Background: I once described how I use fellow engineers as contrary indicators. Engineers nearing retirement are best. When they walk up on their toes, sell. When they shuffle with their heads hanging, buy. One engineer in particular was such a precise indicator that, for example, he bought his first (and last) block of NASDAQ stocks on the day before the bottom fell out in 2000, and traded an economy car for a new Chevy Tahoe just before gas began to rise. As he came within 10% of the nest egg value he had targeted for retirement his moods intensified and he became a precise contrary indicator for stock market swings. Unwittingly I had even improved his precision by clueing him into the correlation. After that he would try to resist his own tendencies, only to betray himself a few times per year at major inflections.

Update: Well, he retired, and for a while I was partially blinded. But as luck would have it, he has come out of retirement to work part time. So, last week he bears down on me and loudly pronounces that the market is about to tank for three days and then run up. Why? He had committed to pull $28K out of a mutual fund to finance the purchase of a hybrid car and it would take three days for the transaction to clear. As I pondered whether or not he had given me a valuable stock market tip, it became clear that gas prices had peaked.

I know that many here are confident in their quantitative analysis. But I have to tell you that when I witness the ability of the human subconscious to process countless diverse inputs and arrive at precisely the wrong answer, I suspect that quantitative analysis is a distant second.

Alan Millhone asks:

I wonder what input your fellow engineers will offer on the current Minneapolis bridge collapse? Something I suspect in the way of construction repairs and one lane traffic triggered this horrible disaster. 

Rick Foust replies:

There has been no mention of a bridge collapse among our engineers. But your email gave me quite a start. My permanent residence is in Minneapolis, a small town I affectionately refer to as Mayberry, where 1500 souls live, in north central Kansas. I am away from home four days per week and don’t turn on the TV, so it came as a quite a shock to hear that one of our two tiny bridges had finally collapsed.

OK, I am not quite that naive, but the thought did cross my mind. Regarding an engineering assessment of the catastrophe in a somewhat larger Minneapolis, it may be a while before the engineering collective falls into sync with speculation on this event. 


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