Is Stock Market Price Predictable?

  • Thread starter tronter
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In summary, the conversation discusses the predictability of future price movements of assets, such as stocks and futures. It is mentioned that each stock is independent and influenced by the actions of the company it represents. While it is not possible to predict anything with certainty, some predictions have a higher margin of error than others. It is advised to do thorough research before investing and to consider the motivations and actions of those involved with the stock. There is also mention of software that can predict stock prices to a certain degree, but it requires small transaction costs to be profitable.
  • #1
tronter
185
1
Do you think that the future price of an asset, such as a stock or future is predictable to a certain degree? Or do they behave randomly (i.e random walk)?
 
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  • #2
Ebay goes up and down in 3 month cycles, apple does the same sort of trend but it goes up steadily, just more or less gains at certain times of the year. google is in a straight line up.

Each stock is independent and you need to remember, its not just a number that randomly moves, its the output of a company that can do just about anything with its money, good or bad
 
  • #3
Going by your name, I'm going to guess that you are a resident of Hogtown and are therefore referring to the TSE. Regardless, I don't have an answer. You can predict some things with some reasonable degree of certainty, or you can listen to the experts and buy Bre-Ex instead. It's a crapshoot, but with somewhat better odds than a VLT.
 
  • #4
It is not possible to predict anything in the real world with certainty. So all predictions have their margins of error. Stocks tend to have relatively high margins of error.
 
  • #5
when you invest, you need to remember that on the other side of that stock ticker is a group of people, each individually motivated for different reasons and being order ed around by managers, potentially good or bad. People mess up, we pull through, stuff happens. my best advice is do your research first. get soem practice in even at einvesting's website if you want
 
  • #6
yes but I am also talking about futures Ki Man. Do you know what futures are? Have you studied financial math?
 
  • #7
tronter said:
Do you think that the future price of an asset, such as a stock or future is predictable to a certain degree? Or do they behave randomly (i.e random walk)?
I spent a few years writing software to predict future price movements. It shows that stock price movements are predictable at least one day in advance, to a degree at which only a brokerage house could (greatly) profit. The transaction costs must be very small (like 0.05%) to profit. I didn't test futures.
 

1. What is the stock market and how does it work?

The stock market is a public market where investors can buy and sell shares of publicly traded companies. It allows companies to raise capital by selling ownership stakes to investors. The stock market works by matching buyers and sellers through a system of exchanges, such as the New York Stock Exchange and NASDAQ.

2. How can I predict the stock market?

It is not possible to accurately predict the stock market. Many factors, such as economic conditions, company performance, and world events, can affect stock prices. While there are tools and strategies that can be used to analyze market trends and make informed investment decisions, there is no guaranteed way to predict the stock market.

3. What is a stock index and how is it related to the stock market?

A stock index is a measurement of the performance of a specific group of stocks. It is often used as a benchmark to track the overall performance of the stock market. Examples of stock indexes include the S&P 500 and the Dow Jones Industrial Average. Changes in stock indexes can reflect the overall health of the stock market.

4. How do I determine which stocks to invest in?

Choosing which stocks to invest in can be a complex decision. It is important to do thorough research on the company's financial health, management team, and industry trends. Additionally, diversifying your portfolio by investing in a variety of stocks can help mitigate risk. It is also recommended to consult with a financial advisor before making any investment decisions.

5. What are some common risks associated with investing in the stock market?

Investing in the stock market comes with a certain level of risk. Some common risks include market volatility, company bankruptcy, and economic downturns. It is important to carefully consider your risk tolerance and diversify your investments to mitigate potential losses. It is also important to regularly monitor your investments and make adjustments as needed.

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