What could possible happen, the next month, 2 months,......12 months and how can I predict and be ready to act and profit off the: 1. Randomness, 2. Non-randomness (trends), 3. Chaos. Do I just sit there, reading the propaganda put out by the financial media, the gov. propaganda, and the elite experts, and trying to make helter skelter out of it.
Or do I wisen up and try to profit off of what ever happens. I am in this camp, and you can analyze the current situtation with readily available data to highly accurately profit off of everything and anything, not only stocks but everything, shopping trips to the supermarket using mathematics you learned in Sophmore year in High School. I mean if M-REIT CEO's only need to do simple addition math from 2nd grade days to earn 100's of millions a year in bonus, you should be able to beat the pants off these guys and get rich. Use of simple algebraic equations, assigning weights for probabilities and using those numbers to pin-point a strategy that harvest wealth off those you have no idea what is going on and is randomnly rolling with the waves.
Listen up: Random walk theory only applies to very short term, hours and days.
Non-random theory (trends) should be applied to mid to long term timeline, quarters, years, decades.
Chaos Theory - goes in cycles, like interest rate cycles of 30 yrs, or debt limit extension which seems short term but really is long term like the interest rate cycles of 20-30 years. Remember the 2011 debt limit extension, it was over in one month the can was kicked down the road, now two years later, we have 28 years left of can kicking.
We need to write an equation to value AGNC stock, using all the available data and then determine a strategy to profit. X(t) = R + X(t-1) + NR + C . X(t) = price of stock at time t, R= random disturbance term, NR = Non-random drift trand parameter, C= Chaos wave disturbance, X(t-1) = historical pricing