On today’s show we’re taking a closer look at market analysis to really understand what some commentators are saying.
We’re seen stock market analysts try to explain market behaviour with mathematical equations. They think up fancy terms like “technical analysis” to describe market sentiment and they distinguish the market behaviour from fundamentals.
They even start to give the market a personality. These mathematical models get refined over time and become more and more accurate at describing past behaviour until you see a surprise event which is not described in the equations and then the model doesn’t work anymore. We’ve seen the models fail to predict virtually every major stock market event.
Well now, this same kind of flawed analysis is making its way into the world of real estate. I’m bringing this up because when analysts use equations and show sophisticated looking graphs, the seem smart and these analysts gain a following.
Host: Victor Menasce