I think it's misleading to point out a few winners, to suggest that the scan is successful. I've seen a few losers among the bunch, too, and that doesn't suggest to me that the scan is a poor one, any more than a few good picks suggest that the scan is a good one. It simply suggests that the performance of the picks is unknown.
To me, skeptical as I am among eternally hopeful technicians, traders and gamblers, it's hard numbers or it's meaningless.
I know someone who used to post a spreadsheet listing results for all his scan hits. The great performers made it to the top of the list as longs, and the poor performers went to the bottom as shorts. At the time of the actual trades, there was no way of knowing which were the longs and the shorts, so the whole spreadsheet was an absurdly self-deluded exercise in the astonishing money-making powers of hindsight.
If analysts want to believe in the power to predict the future direction of stocks, they should back up their statements with hard numbers, actual trades and precise projections that can be evaluated after the fact, and performance reports. But that's just my crazy view, because I'm a nonbeliever in most TA claims -- not all, but most.
I think most people endeavoring to predict the future direction of the market, or individual stocks, are kidding themselves. They go through years and years of this until they finally have the sense to give up. A few -- a small few, a tiny percentage -- develop a workable system, and work with it fully aware of its limitations. People with successful systems usually quit endeavoring to predict the direction of the market, too. That, at least, is my view. And I could be wrong.
I also suspect that most traders on boards such as this are either breaking even or losing money -- most, mind you, not all. There are a few who are capable of making money, and even a living, trading -- again, a very few, a small percentage. Even if they think they know where the market is going, they'll get shaken out frequently, and abandon their rules, their system, their convictions -- especially in this volatile market.
But people want to believe in magic, in predictions, however vague, however hard to pin down they are. My views above aren't a popular viewpoint, so I'll shut up. (Hurrah!) |
