“There are 60,000 economists in the US, many of them employed full-time trying to forecast recessions and interest rates, and if they could do it successfully twice in a row, they’d all be millionaires by now. Last time I checked they were all still working.” –Peter Lynch
Archives for January 2009
My only prediction for 2009 is that your prediction is wrong. Yes, that’s right. I predict that your prediction won’t come true.
We love predictions. I can’t figure out why because 99% of the predictions I hear never come to be. About a year ago I was at an event that featured an economic forecast by Brian Wesbury. I like Brian. He’s informative, optimistic about the future, and he’s a great speaker. His speech was loaded with some intriguing economic insight, but the one point I remember more than anything else was his prediction that the Dow would reach 15,000 by the end of 2008. You know the rest of the story.
I left that event with some excitement. Why was I excited? Because I liked Brian’s forecast, and I wanted to believe it was going to happen. Brian is an expert on the economy, and his forecast was exactly what I wanted to happen. The problem: we must learn to EXPECT ANYTHING in spite of what we want to see happen.
I often have people ask me what I think will happen. Their question is usually within the context of a very short time frame (a year or less). I don’t make precise short-term predictions or economic forecasts, because I know I’ll be wrong. Instead, I try to focus on what’s knowable and important. My short term predictions really wouldn’t even matter because our firm has a long-term approach to our investment philosophy.
Apparently I’m not the only one who liked Brian. They have invited him back again this year. I can’t wait to hear his prediciton:)