Sunday, November 18, 2012

Exponential Trend Failure of the Day (Musical Tribute)


Click to enlarge.

Mere words cannot do the trend line in blue justice.



Source Data:
St. Louis Fed: Industrial Production: Durable Materials

9 comments:

Stagflationary Mark said...

Note that the "sure thing" exponential trend in blue broke spectacularly even with an r-squared of 0.992.

Rob Dawg said...

Overlay inflation on top of a best fit sigmoid curve function.

Stagflationary Mark said...

Rob Dawg,

It certainly has that look about it.

Rob Dawg said...

Something about diminishing returns... I'll remember eventually.

Stagflationary Mark said...
This comment has been removed by the author.
Stagflationary Mark said...

Rob Dawg,

Diminishing returns you say.

Inflation Adjusted S&P 500 Index (October 2012 Dollars)

2nd attempt's the charm hopefully.

Stagflationary Mark said...

(It does not include dividends.)

Rob Dawg said...

It does not include index component or weighting substitutions either. An important consideration for longer time series.

Stagflationary Mark said...

Rob Dawg,

Welcome to the new century.

Home of the "survivor ships"!

Sigh.