I've clarified my post as indicated above. To your point, most of those "academics" likely understand the pitfalls in using such "research" to try to forecast/predict future market behavior. So, they write papers, obtain research funding, write books and receive awards based upon efforts that "explain" past market behaviors. At best, they develop models that identify certain outputs that correlate in some way with certain combinations of inputs. As anybody with the most basic statistics knowledge understands, a high correlation does NOT establish a cause and effect relationship. I doubt any of them have ever published a paper that claims to be able to forecast future market performance.vineviz wrote: ↑Sun Jun 24, 2018 8:40 amBecause obviously all those academics, with their Nobel Prizes in economics and PhDs in mathematics, never learned the properties of a normal distribution.
That's where our profit seeking middle men come into play (i.e. financial advisors and those who feed them). These lesser educated folks are happy to make the "leap of faith" that something that "explains" historical market performance must be "reliable" for forecasting future market performance. I put reliable in quotes, because we often see such silliness as "the market's forecasted nominal real gain over the next decade will be 4%, but that's only accurate plus or minus 10%, and that's only at a 90% confidence level; so it could really be just about anything." In other words, they thoroughly cover their butts. In still more other words; "nobody knows nothing."