We are all forecasters. When we think about changing jobs, getting married, buying a home, making an investment, launching a product or retiring, we decide based on how we expect the future will unfold.
Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $1000 and go to Las Vegas.” This is such a profound statement from Paul Samuelson, who was the first American economist to win the Nobel Prize in Economics.
Predicting or forecasting the market is likes rains forecast by the met department.
Whenever there is a big swing in the market the investors start anticipating and the analyst start guessing the bottom points. BREXIT, Referendum, RBI Policy, Inflation, Monsoon, Crude prices, European Crisis, Emerging economies, Indian Rupee , the ECB and the FED being hawkish and dovish.
As I always say Investing is something you had to learn how to do on your own, in your peculiar way, it’s the intuition that drives towards it. If you think you can rely on sources here they are –
- Economists’ predictions are no better than guesses
- Government economists often worse than guesses
- Long-term accuracy is impossible
- Turning points cannot be predicted
- No specific forecasters are better than the rest of pack
- No forecaster was more expert with specific statistics
- No one ideological orientation was better
- Consensus forecasts do not improve accuracy
- Psychological bias distorts forecasters and their forecasts
- Increased sophistication does not improve accuracy
- No improvement over the years
So better stop forecasting the markets and the traditional boarding method of stock picking always works.