And with enough people constantly trying to predict the market, inevitably some get it right. They make a lot of money, they're heralded as geniuses, and we hear about them in the news. We don't hear about everyone else who failed, or when the market-timing winners turn out to be repeat failures in subsequent years.
Put a bunch of people in a room and have them start flipping coins. If there are enough people playing the game, chances are somebody will end up tossing many heads in a row. If they keep flipping long enough, chances are they'll revert back to the mean. This is a pretty good model of market prognostication.
And with enough people constantly trying to predict the market, inevitably some get it right. They make a lot of money, they're heralded as geniuses, and we hear about them in the news. We don't hear about everyone else who failed, or when the market-timing winners turn out to be repeat failures in subsequent years.
Put a bunch of people in a room and have them start flipping coins. If there are enough people playing the game, chances are somebody will end up tossing many heads in a row. If they keep flipping long enough, chances are they'll revert back to the mean. This is a pretty good model of market prognostication.