The forecasts that are potentially valuable are those that correctly foresee deviation from long-term trends and recent levels. If a forecaster makes a non-conforming, non-extrapolation prediction that turns out to be correct, the outcome is likely to come as a surprise to the other market participants. When they scramble to adjust their holdings to reflect it, the result is likely to be gains for the few who correctly foresaw it. There’s only one catch: since major deviations from trend (a) occur infrequently and (b) are hard to correctly predict, most unconventional, non-extrapolation
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