

Can markets be accurately modeled and thus predicted? - dohko
http://blog.bodhi49.com/2012/09/can-markets-be-accurately-modeled-and.html

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lutusp
Not this again. No -- the answer is no. The behavior of a fair market cannot
be predicted. Only unfair markets work that way, for example markets sullied
by insider trading.

Here is the proof -- the "The Wall Street Journal Dartboard Contest":

<http://www.investorhome.com/darts.htm>

A quote: "The pros barely edged the DJIA by a margin of 51 to 49 contests. In
other words, simply investing passively in the Dow, an investor would have
beaten the picks of the pros in roughly half the contests (that is, without
even considering transactions costs or taxes for taxable investors)."

What does it mean that investing in a market average fund does as well as
hiring a professional investment counselor? It means _the market cannot be
predicted_ and investment counselors are making promises they cannot keep.

The only predictable markets are those that are rigged in some way, that break
the rules, or the law.

------
mooism2
There is a theory which states that if investors ever do manage to accurately
model and predict market behaviour, the markets will vanish and be replaced by
something even more inexplicable.

There is a further theory which states that this has already happened.
Repeatedly.

\--- bastardisation of a Douglas Adams quote.

