The late John Kenneth Galbraith famously said: “The only function of economic forecasting is to make astrology look respectable.”
Assuming he would not object to including financial forecasting and with a hat tip to The Motley Fool, I have culled the following gems from the latter’s list of 122 Things Everyone Should Know About Investing And The Economy.
Confidence in a forecast rises with the amount of information that goes into it. But the accuracy of the forecast stays the same.
Timing the market is a fool’s game, whereas time in the market is your greatest natural advantage.
Several studies have shown that people prefer a pundit who is confident to one who is accurate. Pundits are happy to oblige.
Investors want to believe in someone. Forecasters want to earn a living. One of those groups is going to be disappointed.
You are under no obligation to read or watch financial news. If you do, you are under no obligation to take any of it seriously.
The more someone is on TV, the less likely his or her predictions are to come true.
We’re all just guessing, but some of us have fancier math.
Finance would be better if taught by psychology and history departments.
It’s common to confuse the rearview mirror for the windshield.
A lie can travel halfway around the world while truth is putting on its shoes.
The Congressional Budget Office’s 2003 prediction of federal debt in 2013 was off by $10 trillion. Forecasting is hard. But we still line up for it.