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My Sunday Washington Post Business Section column is out. This morning, we look at why It’s time to market forecasters to admit the errors of their ways.
It is yet another look at the parade of really bad forecasts we get treated to constantly in the world of investing and finance.
Here’s an excerpt from the column:
“What say we finally put a fork in Prediction, Inc.?
There is a forecasting-industrial complex, and it is a blight on all that is good and true. The symbiotic relationship between the media and Wall Street drives a relentless parade of money-losing tomfoolery: Television and radio have 24 hours a day they must fill, and they do so mostly with empty-headed nonsense. Print has column inches to put out. Online media may be the worst of all, with an infinite maw that needs to be constantly filled with new and often meaningless content.
Just because the beast must be fed does not mean you must be dragon fodder. (More on this later.)”
The entire piece is worth your time to read in full, including some advice on the best way for you the home viewer to deal with this.
Source:
It’s time to market forecasters to admit the errors of their ways
Barry Ritholtz
Washington Post, January 18, 2015
http://wapo.st/1yybs8z
At least some of the predictions are entertaining to read and may even accurately reflect the zeitgeist.
For my money, the orchestrated fraud of the ‘earnings surprise’ industry is far more pernicious. When is the last time you heard an earnings report that did not also include an evaluation that it was a ‘surprise’ or ‘in-line with expectations’?
Yes, I love how the company “failed to make its number”, rather than the tea-leaf readers were dead wrong. I know these analysts have a lot of data, but if they were infallible, why aren’t they handicapping horses or football teams instead of companies?
Mr. Ritholz,
I have always viewed your blog as a voice of dissension from the neo-liberal capitalist orthodoxy, and place where small investors could ganin some insight into how the game is rigged against them. Hence my previous comment that you moderated out. Apparently, like every one else, you hew to the parameters of permissible criticism, and don’t wish to be Saint George. Fair enough. That doesn’t mean you need to shoot the messenger.
Freedom of speech, my ass,
AmboyCharlie
Dear Mr. Ritholz,
A follow uo: From the very same issue of rhw Washington Post.
“For the first time in at least 50 years, a majority of U.S. public school students come from low-income families, according to a new analysis of 2013 federal data, a statistic that has profound implications for the nation.”
A famine lies upon the land because the dragon is hoarding all the gold.
Again,
AmboyCharlie