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:)