标题: [转贴] Head & shoulders and double-dips [打印本页] 作者: 何鸿燊 时间: 2010-10-25 00:57 标题: Head & shoulders and double-dips
Commentary: Being a data-driven investor isn’t easy
By Mark Hulbert, MarketWatch
CHAPEL HILL, N.C. (MarketWatch) — A “head and shoulders” top?
Just such a bearish prospect was quite the rage this summer among many bearish advisers. All that was needed for this technical indicator to trigger an actual sell signal was for the market to fall below the “neckline” that connected the right and left shoulders — and the market came dangerously close to doing so.
As fate would have it, however, the market narrowly averted that turn of events. Furthermore, the market since then has broken out above this summer’s right shoulder — a “huge positive development,” according to James Stack, editor of the InvesTech Research Market Analyst service.
Strangely, however, I’ve seen precious few mentions of this positive turn of events from the advisers who this summer were so quick to pounce on the bearish significance of the potential head-and-shoulders top.
Why?
My hunch is that it’s the rare adviser who is willing to be rigorously empirical in following the lead of the data. The vast majority appear instead to have preconceived notions of where the markets are headed, and focus their analysis on arguments that support their preconceptions.
Adlai Stevenson’s famous line from 50 years ago comes to mind. Mocking opponents’ reasoning, this elder statesman and candidate for president in the 1952 and 1956 elections would say “here’s the conclusion on which I base my facts.”
The dead giveaway that an adviser is not being empirical comes when situations change and his original lines of reasoning now support the opposite conclusion — as is the case with the head-and-shoulders formation. If he simply ignores this turn of events and comes up with yet more reasons to support his position, then we know that the reasons he advances in support of his position are nothing more than after-the-fact justifications.
The relative rarity of data-driven advisers has also been evident in the debate over a double-dip recession. This summer, many of the bearish advisers argued that just such a double-dip was all but guaranteed, and they supported their arguments with data supplied by the Economic Cycle Research Institute. At the time, the ECRI’s Leading Indicator (WLI) was falling sharply.
Over the last few months, however, the WLI has stabilized and even ratcheted up a notch or two. Lakshman Achuthan, ECRI’s managing director, has said that, at least for now, the data suggest that the economy is likely to “veer away from the recession track and toward a soft landing.”
As was the case with the head-and-shoulders formation, however, I have seen precious few mentions of this positive turn of events from those advisers who, this summer, were drawing such bearish conclusions from the ECRI data.
Let me hasten to add that, even though these two examples are of bearish advisers who are ignoring the data, there are plenty of bullish advisers who are equally guilty of not being rigorously empirical. In addition, it’s entirely possible that these un-empirical advisers to whom I refer in this column may turn out to be right in being bearish.
My point instead is that, if they do turn out to be correct, it will have nothing to do with the arguments they advance in support of their positions.
Think about it this way: If your adviser pays so little attention to his own line of reasoning, why should you?
