Looking ahead: With stats or a crystal ball
All of us would probably like to know what’ll happen next; it’d make life so much easier, knowing what to prepare for and when – no doubt leading to a more fulfilling, if not accepting/fatalistic existence. Mind you, pity the element of surprise would go out the window.
Attempts at looking into the future have been with us for millennia, from gazing at the stars, checking omens and listening to witches and soothsayers, calibrating nature’s cycles and comparing current conditions with those experienced in the past. All are valid but work in different ways. Unfortunately still many class technical analysis in with Mystic Meg type of thinking.
If only they’d stop and think – at least sometimes. What we do is constantly look to see how things are aligned, though only astro-financial analysts tend to use the skies. We listen to what people are saying, calculate consensus opinion, and come to our own matrix of outcome probabilities. We compare previous cycles with what we are living through now, and try and plot our path – even when we are at an all-time low or high, we can still gauge the chances of continuation or reversal.
Economists work in a slightly different way, assuming recent trends can be extrapolated ad nauseam, hopefully big data adding to their knowledge. So too do trend channels and the Andrews Pitchfork (which incidentally is very much like mean regression); the advantage of technical analysis is that it tells you when things have changed.
Sales and marketing strategies depend heavily on forecasting. Car companies spend small fortunes deciding which colours and shapes will be stylish next year. Fashion, of course, depends totally on this.
But I heard of a new one recently: ‘food futurologist’. Magazine Market Life (boroughmarket.org.uk which claims to have been going for 1000 years – in for the long haul, obviously) had an interview with Dr Morgaine Gaye who says, I ‘look at the trends for the future of food. I look at the why behind patterns of behaviour, and assess what people are likely to want in three, four, five years’ time’. Working in the long term scheme of things then. ‘Futurology is both a science and an art. We’re really looking for social indicators: sometimes it’s just about being observant and noticing things that aren’t quite what we consider the norm. It can be anything.’
Sounds like common sense to me – and a lot like technical analysis.
Tags: fashion, food, marketing, Predicting
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