The Folly of Stock Market Forecasting – Alpha Architect
The idea that one can predict stock market movements is somewhat insane.
The major problem with stock market forecasting is the lack of evidence that it is possible. I am unaware of any market commentator that has been successful–on a consistent basis–at predicting the future direction of the market.
Certainly, every once in a while a pundit or luminary may get something right, but it doesn’t occur often enough by the same party to demonstrate any significant level of skill. Throw enough darts at the dartboard, and your bound to hit a bulls-eye sooner or later.
Corporate CFOs and other finance professionals routinely perform these types of assessments, particularly when deciding which projects should receive capital and which ones should be set aside or abandoned. Unfortunately for them, their estimates don’t appear to be much better.
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