FORECASTS

"Those who have knowledge don't predict. Those who predict don't have knowledge." Lao Tzu

“It's tough to make predictions, especially about the future.” Yogi Berra

“The idea that the future is unpredictable is undermined everyday by the ease with which the past is explained.” Daniel Kahneman

“Forecasts create the mirage that the future is knowable.” Peter Bernstein

"I have never specialised in economic forecasting or market forecasting either. My own business has largely been based on the principle that if you can make your results independent of any views as to the future you are that much better off." Benjamin Graham 1955

"We've long felt that the only value of stock forecasters is to make fortune tellers look good." Warren Buffett

“I don’t let people do projections for me because I don’t like throwing up on the desk.” Charlie Munger

“Read last year's market predictions and you'll never again take this year's predictions seriously.” Morgan Housel

“I have never professed to have a crystal ball that forecasts market direction.” Daniel Loeb

“There’s nobody’s predictions that we’re interested in, including our own.” Warren Buffett

"It is absurd to think that the general public can ever make money out of market forecasts." Benjamin Graham

“Forecasts aren’t worth very much, and most people who make them don’t make money in markets.” Ray Dalio

"Most forecasts don’t allow for alternative outcomes." Howard Marks

"In forecasting, hindsight bias is the cardinal sin." Philip Tetlock

“The differences between forecasts are trivial relative to the difference between all forecasts and what happens.” John Kay

"We have two kinds of forecasters, those who don't know and those who don't know they don't know." John Kenneth Galbraith

"I continue to believe that short-term market forecasts are poison and should be kept locked up in a safe place, away from children and also from grown-ups who behave in the market like children." Warren Buffett

"If you choose to delude yourself by accepting extreme predictions, however, you will do well to remain aware of your self-indulgence." Daniel Kahneman

“People have always had this craving to have someone tell them the future. Long ago, kings would hire people to read sheep guts. There’s always been a market for people who pretend to know the future. Listening to today’s forecasters is just as crazy as when the king hired the guy to look at the sheep guts. It happens over and over and over.” Charlie Munger

“My financial success stands in stark contrast with my ability to forecast events.” George Soros

"I don't always have a notion of where the market's headed, but usually I do. I've found that sometimes I'm right and sometimes I'm wrong. All in all, my calls are useless." Ralph Wanger

"We were not skilled at predicting the path of the market." John Neff

“When it comes to macro events, you can either predict or react. I’ve proven time and again that my crystal ball is horrible, so my focus has to be on reacting to extremes in individual securities by selling at high valuations and buying at low valuations.” Bruce Berkowitz

“I’ve never been able to predict accurately. I don’t make money predicting accurately. We just tend to get into good businesses and stay there.” Charlie Munger

“There’s a saying in the markets that ‘he who lives by the crystal ball is destined to eat ground glass.’” Ray Dalio

"I have resigned from the professional undertaking of coin-flipping. I am a student of uncertainty. I have no idea where the stock market is going to be. So when I am creating trades for my portfolio and my clients I am agnostic. I just want to enhance the probability that I make money come what may." Hugh Hendry

“No one has privileged access to the future and market forecasts tend to be about as accurate as calling a coin toss.” Bill Miller

“If I were to judge any of the best money managers, including myself, simply on the quality of their long term predictions, including myself, both micro and macro, the rating would be average at best.” Michael Steinhardt

“Are you a consumer of forecasts? Are there forecasters and economists on staff where you work? Or do you subscribe to their publications and invite them in for briefings, as was the case with my previous employers? If so, do you know how often each has been right? Have you found a way to rigorously determine which ones to rely on and which to ignore? Is there a way to quantify their contributions to your investment returns? I ask because I’ve never seen or heard of any research along these lines. The world seems incredibly short on information regarding the value added by macro forecasts, especially given the large number of people involved in this pursuit.” Howard Marks

“We are not fond of making economic or market predictions as our track record of doing so is unenviable.” Chuck Akre

"My own investment philosophy has developed around the theory that prophecy reveals far more about the frailties of the prophet than it reveals of the future." Warren Buffett

"We don't believe anyone can accurately predict where interest rates are going, where GDP growth is going to be, what the Federal Reserve will do. The old saying 'if you going to make predictions, make a lot of them, because you're bound to get one right'. But the truth of the matter is, its very, very rare that people get predictions right." Paul Black

"I'd advise you to approach the entire subject of forecasts and forecasters with extreme mistrust." Howard Marks

"After almost three decades of investing in the stock market, I am convinced that the biggest mistake investors make is the propensity to want to predict financial markets." Francois Rochon

