For people interested in Gold (V: hint, hint)

> As for the 46.5 years vs. 49 years, yes, he
> has changed it - but I don't see it as a
> problem. This is partly due to culture,
> since if people start having children later,
> then the point of "peak" spending
> will change. There's nothing wrong with
> making a small adjustment like this.

> If you say that you can't adjust for this,
> then you're saying that the age of peak
> spending should never change. That's
> unrealistic. The POINT is that the age of
> peak spending roughly correlates with the
> stock market, which seems to be true most of
> the time.

I am not saying the offset cannot change. But, from my understanding, he has changed the offset for the entire time period. He has not adjusted the offset as time has gone along.

So the first chart was offset by 49 years. Now his new chart didn't fit he had to change the entire chart's offset by 46.5 years. THAT is changing his chart to fit what he want to prove.

Doing that, I bet I could make a radom ECG stip match the stocks.

> However, there's an inaccuracy in the
> model....

> He looks at BIRTH RATES. What he really
> wants to look at is the POPULATION SIZE at
> the age of peak spending (around 46-49
> years). While there will be a large
> correlation of the population size at those
> ages with the shifted birth rates, it won't
> be exact - because of immigration.

I also question his peak spending idea...

At 49 (or 46.5) most parents don't have kids living at home. Certainly not the Boomers. Tha would mean, if they had a child at 25, the child is 21-24 and at home.

That's a little unrealistic in my opinion.

I think he is finding arguements to fit his model. And I am sure we could find equally strong prof that peak spending happens at other times instead.

> P.S. There is another effect - the more
> people know about this model, the more it
> will affect their behavior. So, the more
> this model is well-known, the less accurate
> it will be - because the knowledge of the
> model itself will start to affect people's
> stock-buying and selling behavior.

Yes. That's what I said... just knowing about it changes it.

The
> effect should be that everything the model
> predicts should start happening sooner. So,
> for example, if everyone expects a
> depression starting around 2008 - they might
> start selling their stocks earlier than that
> to be safe. This could mean that the
> depression could occur even earlier than the
> model predicts.

If that is the case, then the peak spending reason why goes out the door. How would he adjust for that? Change the offset again, perhaps :o))

I actually find it interesting. A piece of info to keep up my sleeve and bring out and consider.

One thing I wonder... seeing as the stockmarket didn't go as high as he said... and it goes as low... that wold keep it about it's current level for the next whole bunch of years, wouldn't it?

I wonder why the mainstream hasn't picked up on his theory?

On another note... Beating The Streat (Peter Lynch). Have you read it? Would you recommend it as a good book for a novice know-nothing-about-the-stockmarket guy like me?

Michael Ross