February 12, 2009
TALKING ABOUT STOCK-MARKET FORECASTING ON THE INSIDE VIEW
In the new episode of The Inside View, your editor begins a series of discussions on the various techniques and methodologies for portfolio management. Today's show focuses on the Gordon equation, one of the building blocks for estimating prospective equity market returns.
The Gordon equation is one of several applications used for building the model portfolios in The Beta Investment Report. But like any forecasting tool, investors need to be cautious and understand how the Gordon equation is designed. Certainly the Gordon equation isn't flawless when it comes to divining the future, particularly in the short run. But used prudently, in context with other forecasting tools, it provides a good start for thinking about the investment outlook and designing an asset allocation plan.
What's the Gordon equation is telling us these days? Tune in for the answer…
Please visit CapitalSpectator.podbean.com for additional options with episodes of The Inside View.
Posted by jp at February 12, 2009 11:10 AM
Forcasts are NOT a method. For what it's worth, my experience has taught me the following lessons. You cannot follow a system unless you are it's creator and have tested it extensively. When systems suffer their eventual adversity and drawdown period, and they all do, it will tests your metal and "stick to it ness" to no end. To stop trading in these tough times usually always means ending in failure. To be the developer, quant and creator on the other hand is the only way to get this strength. Get yourself a good porfolio level backtesting engine like Amibroker Pro and a high quality historical dataset like from these guys www.forextickdata.com and begin your journey.
Posted by: David Succaria at February 23, 2009 9:00 PM