316 ECONOMETRICA have been if loaned at 5 per cent interest The result of applying his forecasts to the railroad averages deserves attention in view of the fact that this group displayed an almost horizontal secular trend for the 26 years under consideration. His average annual gain of 5.7 per cent in this group would have been approximately equalled, in the case of continuous outright investment, by the dividend income STOCK MARKET FORECASTS OF TWENTY-FOUR FINANCIAL PUBLICATION For the analysis of other results secured in forecasting the course of he stock market, we selected during the period from January 1, 1928, to June 1, 1932, 24 publications(among which were 18 professional financial services, 4 financial weeklies, one bank letter, and one invest ment house letter). More than 3, 300 forecasts were tabulated. The method used has been for each reader to ask himself the question, "In the light of what this particular bulletin says, would one be led to buy stocks with all the funds at his disposal, or place a portion only of his funds in stocks, or withdraw entirely from the market? "The reader graded the advice in each instance by means of one of nine possible entries, namely 100 per cent of funds in the market, 873, 75, 621, 50 373, 25, 122, or 0 per cent. The great majority of forecasters confine themselves to general discussions of the investment situation, leaving to the reader the decision as to what proportion of his funds he shall place in the market. The tabulation, therefore, cannot be mathemati- cally conclusive. Our method, in general, has been to have the vote of three readers of competent intelligence determine the interpretation of each forecast. Marginal commitments have not been incorporated in our tabulations because in no case have they been advised by any of the forecasters. Similarly, short commitments are not in general as- sumed because of the entire 24 forecasters, only one recommended them. His record has been computed on a special bas The tabulated forecasts have been tested in the light of the actual fluctuations of the stock market as reflected by the Standard Statistics Company index of 90 representative stocks. If a forecast is 100 per cent bullish and the market rises 10 per cent in the subsequent week, the forecaster is scored as +10 per cent. If the forecaster, after weighing the favorable and unfavorable factors, leaves the decision hanging in the balance, the score is +5 per cent or one-half of the market advance This is on the assumption that the investor being in doubt as to the future course of the market and being, by definition, committed to common stocks as a possible investment medium, would be led to dopt a hedged position with half of his funds in stocks and half in eserve. If the forecast is 100 per cent bearish, the score is zero, regard