The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1934-09-27
Today 5 Science
: By DAVID DIETZ

MO data exists upon which any scientific forecast
~ of the future of American business activity
the stock market can be based. That is the conclu-
sion of Professor Edwin B. Wilson of the Harvard
School of Public Health. former president of the
American Statistical Society, and one of the nations
most brilliant StatisticianS.
There are no observable periods in American
business activity he says thus making it impossible
at present to apply mathematical analysis to bust
activity
II should be explained that Professor Wilson is
using the word period in its scientific and mathe
NAUTICAL and not in the loose sense that We do
in everyday conversation when speak of period
Of low prices" BY period he means a definite set
of conditions factors which are periodic, that is.
which occur at definite and regular intervals.
In a recent address. Professor Wilson out
spoken in his criticism of those who sought to
cast business activity and the stock market In par
ticular he called attention TO book entitled The
Stock Market Crash and After" published by Pro-
fessor Fisher of Yale university in 1880
TN view Of what have said about the difficulty.
J. If not the impoSsbility Of forecasting business
activity stock prices with any degree of assurance,
you will realize that l could not blame professor
Fisher for his wrong forecasts because they were
wrong" Professor Wilson said.
True. I do not think that distinguished econ
omSt should make such wrong forecasts But that is
because think that he should have known fully
we'll by 1929 that there little to believe that
sound forecasts can be made"
Colonel Leonard Ayres' Index of American Bust
ness Activity" prepared for the Cleveland Trust
Company gives an index by months back TO 1870.
This is the longest in existence and Professor
Wilson and his assistants used it for their study.
They applied to il a method OF mathematical
analysis developed some thirty years ago by Sir
Arthur SchuSter for the analysis Of astronomical
and meteorological phenomena. This method makes
IL possible 10 develop curve known the period
ogram from long series of data which contains
period within 1t. The peak of the curve indicates
the period.
Il 10 his perlOd6gram. Sir Arthur SchuSter devised
a test 70 determine whether the fluctuations in
series were not chance fluctuations.
When this test OF SchuSter'S applied.
found that il showed that the oscillations Of Ayres
index OF American business activity essentially
fortuitiouS." he says.
As a third test Professor Wilson took the Ayres'
index IN which forytwo swings Of business activity
appear. These forty-two swings then cut apart
and rearTanged in and fictitious series. This
then analyzed.
test. but significant periods by the modification
which has been proposed for testing significance"
he says. AS II Is difficult 10 believe that random
Encouragement OF the swings could have periods. We
infer that the modified test is invalid and the
periodogramS behave similarly with respect TO the
tests We infer that there is more and less pc
rT0diclfy in AyreS Index Of American Business Ac-
tivity than there IS IL q random Encouragement OF
is component individual full swings"