Analysis or forecast

Analysis and forecast are two completely different things altogether. While forecast is about the future, analysis is done of things in the past. And still, we regularly keep hearing about the “Analyst forecast”. Isn’t it strange?

Many forecasts have nothing to do about the future, but are just extrapolation of the past.

Mutual funds know it better when they say, “Past performance may or may not be sustained in future.”

To read more about this, look at the chapter “On Forecasting” in the book “Riding The Roller Coaster – Lessons from financial market cycles we repeatedly forget”

#RidingTheRollerCoaster – 93

Advertisements

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s