Dust flux, Vostok ice core

Dust flux, Vostok ice core
Two dimensional phase space reconstruction of dust flux from the Vostok core over the period 186-4 ka using the time derivative method. Dust flux on the x-axis, rate of change is on the y-axis. From Gipp (2001).

Tuesday, April 15, 2014

You may have what it takes to be a Kitco gold expert!

I know you've always dreamed of it. But you are probably asking yourself . .  how could I ever develop the wisdom and insight to be a Kitco gold expert? It must take years . . . no, decades . . . of intense study to develop the necessary mental acuity.

Anyway, Otto at the IKN blog claims that the Kitco gold experts are as useful as monkeys with darts. I say they are less useful. Let's investigate, using the table of data helpfully posted at the above link.

The shotgun approach to gold forecasting

The red dots are a scatterplot of % of bearish experts vs the weekly performance of GLD; the blue dots are % bullish experts vs weekly performance. It looks like monkeys with a dartboard.

But when we compare the expert consensus against the previous week's behaviour of GLD, we see a different pattern. On the week following a falling price in GLD, most of Kitco's experts are bearish. When GLD rises, most of Kitco's experts become bullish the following week.

Kitco's experts are a lagging indicator.

If you want to make use of them in your investment planning, you should first invent a time machine . . .

1 comment:

  1. Recency effect. Outlook is always dependent on projecting what's already happened, indefinitely, into the future.