ABSTRACT

From 2003 to 2009, the Chicago Sun-Times published an annual stock market forecast from ‘investment expert’ Adam Monk, a capuchin monkey. In 2003, Adam Monk’s picks returned a profit of 37 per cent, in 2004, 36 per cent, in 2005, 3 per cent and in 2006, 36 per cent again (Financial Times 2009). The monkey’s impressive performance not only kept up with the stock market’s overall development, but also beat the forecasts of many well-known human analysts. In 2006 Adam Monk was unsuccessfully challenged by Jim Cramer, a ‘star analyst’ of the television network CNBC. In 2008 Adam Monk beat him again (a performance tracked by the Free by 50 Financial Blog 2009). Adam Monk became an infamous example of the risk and uncertainty attached to stock market forecasting and contributed to the re-popularising of the idea that stock prices develop randomly and cannot be predicted. In the debate between critics and defenders of stock market forecasting, however, one question has rarely been asked: Is it possible that stock market forecasting has a productive role in finance even if future stock prices are not predictable?