Dependence on historical data can lead to market misconceptions from "summary" of Irrational Exuberance by Robert J. Shiller
When we study the patterns in the market, we often look to historical data for guidance. This is a natural inclination, as history can provide valuable insights into how the market has behaved in the past. However, it is important to remember that the market is a complex and ever-changing system, and past performance is not always indicative of future results. Relying too heavily on historical data can lead to misconceptions about the market's behavior. This is because historical data only tells us part of the story - it does not account for all the variables and factors that can influence market movements. For example, a market crash may have occurred in the past due to a specific set of circumstances that are unlikely to be repeated in the future. In addition, historical data can be subject to interpretation and manipulation. Different analys...
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