There is something about this time of year that really annoys me. What is that you ask? Well, it is the chronic need for so many market commentators to try to be the next Prechter or Russell (circa early 1980’s), falling all over themselves to make the next big, career-making call. You may know that I like Prechter and am in awe of the guy’s intelligence, but he has been very wrong on many occasions despite that big brain. Russell? Please, I am not going to speak ill of the departed.
Thankfully, here comes Barry Rithholtz (in the MSM no less) at just the right time with just the right article attempting to neutralize this goofy year-end ritual in the financial media, large and small.
I find myself once again compelled to bring up this subject. Blame it on the time of year, when all of the forecasts for 2017 are being rolled out, while the old ones that were so-often wrong are forgotten instead of being reviewed.
He goes on to list some of the
promotions forecasts for 2016 that did not work out so well. This dovetails so well with my own firm belief that you do not forecast the markets, enthralling others with your guru-like acumen; you simply work hard, stay honest, flexible and humble and manage the probabilities; no more, no less.
Novices, casual participants and flat out lazy thinkers believe that certain gurus have a secret sauce. This mass delusion supports a cottage industry of promoters (among the fewer and further between serious analysts and commentators) with the media right in there supporting the delusion with respect to the ‘rock star’ gurus. This stuff sells. Listen to Barry for cryin’ out loud; it’s marketing.
“The bottom line remains: forecasts and predictions are exercises in marketing. Outrageous and wrong forecasts are typically forgotten, and when one randomly happens to come true, the guru is lauded as the next Nostradamus. It is an expensive and fatuous practice, and the finance industry should give it a permanent rest.”
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