Its a given with any such chart that there may not be any connection. What you do in that situation is you pay attention to the correlation until it breaks down. In the investing world, this is one way an investor "listens to and obeys the market".
I think making spurious correlations is a problem. I think an inability to recognize patterns is just as big of a problem, however. In the end, it takes critical thinking skills to discern between the two. Unfortunately, the Wason Selection Task suggests that a very tiny percentage of people have the critical thinking skills neccessary. only about 3% of the general population can even pass the Wason test, so an ability to discern between the points made here is pretty much lost on humans.
Hi BrianLet me ask you something, since you appear to have such a high opinion of your own critical thinking skills:
Why don't you ever give examples that are outside of your own experience? Why is it that, when you're trying to explain correlation and causation, you have to talk about the market, or that when you talk about critical thinking, you go back to this Wason Selection Task?
While you're so busy criticizing the critical thinking skills of others, and putting yourself on that 3% pedastal, you seem to have an originality problem.
I'm sure you do very well in the gold market, and that's all very interesting, but when it comes to applying it to the outside world, things fall apart. Why is it that your pages of football predictions have shown conclusively in two of the last three years that the Patriots and Steelers would not win the Superbowl? Because you hated Belichick and you hated the Steelers. That's one piece of correlation that everyone but you can see.
I hate to break it to you, but you're not a supergenius. Trust me on this. You're a smart guy with a unique set of social skills who does what most smart people do - you cling to the things that you know best in an effort to preserve that feeling of superiority you get when you're right.
That's cool, and it's probably served you well over the years. But let me tell you, there's a whole world outside of people who have a good time without quoting the Wason Selection Task or tasting the flesh and they even admit it when they make mistakes. Join it, instead of bragging that you're able to observe something that's elementary to you, but that will "probably be lost on most humans".
Thanks
Fred