Topic: How To Invest

What is Pat’s commentary for the week of October 4, 2022

Article Excerpt

As our long-time clients and readers know, we generally have a low opinion of stock market indicators. Promoters of market indicators like to portray their discoveries as the product of a great deal of investment research, just like scientific studies. This is a ruse at best (or, in rare cases, a delusion). Most inventors of indicators just draw conclusions and base market predictions on sketchy numerical studies with carefully chosen start- and end dates. With most market indicators, if you lengthen (or shorten) the period(s) under study, you’ll generally find that the indicator only works sporadically, if it ever worked to begin with. The funny thing is that something like this even happens in genuine scientific research. It happens so often that skeptical scientists have given it a name: the replication crisis. To paraphrase Wikipedia, “It has been found that the results of many scientific studies are difficult or impossible to reproduce. The replication crisis is frequently discussed in psychology and medicine, as well…