Models.......................

 

But if you follow any modeled data series, you must always keep in mind statistician George E. P. Box's warning: "All models are wrong, but some are useful."       . . .

     Yet we place a great deal of faith in models.  The problem occurs when, as journalist Jonathan V. Last observes, we forget that models are "not a report sent back from the future."  He observes the three types of inputs that go into models:

        1. Stuff we know;

        2.  Stuff we think we know:

        3.  Stuff we have no idea about.

-Barry Ritholtz, How Not to Invest: The Ideas, Numbers, and Behaviors That Destroy Wealth—and How to Avoid Them