Stock Predictions – The Hindenburg Omen

    Published: 06-16-2009
    Views: 4,642
    Financial Advisor Ric Edelman provides tips on how to avoid bad stock predictions including the Hidenburg omen.

    Ric Edelman: Lots of people make predictions about the stock market but you should ignore all of them, and the more wild the prediction the more likely you are liable to hear about it, and the more absurd it will prove to be.

    One of the most talked-about predictions in the summer of 2010 was The Hindenburg Omen, a mathematician developed it by studying the historical performance of the stock market, his system is a little complicated.

    First, he counts the number of stocks that hit 52-week highs and lows at the same time, then he compares that with the rate of money entering and leaving the market. Then he compares that analysis to conclude something crazy that in June of 2010 the stock market would crash by October.

    Now he said his predictor which he calls The Hindenburg Omen has predicted every stock market crash since 1987.

    Of course, he has also predicted dozens of other crashes that never came to being, yet, he's been wrong three out of four times since 1985, but we won't talk about that. Anyway, he is predicting yet another market crash.

    In June of 2010, he said the market would crash by October, what happened instead? Well, instead of crashing the Dow Jones industrial average grew 3% in October. The only thing that crashed was his prediction.

    Don't listen to pundits, they are full of hot air.