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Legendary Investors Know Their Limitations – Why Not Others?
“My financial success stands in stark contrast with my ability to forecast events…..With regard to events in the real world, my record is downright dismal. The outstanding feature of my predictions is that I keep on expecting developments that do not materialise”
Quote by: George Soros
Quote made on: 2003
Quote Submitted by: Colin McKnight
Source: "The Long and The Short Of It" (Professor John Kay)
Editor's Notes
Soros is not alone in his humility. John Maynard Keynes also observed that the only justified answer to many questions about the future is “We simply do not know” – but nobody is rewarded for saying that. As John Kay has said, many people in the financial services sector profess knowledge of the future they do not have, and cannot have.
“For economic forecasters, as for other financial pundits, it is better to be conventionally wrong than unconventionally right.”
So, if real experts can recognise their own potential fallibility, why are there still so many (less justified) experts who cannot see past their own self importance? Worse still, why are there so many investors willing to believe their pronouncements? Beats me.
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Loading ...Published on: April 23, 2012
The Futility of Forecasts – More Views from Economics Experts
(Colin McLean – 05.12.2011 “Financial News”) – Annual forecasts tend to be backed up by firm convictions and strong evidence, covering indices, commodities, currencies and interest rates, amongst others, but they are not likely to be any better than “a wet finger being stuck in the wind.” Economic forecasts largely predict the status quo, with most predictions sticking to the comfort zone of +10%.
(Tim Harford) – Suggested (24.12.2011) that professional pundits are not usually paid for correct forecasts. What they are required to do is to sound convincing, whether they are columnists or asset management figureheads. On the whole, professional forecasters will huddle together for protection and the eventual outcome is generally well away from the cosy consensus.
Quote by: Colin McLean (M.D. of SVM Asset Management) and Tim Harford (Financial Times)
Quote made on: 02/04/2012
Quote Submitted by: Alan Chatham
Source: Sage and Hermes "Investment Management Review"
Editor's Notes
Couldn`t have said it better! These views were echoed by the eminent Professor John Kay in his interview on “Jeff Randall” this week. The future is always different and can seldom be extrapolated from the present.
(1 votes, average: 1.00 out of 10)
Loading ...Published on: April 19, 2012
A Very Wise Man
“The Only Function of Financial Forecasting Is To Make Astrology Look Respectable”
Quote by: Professor Ezra Solomon (Professor of Economics at Stanford University)
Quote made on: 1985
Quote Submitted by: Nicholas Sellars
Source: Stanford University
Editor's Notes
Quod erat demonstrandum
(1 votes, average: 9.00 out of 10)
Loading ...Published on: April 6, 2012
