When you hear or read about an investing expert’s outlook for the year ahead, bear one thing in mind: Every forecast about 2022 was wrong.Oh, some strategists will claim victory for saying the stock market SPX, -0.84% would be down in 2022 or that Treasury bonds TMUBMUSD10Y, 3.482% would have yields north of 3%. Or that the yield curve would invert or that inflation would be stickier than anticipated. But they don’t deserve laurels for that.
Say something memorable, and the expert and firm might be held accountable for it; pabulum, however, gets overlooked when it’s wrong. Adds Howard Yaruss, a New York University professor and author of the recent book “Understandable Economics”: “If you are talking about a fine-tuned forecast about stocks and asset values, I don’t see how anyone could go there; accurate predictions aren’t going to happen, or will be luck if they turn out true. Their statements are more about marketing than the market.”
‘Wordsmithing’ “There’s wordsmithing going on; you word them so that you have a noticeably higher than 50% chance of getting them right, and then say a few things you truly believe in that will make you look really smart if they happen without making you look dumb for believing it,” Doll says. Wildest market forecast Which leads to what I think is the best, wildest market forecast of all time, even if it’s more obvious than it appears: Dow DJIA, -0.67% 116,200.
A septuagenarian at the time, Berger wryly suggested that if he was proved wrong, people come find him to discuss it; sadly, he died a few years later.
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