{"id":532,"date":"2009-01-24T03:39:08","date_gmt":"2009-01-24T03:39:08","guid":{"rendered":"http:\/\/meadowparty.com\/blog\/?p=532"},"modified":"2009-01-24T03:39:08","modified_gmt":"2009-01-24T03:39:08","slug":"stock-market-forecasting","status":"publish","type":"post","link":"https:\/\/meadowparty.com\/blog\/2009\/01\/24\/stock-market-forecasting\/","title":{"rendered":"Stock-market forecasting."},"content":{"rendered":"<p>Interesting <i>Wall St. Journal<\/i> article today on <a href=http:\/\/online.wsj.com\/article\/SB123275782424412007.html>why most stock-market forecasts are wrong<\/a>. The whole article is a good read, but here&#8217;s the part that surprised me:<\/p>\n<blockquote><p>History shows that the vast majority of the time, the stock market does next to nothing. Then, when no one expects it, the market delivers a giant gain or loss &#8212; and promptly lapses back into its usual stupor. Javier Estrada, a finance professor at IESE Business School in Barcelona, Spain, has studied the daily returns of the Dow Jones Industrial Average back to 1900. I asked him to extend his research through the end of 2008. Prof. Estrada found that if you took away the 10 best days, two-thirds of the cumulative gains produced by the Dow over the past 109 years would disappear. Conversely, had you sidestepped the market&#8217;s 10 worst days, you would have tripled the actual return of the Dow.<\/p><\/blockquote>\n<p>I wonder what bearing this has on the debate over whether or not share prices follow a <a href=\"http:\/\/en.wikipedia.org\/wiki\/Random_Walk_Hypothesis\">random walk<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Interesting Wall St. Journal article today on why most stock-market forecasts are wrong. The whole article is a good read, but here&#8217;s the part that surprised me: History shows that the vast majority of the time, the stock market does next to nothing. Then, when no one expects it, the market delivers a giant gain [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[844,324,190],"class_list":["post-532","post","type-post","status-publish","format-standard","hentry","category-economics","tag-economics","tag-finance","tag-links","entry"],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/meadowparty.com\/blog\/wp-json\/wp\/v2\/posts\/532","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/meadowparty.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/meadowparty.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/meadowparty.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/meadowparty.com\/blog\/wp-json\/wp\/v2\/comments?post=532"}],"version-history":[{"count":1,"href":"https:\/\/meadowparty.com\/blog\/wp-json\/wp\/v2\/posts\/532\/revisions"}],"predecessor-version":[{"id":533,"href":"https:\/\/meadowparty.com\/blog\/wp-json\/wp\/v2\/posts\/532\/revisions\/533"}],"wp:attachment":[{"href":"https:\/\/meadowparty.com\/blog\/wp-json\/wp\/v2\/media?parent=532"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/meadowparty.com\/blog\/wp-json\/wp\/v2\/categories?post=532"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/meadowparty.com\/blog\/wp-json\/wp\/v2\/tags?post=532"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}