A Crystal Ball That Works (most of the time)
If you have every asked me the question, “What do you think the market will do this year?” you most likely received a smile and the most professional and informative non-answer I could conjure. It’s not that I don’t want to answer, it’s just that I don’t put much faith in my, or anyone’s else’s ability to predict such things. There are certainly times when I think the probability of a certain outcome is high, but even that doesn’t mean my timing would be right. To put a bow on this point, Bloomberg surveys 19 Wall Street strategists at the beginning of each year and asks them this very question. The result for 2018: zero predicted the market would go down. The average prediction was for a gain of 8%. Does that make these people inept? Not at all. It just shows that predicting the future can be more difficult than we would like to believe.