FYI: Forecasting: the attempt to predict the unknowable by measuring the irrelevant; this task employs most people on Wall Street.”
The words of Jason Zweig, author of the Devil’s Financial Dictionary, are particularly apt at this time of year. We hear a lot from financial forecasters every January, as strategists prognosticate on what’s in store for markets for the year ahead, even though decades of research confirms the prediction game is a pretty fruitless one.
As far back as 1933, US economist Albert Cowles concluded even the most successful market forecasters did “little, if any, better than what might be expected to result from pure chance”. Cowles conducted a larger follow-up study 11 years later; the results were no different. Since then, studies have investigated the accuracy of forecasts from market analysts, investment newsletter writers, financial journalists, and various other investment experts. Suffice to say, today’s forecasters are no more accurate than their predecessors in the 1930s.
Regards,
Ted
https://www.irishtimes.com/business/personal-finance/why-do-we-bother-with-stock-market-forecasts-1.3747774
