took it on the chin, losing a third or more of their market value last year and the tech-heavy Nasdaq 100 Index dropped more than 32 per cent, erasing about US$5.6-trillion in wealth.
Since antiquity, humans have sought out oracles who could foretell the future through various methods of divination. In ancient times, that included reading shapes in the sand, interpreting reflections in the water, and decoding grains of corn. In modern times, we have data sets, not tea leaves. Nevertheless, the rates of success among our contemporary oracles – also known as economists and market watchers – are consistently unimpressive.
One explanation is that pundits who make big, bold statements pull focus. They’re the ones in the media spotlight who grab the viewers’ attention. A year later, no one remembers what was said and whether it was accurate. No apologies are made. This behavioural bias to accept frequently heard opinions as fact is called illusory of control. The constant barrage of opinionators, prognosticators, and pundits is a form of information overload, or some might say information pollution. We’re busy people. We get tired. When we’re relentlessly exposed to too much information, we just can’t cope. So, we reach for shortcuts to help us get through the day.