Skill Building Exercise: Identify Predictable and Unpredictable Events
Identify the 2 largest upward and downward moves for a stock in your sector over the past 1-2 years and identify if the knowledge needed to forecast the moves was:
- Epistemic (may be unknown but can be knowable with enough resources, such as customer demand for a new product); or
- Aleatory (unknowable regardless of resources, such as the timing of when an executive will leave a company)