Chapter 19

Forecasting Finances Is Way Easier than the Weather

In This Chapter

arrow Analyzing data

arrow Looking at the past

arrow Predicting the future

This chapter involves trying to find a little bit of Zen. Really, forecasting involves the ability to turn off what you think you already know and live just in the moment. Only when you’re living exclusively in the present will the past and future speak to you. This chapter is all about using current and historical data about the corporation, the industry, and the economy to predict the future. Of course, your predictions may be wrong, but you can also use the data to determine the probability of being wrong and by how much you may be off. As a result, this chapter uses a lot of beginner statistics and probability, but I show you some shortcuts. The statistics I explain include much of the statistics used in equations throughout this book, so if you don’t fully understand how to do any of it, you may want to refer to those equations.

Seeing with Eyes Analytical

To successfully forecast finances, you have to let go of your preconceived notions about what you think the future will look like and let your analytics guide your ideas. Way too many people ...

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