Uncertainty is always a macroeconomic problem

 

" economic forecast are better than nothing, but their origin lies in extrapolation from a partially known past through an unknown present to an unknown future.."

- Denis Healey UK Chancellor of the Exchequer  1974-9 

I recently gave a talk on uncertainty or more specifically - VUCA - Volatility, Uncertainty, Complexity, and Ambiguity, and the above quote would have been a great way to describe the problem. We face more than just volatility. We really don't know the past of the where the economic has been. We don't always know where we are currently at in the business cycle, and our job is the describe an unknown future. 

The first challenge of macro investing is knowing where you are at before you make a judgment about where you are going. We have internal uncertainty based on our ignorance of the present which then must be blended with the external uncertainty of the future that may not be known because the underlying driver and relationships may change.