Quote from: fillippone on October 10, 2019, 09:31:51 AM

Quote from: mu_enrico on October 08, 2019, 07:54:09 PM

Quote from: fillippone on October 08, 2019, 07:45:57 PM

It is a different model from the full model that took in account I believe 111 monthly data points between 2009 and 2019 (r2 is also different).

Okay, then you have a good case about this model's ability to forecast.
However, careful about "overfitting" and let's see about it in the next few years

Again, the author explored this possibility, and found some nice evidence:

Quote

I am aware of the potential dangers of backward fitting and over fitting. However, the #bitcoin S2F model doesn't seem to have that problem.

https://twitter.com/100trillionUSD/status/1148255654051794944?s=20

As you can see, taking different subset of sample points, doesn't change dramatically the model: hence overfitting hypothesis can be safely discarded.
This is very important, imho, you were right pointing to this as a potential invalidating point for the model, but this can be safely dismissed.

Little update on this.
Plan B just tweeted this:

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#Bitcoin stock-to-flow model on 2010-2012 data still usable in today. It predicted post-2012-halving and post-2016-halving levels quite well. Will it hold again, after May 2020 halving?Crossed fingers

https://twitter.com/100trillionUSD/status/1253281280772407298?s=20

So, one year has passed since the quoted image, and parameters aren't dramatically changed.

This is why S2F is a robust model, whaile others are just line drawn over a chart.

Like this one, for example:

Diminishing returns on a log chart in 2014:

Diminishing returns on a log chart in 2020:

Source

You see parameters aren't constant.