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About stock markets predictability

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Author(s): Hicham Benjelloun

Journal: Journal of Economics and Behavioral Studies
ISSN 2220-6140

Volume: 2;
Issue: 1;
Start page: 26;
Date: 2011;
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Keywords: Stock | Market | Predictability | Confidence | Investors

ABSTRACT
We argue that the financial markets have a predetermined outcome. They behave deterministically but appear to follow random patterns. Stock prices have nothing to do with future expectations; they are a reflection of previous convictions coming from the confident investors. A financial crisis is the result of the lack of confidence that characterizes a market moments before the crisis. Stocks returns are perfectly correlated to each other and it is possible to obtain high gains consistently. Finally we provide a different way of assessing risk and suggest a method to sense future performances.
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