He channels William Sherden, author of “The Fortune Sellers: The Big Business of Buying and Selling Predictions.” Sherden decided to test the accuracy of leading forecasters over a multidecade period. His conclusion: Forecasters stink.
Farrell summarizes Sherden’s findings in 11 bullet points:
1. Economists’ predictions are no better than guesses
2. Government economists often worse than guesses
3. Long-term accuracy is impossible
4. Turning points cannot be predicted
5. No specific forecasters are better than the rest of pack
6. No forecaster was more expert with specific statistics
7. No one ideological orientation was better
8. Consensus forecasts do not improve accuracy
9. Psychological bias distorts forecasters and their forecasts
10. Increased sophistication does not improve accuracy
11. No improvement over the years
Its worth spending some time reviewing the entire article.
Published on Market watch.com : http://www.marketwatch.com/story/dow-17000-main-street-lambs-led-to-the-slaughter-2013-02-13