A great graphic made it’s way around the internet via the Wall Street Journal. The graphic shows the predictions from 50 economists on the direction of interest rates. How did they do?
NOT A SINGLE ECONOMIST WAS EVEN IN THE BALLPARK!
Every single day, pundits go on TV saying what they believe will happen with complete confidence that their prediction is going to be correct. Apparently, accuracy is hard to come by, guesses are not.
I honestly understand why these forecasters are still trying - because if they’re right, they can cash in big time like they’re Nostradamus. If they’re wrong, it’s yesterday’s news. Even on the off chance they are asked about it, they’ll have a litany of smart-sounding reasons why things didn’t turn out according to their prediction. In short, they had no idea things would turn out the way they did. So, I understand why they keep trying - there is no professional cost to do so.
The question I have is, why does anyone still listen to them? Even more so, why does anyone assign any weight whatsoever to what they have to say?? Even more so still, why does anyone make changes to their plan based on what any yahoo has to say about the future???
I’ve written about this before: Should You Ignore Financial TV?
There is a nerdy financial joke that seems appropriate:
Q: Why did God create economists?
A: To make weather forecasters look good.
Thanks for reading!
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