Is there anything more useless than a long newspaper article about where the
stock market might be headed? Dean Baker has nothing
good to say about Jeremy Peters, in the NYT, talking to
fundamental-analysis types and coming to the conclusion that stocks
are going up. But I doubt he’d be much more impressed by Jim Browning,
on the front page of the WSJ this morning, talking to technical-analysis types
and coming to the conclusion that stocks
are going down.
In reality, trying to forecast the stock market is a fool’s game, and no one
does it very well. Both of these articles are predicated on the extremely dubious
assumption that professionals in the financial-services industry who look at
the stock market all day are better at forecasting where it’s going to go than
would be, say, sheep farmers in Wisconsin. But this is not the case.
If I want a forecast for where the stock market is going to go, I’ll ask the
nearest five-year-old, and I’ll have just as much confidence in the result as
I would if I’d asked a chap who’s been drawing lines on charts since 1966. But
I doubt my five-year-old’s prognostications would be considered newsworthy enough
to make it onto the front page of the Wall Street Journal.