3 Questions That Stump Investment Experts
They can guess, but they do not know.
By now, even casual observers realize that stock market forecasts are bogus. They’re as accurate as when former NFL players predict the next Super Bowl winner, but less entertaining. Knowing the direction of stock prices, never mind the magnitude, is beyond human ability--even with computer assistance.
Less appreciated is that even knowledgeable investment professionals do not understand basic aspects of the stock market. Analyzing its workings is surprisingly difficult. For one, the forces that move equity prices cannot be directly observed. For another, stocks do not lend themselves to scientifically controlled experiments. We cannot rewind history to test how equities would have behaved had something been changed.