Here we go again

[CSB]

Casinos don't lose money as long as they are filled with winners!

It's us suckers that pay the freight.

You're only a sucker if you knowingly play games that have a negative expectation!

[CSB]

If I cannot use wikipedia on academic paper, I will not let you use it on me. Sorry, Charlie. (I'm aware of the links at the bottom, but still, if I cannot use it on academic paper, I cannot let others use it on me)

Look the words up in a dictionary then.  

I'm just saying regression formulas and other formulas are all mere prediction.

They're actually the opposite.  They only provide analysis of historical trends which may or may not have any bearing on future trends.

Every single analyst are all mere predictions. This just continues to prove my speculation theory. Analyst predict one thing using any formula he wish, the company's performance exceed his prediction, the price of the stock moves upward. I've seen this with my own eyes. Not in a book. I haven't gotten that far into academia, yet.

 

Of course you have.  This is pretty much how it works.  The market and the analysts come to an agreement (current price) as to the future value of the company.  This is done by predicting future earnings.  When those earnings substantially differ from the market's expectations then the stock must be repriced to be in line with the new data.  Why are you acting like this is surprising?

You are an investment banker, you try to B.S. people in believing this company is next Wal-Mart and that the price is going to go up, therefore, you make all your money.(if you tried to tell me I'm wrong, I will give you history lesson of an investment banker taking a company public that had no revenue nor profit and this stock sold at 98.00 a share within few days.) I've read stories on account that fundamental analyst get themselves fired, because of conflict of interest between their prediction and the investment banker's prediction.

That only works for IPO's.  The investment bankers are trying to get the best price that they can for their client (the company offering the shares).  Analysts are different from investement bankers which leaves me confused as to why you are trying to bring investment bankers into this discussion.

I suggest spending more time studying and less time trying to explain the markets on bassresource.

This is a really good post.

[Root beer]

I bought up investment banker because RW is an investment banker. Of course I know that IPO is where investment bankers are. That where they are root of all evil. They can overestimate the actual price.. Hey did you also know they also assist in merging? They can also be root of all evil in merging. My point? I hate investment bankers at time with their overestimation of the actual stock price and merging companies together. (doesn't that defeat the point of capitalism? It make it seems more like monopolistic competition?) "Yeah, lets weed out the small guys by merging them into fortune 500 companies and make killer money, then go play golf."

I also bought investment bankers up because I have read on account, an analyst made predictions and got fired due to investment bankers putting pressure upon them because the analyst themselves put sell rating on company that the investment bankers represent. The guy that put sell rating on Donald Trump bonds got fired (it later defaulted) The guy that put sell rating on Enron, he also got fired. I wonder why....

Regression formulas use HISTORICAL data. It may be independent or dependent on the future data.(I believe independent, but you can still get good prediction out of it sometimes depending on situation) When it is calculated it is just a mere prediction. At any giving point along the way somewhere in middle there going to be a variable change that going to veer off.

But me? I don't used what I'm preaching, I use financial ratios to calculate companies performance and buy when I think it cheap and sell when I feel like it. I'm just simply saying regression CAN give you pretty good idea what it going be like within future. You're going to be wrong sometimes, and sometimes you are going to be right. I just believe I'm be right more than wrong. That chart you post...plug this year cost of oil, into a regression formula, and pick out a month, then when the month rolls around we'll talk.

Financial Ratios and Standard Deviations are my two favorite math formulas. The rest that I mentions are just for mere fun and knowledge. Just sort of give me more than one corner to look at.

P.S. RW, don't take it personal, but I hate investment bankers at time. Why does Dean food needs 100 brands? why can they not compete with just one brand. But that an argument for another day.

[Root beer]

Check this out...

http://books.google.com/books?id=RaK7zan6IEUC&pg=PA187&lpg=PA187&dq=using+regression+formula+for+finance&source=bl&ots=izP13_9p2S&sig=8l8sdFc_WxaOEvY711VnkqbUsmg&hl=en&ei=H1AwSr-_Mo6Ntgfc68z-Cw&sa=X&oi=book_result&ct=result&resnum=7#PPA190,M1

Regressions are still being taught in today finance class. Just like every other formulas it has it time and place. Sometimes they work, sometimes they don't.

The link talks mostly how they are used to test relationship. Last year, I bet you could have got a linear equation out of oil price...it would have worked (the predictions that is). It just slowly kept going up.

Ah well. You can bring me other formulas they used to forecast the future with and it may not always work just like using regression. Future cannot be predicted 100% every single time. But my point is simply this: you can used regression to calculate future oil price, but if it becomes linear equation you better hope something crazy happen for the price of crude to fall.

[Uncle Leo]

In my line of work large scale manufacturing when oil prices were up we shiting in high cotton. We support the mining industry so equipment was being sold to support the excavating of the Tar Sands in Alberta. Also copper was at an all time high so the mining of copper was up due to this. The minute the prices fell manufacturing suffered. I know nobody likes to pay high gas prices, high steel prices and high copper pipe prices but it sure did simulate the ecomony when it came to manufacturing. On top of this we had the opportunity to finally make money on China instead of sending our manufacturing to them.

[SirSnookalot]

In my line of work large scale manufacturing when oil prices were up we shiting in high cotton. We support the mining industry so equipment was being sold to support the excavating of the Tar Sands in Alberta. Also copper was at an all time high so the mining of copper was up due to this. The minute the prices fell manufacturing suffered. I know nobody likes to pay high gas prices, high steel prices and high copper pipe prices but it sure did simulate the economy when it came to manufacturing. On top of this we had the opportunity to finally make money on China instead of sending our manufacturing to them.

I agree 100%

I owned a scrap metal company 30 years and in times of high commodity prices the volume of business I had was so significantly higher that I needed additional employees and equipment to handle it all.  The pendulum does swing the other way.

I still keep in touch with some people in the industry( retired now ) and I'm hearing China talk again and business is starting  improve a bit.

[tyrius.]

I bought up investment banker because RW is an investment banker.

You must be pretty rich if you buying up investment bankers.  They make a pretty good salary.  

Of course I know that IPO is where investment bankers are. That where they are root of all evil. They can overestimate the actual price.. Hey did you also know they also assist in merging? They can also be root of all evil in merging. My point? I hate investment bankers at time with their overestimation of the actual stock price and merging companies together. (doesn't that defeat the point of capitalism?

No it doesn't "defeat the point of capitalism".  It IS THE POINT OF CAPITALISM.  The investment bankers work to either buy or sell companies.  If they're working for the seller then their job is to get the highest price possible.  If they're working for the buyer then their job is to get the lowest price possible.  That's capitalism and that's their job.  If I try and sell you something isn't it prudent of me to get the highest price that I can get?

I also bought investment bankers up because I have read on account, an analyst made predictions and got fired due to investment bankers putting pressure upon them because the analyst themselves put sell rating on company that the investment bankers represent. The guy that put sell rating on Donald Trump bonds got fired (it later defaulted) The guy that put sell rating on Enron, he also got fired. I wonder why....

I can't even understand this paragraph.  What are you trying to say?  Your poor typing/word choice makes this one too painful to attempt to figure out.

I'm just simply saying regression CAN give you pretty good idea what it going be like within future. You're going to be wrong sometimes, and sometimes you are going to be right. I just believe I'm be right more than wrong.

A broken clock is right twice a day.

That chart you post...plug this year cost of oil, into a regression formula, and pick out a month, then when the month rolls around we'll talk.

Ok, how about comparing April 2007 vs April 2008?