What Did I Tell Ya

So, remember this article I wrote in December? And this article? Both talk about prognosticating the growth of the NASDAQ. So, I decided to revisit it since 2020 is OVER.

So it was the end approaching, and I estimated the NASDAQ would finish around 30–40% for the year, and look what happened:

Figure 1.

Yeah, that happened.

Let’s revisit the yearly history shall we:

Figure 2.

Take a look at this. These are the years where the previous three years followed a pattern of negative-positive-positive (left to right is oldest to youngest, so if we are concerned about the year 2021, 2018 was negative, 2019 was positive and 2020 was positive):

Figure 3.

There were only nine years that follow this pattern. Out of these nine, four had negative growth.

Alternatively, if we look at years where the two previous years had >30% growth, we have the following result:

Figure 4.

Not to be alarmist though, if we look at the summation of the previous three year rates and those that have similar sums as 2021, we have this:

Figure 5.

Out of the seven years that had similar or greater sums of growth, four were down years.

What about averages instead?

Figure 6.

For 2021, the average growth of the previous three years was 24.99%. As in Figure 6 above, there were six other years where this was the case or greater, and 60% of those were down years.

If I tried 5 years back instead, we get about the same, where the proportion of down years seems to oscillate between 40–60% or roughly random chance.

So, I guess what I’m saying is, my predictive methods above are not worth anything. If I find a model that is > 90% accurate in all cases, I’ll let you know, but don’t hold your breath.

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@davidinvests