Good Question D.A.C. Why should the past have the slightest predictive power for the future? from https://www.elitetrader.com/et/thre...enarios-for-back-testing.358699/#post-5385576
They don't. Only probabilities. Probabilities is all you need to win. Due to probabilities, one needs as a trader to accept heat.
Which brings us to crypto. Crypto has short term probabilities only. Hodlers may get more than heat, depending on when they bought.
Why, indeed, if you've drunk a cup of coffee every morning for the past 5 years, should anyone think it's likely you might drink one tomorrow morning?
The sun will rise, gravity will still be here and the markets will churn, people will want easy money and fools and their money are easily parted. The world has a lot predictability. It is those who can't see or work with it, claim it is not there. Remember "spontaneous generation"?
Factor based investing seems to have some predictive power. Size factor where smaller market cap stocks tend to outperform, also momentum, i.e. stocks that have appreciated most over the last 12 months tend to higher returns over their cohort that has risen the least, so on for other factors (cf. Fama French 5 factor model etc.). Of course, harnessing this outperformance isn't considered "alpha" anymore since academics have reduced it to a formula but it has been predictive. As to the why, who knows. It's a statistical phenomenon like IQ or social outcome across populations. Root cause indeterminate, obviously just as debatable, yet still it shows in the numbers.
Just google "Investment Mania" and one of the hits.... Asset Bubbles Through History: The 5 Biggest (investopedia.com) It's difficult to predict the future and no business model or business will last forever. So, all hot stuffs will not last. For what it's worth, it's the moment of NOW.
Humans are creatures of habits, even our thought process seeks repetition to minimize efforts. Probabilistic predictions are often quite accurate within proper parameters.
Because human emotions today might be just slightly (or more) similar to the way they were in the past? Seriously, who is letting these new guys in here with this dumb shit? Go short some GME, wait for a month.... THEN we can talk...