The best charts clarify a situation. The same could be said of statistical studies as well. There is reason to believe that we should approach financial studies with a high degree of skepticism. Research in other fields shows that many studies are either cannot be replicated or are later refuted. The challenge is finance is even more difficult given the massive amounts of data available. One can create a study to fit a preconceived conclusion. The problem gets magnified when a study gets picked up by the mass media and its conclusions get scrambled like in a game of telephone. In today’s screencast we look at the challenge facing skeptical consumers of financial research.
Items mentioned in the above screencast:
Most investment research is backwards. It starts with a conclusion and seeks out data to fit the thesis. (A Dash of Insight)
The Super Bowl Indicator is really just a waste of time. (Marketwatch)
Would you trust a groundhog to predict the stock market? (Bespoke also Portfolio Probe)