Two types of forecasters - both are not very good

 

“There are two kinds of forecasters: those who don’t know, and those who don’t know they don’t know.”

― John Kenneth Galbraith

Accept that forecasting is hard, and most will get it wrong. We can explain only a small portion of the change in returns.  We get the large macro forecasts wrong.We often miss the big picture, yet our livelihood is based on our ability to have some view of the future. It can be simple as saying the returns and the economy will trend, or that using past information can help us say something about future. The question is whether we can form some likelihood about what will happen in the future. The is no certainty and we often cannot even get probability right, yet it is critical that we form some analysis about the future. Just don't put a lot of stock in the forecasts of the professionals.