A few years ago in 2010 one newsletter written by Robert Prechter predicted the DOW would plummet to 1,000. It would take a real disaster for Prechter’s prediction to occur, but that wasn’t the point. The point was, in our opinion, to sell newsletters not give financial advice.
Mark Hulburt, a man known for tracking newsletters, suggests newsletters are often incorrect. Proven records have shown that when the newsletters are optimistic the market goes down and vise versa. Negativity sells.
When considering television and magazines, the main priority is selling advertising. Additionally, an author’s objective is to sell their book. The focus is rarely the client. On the other hand, financial advisers and analysts usually have clients as their main focus.
Here is a game analogy:
Slot machines: whether you are a beginner or an expert, the percentage of winning remains the same.
Chess: experts will always win over a novice player.
Poker: probability.
Beyes Theorem on probability states that there are needed adjustments once one obtains more data, statistics and/or experience.
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I want to hear your opinions; please leave a comment below and let me know your thoughts.