"Trying to predict the direction of the market over one year, or even two years is impossible." Peter Lynch

“The only function of economic forecasting is to make astrology look respectable.” John Kenneth Galbraith

“I can’t predict markets, and neither can you. No, seriously, you can’t. No. You can’t.” Jon Boorman

“I really have no ability to forecast gold prices. I have been in the business for 30 years, and it occupies my mind day and night.” Peter Munk [Chairman of Barrick Gold]

"Amazingly investors often rely on interest rate forecasts and stock market predictions despite overwhelming evidence that these have little or no value in predicting stock price moves." Chris Davis

“We ignore outlooks and forecasts… we’re lousy at it and we admit it… everyone else is lousy too, but most people won’t admit it.” Marty Whitman

"Every year I talk to the executives of a thousand companies, and I can’t avoid hearing from the various gold bugs, interest rate disciples, Federal Reserve watchers, and fiscal mystics quoted in the newspapers. Thousands of experts study overbought indicators, oversold indicators, head and shoulder patters, put-call ratios, the Fed’s policy on money supply, foreign investment, movement of all the constellations through the heavens, and the moss on the oak trees and they can’t predict markets with any useful consistency any more than the gizzard squeezers could tell the Roman emperors when the Huns would attack." Peter Lynch

“We are rather poor at making predictions, especially about the future. But that doesn’t put us off. We suffer from what Nassim Taleb calls ‘epistemic arrogance’ - in plain English, we think we are better at making predictions than we really are. The result is that we have a misplaced sense of confidence in our forecasts. Investors like modelling because it appears scientific (the more spreadsheet tabs, the greater the effect).” Marathon Asset Management

"When one is investing, one is dealing with the future. None of us - regardless of intellect have actually been to the future, so we don't know what we are talking about." Hugh Hendry

"I have no use whatsoever for projections or forecasts. They create an illusion of apparent precision. The more meticulous they are, the more concerned you should be. We never look at projections, but we care very much about, and look very deeply at, track records. If a company has a lousy track record, but a very bright future, we will miss the opportunity..." Warren Buffett

 "[Projections] are put together by people who have an interest in a particular outcome, have a subconscious bias, and its apparent precision makes it fallacious. They remind me of Mark Twain's saying, 'A mine is a hole in the ground owned by a liar.' Projections in America are often a lie, although not an intentional one, but the worst kind because the forecaster often believes them himself." Charlie Munger

"In both economic forecasting and investment management, it’s worth noting that there’s usually someone who gets it exactly right… but it’s rarely the same person twice." Howard Marks

"Making investment decisions based on market forecasts and predictions is a fool’s game." Chris Davis

“The biggest lesson I learned was that it is very difficult to predict future market trends." John Paulsen

"We don't do a lot of forecasting per se about where markets are going. I have been burned enough trying." Peter Cundill

“Pundits forecast not because they know, but because they are asked.” John Kenneth Galbraith

"The first clue that should make you suspect that it's not going to be all that easy to foretell the market's future is that all the prognosticators start with the same material but end up with wildly different scenarios." Ralph Wanger

"I am not in the business of predicting general stock market or business fluctuations. If you think I can do this, or think it is essential to an investment program, you should not be in the partnership." Warren Buffett 1966

"I don't believe in predicting markets. I believe in buying great companies - especially companies that are undervalued, and/or under appreciated." Peter Lynch

"I have often argued that precise forecasting is a futile exercise anyway; Not only are the predictions overwhelmingly incorrect, but what really matters is how much you stand to gain if you are right and how much you stand to lose if you are wrong." Francois Sicart

"It all boils down to the following; figuring out if our miscalculations or misforecasts are on balance more harmful than they are beneficial, and how accelerating the damage is." Nassim Nicholas Taleb

"Accepting that we cannot predict the future - ie there will always be unexpected and highly consequential events - is the first step to becoming less fragile and more adaptable. People should be highly skeptical of anyone's, including their own, ability to predict the future and instead pursue strategies that can survive whatever may occur." Seth Klarman

"We are decidedly agnostic when it comes to acting on the majority of forecasts for the economy - in part because prognosticators are, at least in the short term not paid according to the accuracy of their pronouncements. If they were, there would be no economists." Frank Martin

"Old forecasts are like old news - soon forgotten - and pundits are almost never asked to reconcile what they said with what actually happened." Philip Tetlock

"One of my greatest complaints about forecasters is that they seem to ignore their own records. The amazing thing to me is that these people will go on making predictions with a straight face, and the media will continue to carry them." Howard Marks

