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If you are going to forecast, forecast often

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If you are going to forecast, forecast often

My very good friend Graham Hand at Cuffelinks recently published a chart by Jon Boorman from Broadsword Capital (a US-based hedge fund) who “has been tracking the comments made by famous bears…”

The chart demonstrates that 6th Century BC Chinese Poet, Lao Tzu, was on the money when he said; “Those who have knowledge, don’t predict. Those who predict, don’t have knowledge.”

Much later, the American humorist, Evan Esar, observed; “An economist is an expert who will know tomorrow why the things he predicted yesterday didn’t happen today.”

Winston Churchill might have heard of Esar’s work, and once wryly observed himself; “I always avoid prophesying beforehand because it is much better to prophesy after the event has already taken place.”

But the forecaster’s life is perhaps best eulogised by Edgar R. Fiedler in his 1977 book, The Three Rs of Economic Forecasting-Irrational, Irrelevant and Irreverent; “He who lives by the crystal ball soon learns to eat ground glass.”


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Roger is the Founder and Chief Investment Officer of Montgomery Investment Management. Roger brings more than two decades of investment and financial market experience, knowledge and relationships to bear in his role as Chief Investment Officer. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.

This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.

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  1. Those who predict dont have knowledge. We need to add a qualification to this. It should go

    Those who make predictions dont have knowledge or do have knowledge but work for large financial institutions from which the public expect learned sounding one sentence forecasts

  2. Most of these investors have kept investing despite their bullish comments. reminds me of a comment I heard on Bloomberg one night “we have never had so many fully invested bears! Carl Icahn has had enrormous success during this period despite his negative predictions.

  3. I’m waiting for Marc Faber to say something bullish, then I know it’s time to sell everything!

      • Here’s a forecast for you, I bet Marc Faber will still be many times more wealthy than both of you on his death bed, he has obviously been right more times than he has been wrong, investing is all about predicting the future as you have done many times on this site Roger, and been correct with most of them. I find listening to insights from these big hitters fascinating.

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