Sticky Stock Market Analysts

Technological progress in recent years has made new methods available for making forecasts a variety of areas. We examine the success ex-ante stock market three major indices, i.e., German Stock Market Index (DAX), Dow Jones Industrial (DJI), and Euro Stoxx 50 (SX5E). test whether prove true when they reach their effective dates are therefore suitable active investment strategies. revive thoughts American sociologist William Fielding Ogburn, who argues that forecasters consistently underestimate variability future. In addition, we draw on some contemporary measures forecast quality (prediction-realization diagram, unbiasedness, Diebold–Mariano test). reveal (a) unusual events underrepresented forecasts, (b) dispersion lags behind actual events, (c) slope regression lines prediction-realization diagram is <1, (d) highly biased, (e) not significantly better than naïve forecasts. The overall behavior can be described as “sticky” because adhere too strongly to long-term trends indices thus characterized by conservatism.