“What is surprising is that even the most sophisticated investors, traders and commentators continue to rely on predictions issued by those who have no record of success at such forecasts.” Paul Singer

"Why do we fall for such tricks and listen to market forecasters who are no better than astrologers. Because the human mind is a pattern seeking mind. We are all descended from people who are good pattern finders." Ralph Wanger

“We always read ‘I think the stock market's going to go up.’ We never read ‘I think the stock market’s going up, (and 8 out of my last 30 predictions were right)’ or ‘I think the stock market's going to go up (and by the way I said the same thing last year and was wrong).’ Can you imagine deciding which baseball players to hire without knowing their batting averages? When did you ever see a market forecaster's track record?” Howard Marks

“All prediction is inherently uncertain, and we have a duty to tell people about the uncertainties of our predictions and our past error rates.” Peter Bevelin

“All over the world, year after year, economic prognosticators of all nationalities make their economic contributions to what can only be called a concert of prediction failure. In 1993, the OECD analysed forecasts made between 1987 and 1992 by the governments of the US, Japan, Germany, France, Italy, Canada as well as by the IMF and the OECD itself. Not only were each of these organization’s predictions abysmally inaccurate, but they would have made better predictions for inflation and GDP if they had scrapped their “sophisticated” economic models and simply guessed that the numbers in each year would be unchanged from the last.” Mark Buchanan [Ubiquity - Why Catastrophes Happen]

"I don't bother to read most economists (particularly those who insist on being called Dr. Sam or Dr. Eric) and strategists because they tell you only about what has happened, not what will happen. They don't forecast, they just extrapolate recent events into the future. They are mostly followers, who revise their forecasts of the future based on the direction of the latest economic numbers or what markets have done recently." Barton Biggs

“Wall Street strategists have understood something for a long time: the key to predictions is to make them often. As you might have guessed, a strong marketing team is then in charge of flying balloons for those predictions that have proven to come true. We take the opposite approach at Giverny Capital by rarely making predictions and evaluating our prediction regardless of their outcome.” Francois Rochon

"If I tried to predict the short-term prices of almost any other commodity, or any currency, or any market, I likely would be wrong about as often as I would be right." Ed Wachenheim

“Neither do I believe we can forecast market prices of major currencies. We also don’t believe we can hire anyone with this ability.” Warren Buffett

"Trying to predict market quotations – for a stock, a sector or the whole market – is futile. It is astounding to see how many investment “professionals” continue to waste their time and talent on an activity that has so many times proved its uselessness. And what is most surprising is that many investors still continue to read almost religiously market forecasts. In Greek mythology, Cassandra was condemned by Apollo to know the future but to be disbelieved when she foretold it. Hence the agony of foreknowledge combined with the impotence to do anything about it. Wall Street gurus are in the reverse situation: They don’t know the future but they are often blindly believed when they foretell it." Francois Rochon

“I don’t know how to predict the stock market, I don’t know how to predict interest rates, I don’t know how to predict business. All I know is if I buy the right kind of business at the right price with the right people I’ll do well over time. In stocks it’s very hard to know when something will happen and it’s very easy to know what will happen.” Warren Buffett

"One would expect a successful method to yield firm predictions; but all my forecasts are extremely tentative and subject to constant revision in the light of market developments. Occasionally I develop some conviction and, when I do, the payoff can be substantial; but even then there is an ever present danger that the course of events fails to correspond to my expectations." George Soros

"Obviously you don't have to be able to predict the stock market to make money in stocks, or else I wouldn't have made any money. I've sat right here at my Quotron through some of the most terrible drops, and I couldn't have figured them out beforehand if my life had depended on it." Peter Lynch

"I think the financial community devotes far too much time and mental resources to its constant efforts to predict the economic future and consequent stock market behaviour using a disparate, and almost certainly incomplete, set of statistical variables. It makes me wonder what might be accomplished if all this time, energy and money were to be applied to endeavours with a better chance of proving reliable and practically useful." Peter Cundill

"When forecasters have too much information, they often become even more inaccurate than when there is too little. Research on horse handicappers and other studies indicate that only early information affects one's decisions. Once the decision is made, additional information, even when contradictory, will not cause the person to change his mind." Bennett Goodspeed

"Market forecasters will fill your ear but will never fill your wallet." Warren Buffett

"Paying someone to make directional stock market or economic predictions automatically reduces portfolio results." Bill Smead

"Charlie and I, I think it’s fair to say, we’ve never looked at a projection in connection with either a security we’ve bought or a business we’ve bought. We’ve had them offered to us in great quantities." Warren Buffett