Challenges of Using Statistics in the Stock Market

“The Signal and the Noise: Why So Many Predictions Fail-But Some Don’t” Nate Silver
Pedigree Book/Penguin Group [September 27 2012]
Paperback, 534 pages
ISBN 978-1-59420-411-1

Silver’s comments about stock market prediction, from these pages:
11, 17, 16, 118, 119, 120, 185, 333, 337, 338, 343, 371, 449, 450.

The signal is the truth. The noise … distracts us from the truth. Widespread failures of prediction … dynamic systems make forecasting more difficult … complex human interactions … behavior of the American economy … It’s hugely difficult to forecast the business cycle … very hard to determine cause and effect from economic statistics alone … the economy is always changing [dynamically] … many forecasters mistake correlation for causation, and noise for signal.