An Abundance of Failed Predictions.
On the Fallibility of Expert Predictions. But I keep sticking to good stocks.
In some just past articles I wrote some on how dire the developed West is in -and their problems and now shortcomings. (I just came back from the EuroMoney 5th annual conference, rather Asian and Thai bullish. Hope to soon update you all separately on that.)
I just must tell you how scary it is on how certain some of these TV and book gurus are with these daily dire predictions -on the dollar dropping, the West falling and Gold soaring. Similar as Jim Rogers and Marc Faber & Co., whom unlike me, seems to know it all and willing so to boast-out on commodities, gold and metals etc.. Yet, in the meantime, stocks have done so very well in 2010 for us, even while stalling a bit so far this year.
The world is fundamentally unpredictable and its incredible how in our lives and before so many experts gotten it wrong. Again and again, the examples are miles long of recent and of past.
Maybe some of you remember how Morgan Stanley's Barton Biggs in the late 1980's wrote how “AIDS would ravage Thailand”, he was utterly off/wrong. He got paid millions of US$ a year for such predictions. While others were good, that one was a total flop. Glad I did not listen to him, when I came here way back then.
Some may remember how in the late 1960’s, a top expert was predicting the end of food -and a great famine to come, yet that was more then utterly wrong. (Paul Ehrlich's "The Population Bomb", it got so much attention then for years, yet was soo incredibly wrong, its embarrassing). Jim Rogers, deja vu all over again? As many of his predictions will also likely be so wrong, that is my prediction.
Or how about that guru/dude Ravi Batra's , whom wrote some 20 years ago, "The great depression of 1990's", which sold millions of copies and was at the top of the NY Times best sellers list, for soo many months. Wow, as he could not have been more wrong, as the 1990' was mostly a golden period for the US that is, in many of our adult life times. Likely it was the last golden period. So here I make my own prediction -at my own peril.
Or how about that Y2K, absolutely wrong.. there are hundreds of more examples.
And its been proven since that the higher-up the experts, the more wrong they were on average, well actually almost always. Especially so, the more they were convinced of it -and wrote so in no uncertain ways. One such historian called in the late 1980s, “The end of History”…and on the Iraqi War start, they called it "a slam dunk victory" (Head of the CIA), with some others back then claiming “George Bush” would be named the Iraqi Airport or a major road there in no time.
If you have time, just take a look at a new book called "Future Babble", as it will blow you away. The experts are almost always wrong.
Also, as he this book proves, the bigger the media profile of an expert the less accurate the predictions are, this has been totally documented. And there are plenty of high profile guys which for long have been predicting the end of the world as we know it -and so advocate Gold etc..far more/many so then any optimists of the future. Again, this has so been documented by a very large and long study over many years, done by Professor Philip Tetlock, of UCLA, if you dare look him up -and be in awe.
"The future will forever be shrouded in darkness...." Over and over in the history of predictions its not one expert who tried and fails to predict the future. Its whole legions of experts! The more convinced they are, most often the more wrong they are in time.
A few of you maybe remember Anaconda (no, not the snake) which was once one of the largest company in the world, thanks to its dominance and abundance of copper metal. Which 50 years ago was highly used for telephone wires and so belived likely in the future to soar in ever more usage. "The company will be going strong 100 or even 500 years from now" boasted its president in 1968. Not long after the price of copper plummeted (when fiber optics came), facing liquidation, the company was sold for little in 1977; a great story for all those metal bulls. :) Anyway, there are so many of those stories out there that its scary...
In Dante Alighiers's version of hell, fortune tellers and diviners are there condemned to spend eternity with their heads twisted backwards unable to so see ahead, as they tried to do in life. This seems a bit tough as we all must make predictions -but lets not go crazy and be smart about it in that we just dont' know most all the time.
I like to be alert to mega trends and if I am lucky, can call some. But its luck more often then insights. What I stick to most and want to be known, is to make guarded stock calls on a model portfolio of Thai shares, which then outperform the SET. I hope/plan to be able to continue on that strict prodigy. Only time will tell if I can keep delievering on hat. You the founding members be the judge and the witness, same as you have been in the past.
Best Regards from rainy Phuket,
Paul A. Renaud.
