I just want to point out that when you see trend lines in any charts I make please don't read much into them.
The only thing that can predict the future is a time machine. I don't have one of those. Heck, I don't even have a crystal ball. My trend lines are simply there to give you a "feel" for one possibility out of many (an infinite number).
If the data seems to be following a straight line then I pick a straight line to show it. If the data is wobbling all over the place then I simply find a similar wobbly line to show it. Please don't confuse cause and effect or come to believe in the wobbly line I chose just because it seems to match the data. I like to get a "feel" for the data, much like an artist might. It doesn't have much intrinsic value though.
Excel Polynomial Trendline Equation doesn't accurately predict future data
If finding a suitable wobbly line that matched past data was all it took to predict the future, I could tell you what the weather will be like 10 years from now. Not going to happen, lol.
I would also refer you to the 10 Year Treasury Yield post. Note that I have two charts of the data with two different trend lines and the predictions into the future are exact opposites. Clearly one of the two must be wrong and most likely neither are right. It is up to the person reading the charts to attempt to make sense of it (not that we are any better at predicting the future than Excel is when it comes right down to it).
This was inspired by a comment left by jus me who pointed out the risks in my trend lines. Agreed!
Posting Resumes Next Week - I’ve been tied up with some personal matters the last couple of days, so I haven’t been able to blog on Survival And Prosperity as much as I’ve wanted to. ...
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