Predictive pricing

Patent Granted Statistical models that attempt to predict equity market prices based on historical data. So far, no such model is considered to consistently make correct predictions over the long term. One particularly memorable failure is that of Long Term Capital Management, a fund that hired highly qualified analysts, including a Nobel Prize winner in economics, to develop a sophisticated statistical model that predicted the price spreads between different securities. The models produced impressive profits until a spectacular debacle that caused the then Federal Reserve chairman Alan Greenspan to step in to broker a rescue plan by the wall street broker dealers in order to prevent a meltdown of the bond market.