Halliburton Company (HAL)

[WildCatStocks]

Here is a little math for you.

Mathematically, a share price, HAL, (we use a monthly closing price adjusted for dividends and splits) can be approximated by a linear function of the lagged difference between the core and headline CPI:

HAL = 42 – 3.5dCPI(t+t1) (1)

where dCPI(t+t1)=CC(t+t1)-C(t+t1), t is the elapsed time, and t1=0 year is the time delay between the share and the CPI change. In the original model, the CPI difference had no time lag behind the share price, t1=0, and we covered the period between 1999 and 2009. The upper panel of Figure 1 shows the original model performance between July 2003 and February 2012, with the standard model error of $4.51.