Newbies Investing Questions

[bar1080]

90 years ago he showed stock forecasting was BS:
--
"Born in Chicago in 1891 and educated at Yale, Cowles became a successful businessman. But his true passions were economics and statistics. One question in particular exercised his mind — is it possible to beat the stock market? — and in 1927 he set out to find the answer.

Over a period of four-and-a-half years, Cowles collected information on the equity investments made by the big financial institutions of the day as well as on the recommendations of market forecasters in the media. There were no index funds at the time, but he compared the performance of both the professionals and the forecasters with the returns delivered by the Dow Jones Industrial Average.

His findings were published in 1933 in the journal Econometrica, in a paper entitled Can Stock Market Forecasters Forecast? The financial institutions, he found, produced returns that were 1.20% a year worse than the DJIA; the media forecasters trailed the index by a massive 4% a year.

“A review of these tests,” he concluded, “indicates that the most successful records are little, if any, better than what might be expected to result from pure chance.”

https://www.evidenceinvestor.com/cowles-forecasters-cant-forecast/