Research confirms a “wisdom of the crowds” effect insofar as only a few analysts seem able to consistently outperform the consensus forecast compiled from many different analysts.
One of the purposes of the Essential Listening series is to help in discovery, says Tadas Viskanta of Abnormal Returns. Among the challenges facing professionals, including those of us in the investing field, is finding new and interesting content.
Today, it's hard to remember Enron as anything but a classic example of hubris and fraud. But the market didn't always know that. A recently revealed Bear Stearns research note shows just what the market thought of Enron in the heady days of early 2001.
Why bother with long-term return expectations? For asset owners or asset managers compiling a strategic asset allocation, long-term forecasts are relevant and necessary. When combined with estimates for risk and correlation, these forecasts allow investors to fine-tune their long-term benchmarks and consider trade-offs between asset classes to enhance the implied risk and return profile of the fund.
Wall Street Journal columnist Jason Zweig recently wrote of a truism that is rarely acknowledged within the investment industry: Wall Street market forecasts offer little to no value. While it may be a fruitless exercise, hearing the prognostications of acknowledged market experts remains a guilty pleasure of many investment professionals, which may explain why nearly 1,000 of them turned out last week for CFA Society Toronto’s 58th Annual Forecast Dinner.
This book is an invaluable resource for anyone striving for a command of the inner workings of the economy. The author details his impressively rigorous forecasting process, which draws on all major schools of macroeconomic thought. He also dives deep into the data to explain some of his expectations.
Walter A. Friedman tells the captivating story of some pioneers of what many still call the “black art” of economic forecasting and credits them with inspiring succeeding generations of forecasters who may or may not have raised the art to a science.
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