Graphing Accuracy of Forecasts

Graph­ing a series of mul­ti­year fore­casts vs. actu­als can pro­vide insight into fore­cast accu­racy and meth­ods. This graph looks at a series of rev­enue per share pro­jec­tions for Apple

Graph of Mul­ti­year Fore­cast vs. Actual EPS for Apple

Note that none of the fore­casts showed the expo­nen­tial growth, but assumed essen­tially lin­ear growth. (the fore­cast lines are gray and extend for mul­ti­ple years. Actu­als are blue line. The full analy­sis is by Horace Dediu at Asymco.com. A sim­i­lar tech­nique was used by the New York Times in analy­sis of fed­eral bud­get fore­casts.

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