08 August 2010

Skill in Prediction: Part II, The Naive Forecast

I am picking up on an earlier discussion of skill in prediction (Part I is here).  Above is a dataset.  What it is does not matter, it could be wheat prices on the Chicago exchange, it could be the stock price of BP in recent weeks or it could be the number of hits on this blog.  The reason that the dataset does not matter is that I would like you to suggest a forecast -- a naive forecast.  The less you know the more naive your forecast of what the next few dozen point might be in the dataset.

So in the comments please suggest a forecast of what will come next, and please explain the basis for your naive forecast.  To aid the more quantitatively inclined, I will reproduce the data in the first comment below.  After I get some suggestions for a naive forecast, I'll move to the next step.