I know you've always dreamed of it. But you are probably asking yourself . . how could I ever develop the wisdom and insight to be a Kitco gold expert? It must take years . . . no, decades . . . of intense study to develop the necessary mental acuity.
Anyway, Otto at the IKN blog claims that the Kitco gold experts are as useful as monkeys with darts. I say they are less useful. Let's investigate, using the table of data helpfully posted at the above link.
The red dots are a scatterplot of % of bearish experts vs the weekly performance of GLD; the blue dots are % bullish experts vs weekly performance. It looks like monkeys with a dartboard.
But when we compare the expert consensus against the previous week's behaviour of GLD, we see a different pattern. On the week following a falling price in GLD, most of Kitco's experts are bearish. When GLD rises, most of Kitco's experts become bullish the following week.
Kitco's experts are a lagging indicator.
If you want to make use of them in your investment planning, you should first invent a time machine . . .
Anyway, Otto at the IKN blog claims that the Kitco gold experts are as useful as monkeys with darts. I say they are less useful. Let's investigate, using the table of data helpfully posted at the above link.
The shotgun approach to gold forecasting
The red dots are a scatterplot of % of bearish experts vs the weekly performance of GLD; the blue dots are % bullish experts vs weekly performance. It looks like monkeys with a dartboard.
But when we compare the expert consensus against the previous week's behaviour of GLD, we see a different pattern. On the week following a falling price in GLD, most of Kitco's experts are bearish. When GLD rises, most of Kitco's experts become bullish the following week.
Kitco's experts are a lagging indicator.
If you want to make use of them in your investment planning, you should first invent a time machine . . .
Recency effect. Outlook is always dependent on projecting what's already happened, indefinitely, into the future.
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