A.I.M. Users Bulletin Board

[SFSecurity]

Hi Gang, It's clear from some studies that have been done that forecasts are, for practical purposes, useless.

"In 2017 one of the present authors and his colleagues published an in-depth analysis of 68 market forecasters, including many prominent figures in the industry, some of whom employ technical analysis and others of whom do not. Expanding on an earlier study by the CXO Advisory Group, they analyzed forecasts based on two key factors:

1.) The time frame of the forecast. Forecasts are categorized as up to one month, up to three months, up to nine months or beyond nine months.
2.) The importance and specificity of the forecast. For example, a forecast that states “the market will be volatile in the next few days” is not a very specific forecast, but the forecast “the market will experience a correction” is more specific and thus more important.

The study found that the average accuracy score of these forecasts was 48%, not significantly different than chance, and the distribution of scores followed a Gaussian bell curve indistinguishable from that of a distribution of random deviates. In short, there was no statistically significant evidence of any overall skill."

http://mathinvestor.org/2018/11/profits-prophets-and-pseudoscience/