Ep. 850: David Hand Interview with Michael Covel on Trend Following Radio
Michael Covel's Trend Following
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The Importance of Predicting the Future
Sometimes when we don't have all the data, we still want to be able to extrapolate to the future. This becomes really tricky because this becomes often people, they want to make predictions. One can build an economic model based on past data and it can be very predictive, very accurate. But of course, if it then turns out that the range of variation in your past data was limited, then as things start to sort of bounce against the boundaries, go to more extreme levels than you've encountered before, your model starts to fall for bits. It's not just in the markets. Physicists have something called cosmic variants which describes the same sort of thing. You look at a
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