict this behavior every time everyone takes them seriously.

I feel inclined to run and scream just knowing that such convoluted "predictors" exist.

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