If there’s one thing we know, it’s that even experts with fancy computer models are terrible at predicting human behavior. Financial firms with zillions of dollars have spent decades trying to create models that will help them pick stocks, and they have gloriously failed.
Scholars at Duke University studied 11,600 forecasts by corporate chief financial officers about how the Standard & Poor’s 500-stock index would perform over the next year. The correlation between their estimates and the actual index was less than zero.
And, if it’s hard to predict stocks or the economy, politics is a field perfectly designed to foil precise projections.
Read it all.
Posted November 1, 2012 at 5:15 am
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