Beware: sometimes, there’s no raisin for it

Time to go long Raisin Maid?

My father occasionally warned us kids of false correlations, and used the tale of the investment advice dispensed by a Department of Agriculture employee to illustrate his point. In 1928 this genius tracked the price of sultana raisins and the Dow Jones average, going back decades, and showed a nearly perfect correlation between the two. Looking at the market predictions for raisins in the coming year, he predicted another boom year for the stock market. The following year, and for the first time since 1884, the two prices diverged, rather dramatically.

The Commander’s lesson came back to me this morning, when I stumbled across this site, “Spurious Correlations”. There are lots of fun ones here, and they serve as a good reminder for when the “experts” team up with the media to announce another scare story.

(okay, I could maybe see a correlation here if they were counting the number of spouses thrown out of a fishing boat, but otherwise …)