Nobody Knows Nothing

Why Oil Prices Will Rebound Before We Know It,” appeared when oil prices were about $50 a barrel. Crude briefly bounced to $60, before dropping more than 50 percent to about $26, where it trades today.

… It’s not just energy forecasters who make mistakes — all of Wall Street has an unfortunate tendency to try to divine the future by looking at chicken entrails. Consider two recent Bloomberg stories: The first reported that Goldman Sachs had abandoned five of its six top trade recommedations for 2016 just six weeks into the new year. In the same vein Wall Street analysts are reducing their estimates for the Standard & Poor’s 500 Index, again just a few weeks into the new year. My colleague Josh Brown calls this phenomenon “Nobody Knows Nothing, Episode 653.” __ Wrong-Way Forecasts

Is there any other kind of forecast than the wrong-way kind? Not really. Not if you step back and take a broad enough perspective.

So let’s consider the Employment Situation report from the Bureau of Labor Statistics, which each month is accompanied by hundreds of forecasts from Wall Street economists and thousands more via Twitter. Almost all those predictions are wrong. __ BV

Nobody Knows Nothing Socrates B da Man

Nobody Knows Nothing
Socrates B da Man

Nobody Knows Nothing

It is true for investments, it is true for climate, it is true for geopolitics. Nobody knows nothing, and if You don’t understand that by now, you’re “a clown in the zoo!” Or a monkey in a tree.

If you’re still investing based on Wall Street’s forecasts, you’re like a clown in the zoo… Anyone’s guess is as good as anyone else’s in a world of almost infinite variability.
__ Joshua M. Brown

If you are lucky enough to find a forecaster who is honest, well-informed, intelligent, not corrupt, and humble, it may be worth your while to listen to him for a short time. But such forecasters are rare, and unlikely to be placed in prominent positions of government, academia, media, or other cultural institutions.

Everything You Think You Know, Just Ain’t So

There are good genetic and neurocognitive reasons why the crude aphorism above captures the reality of the interior mental landscape of virtually every human. More.

Daniel Kahneman’s Classic 1973 paper in Psychological Review “On the Psychology of Prediction” (PDF)

You cannot learn anything new if you remain stuck in your old, second-hand, castoff belief systems — inherited from parents, professors, priests, intellectuals, and others who are in no position to live your life for you. Changing and rearranging one’s mind is very hard work, but the rewards can be spectacular.

The brain begins to fossilize between the ages of 25 and 35. If one does not take active measures to seek out and destroy the cobwebs that constantly form within the most cherished parts of our notional belief systems, our minds grow older, more brittle, less flexible, and less likely to see most of the things that are right in front of our noses. Take care not to let that happen to your own brain. 😉

The battle against foolish predictions, or paying them much mind, requires continuous diligence. I plan on reminding you of that until the foolish forecasting stops. I predict that won’t be for a long, long time. __ BV

Another blogger who picked up on this story

Update on oil prices:

Oil prices settled at their lowest levels since 2003 as growing stockpiles in the U.S. and continuing worries about falls in the wider financial markets keep oil in the red.

Light, sweet crude for March delivery settled down $1.24, or 4.5%, to $26.21 a barrel on the New York Mercantile Exchange, the lowest settlement since May 2003.

Brent, the global benchmark, declined 2.5% to $30.06.


Failed tech predictions infographic:

Courtesy of: Visual Capitalist
This entry was posted in Everything You Think You Know Just Ain't So, Folly of Prediction, Groupthink, Human Brain, Knowledge and tagged , . Bookmark the permalink.

1 Response to Nobody Knows Nothing

  1. guest says:

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