This year’s stock-market correction reminds us once again that forecasting is folly. We have discussed this many times before so suffice it to say that the evidence is in: humans have no ability to say what will occur in the future. I was reminded of this courtesy of an article published one year ago today on the imminent recovery in oil prices. The article in question, headlined “Why Oil Prices Will Rebound Before We Know It,” appeared when oil prices were about $50 a barrel. Crude briefly bounced to $60, before dropping more than 50 percent to about $26, where it trades today. It's not just energy forecasters who make mistakes -- all of Wall Street has an unfortunate tendency to try to divine the future by looking at chicken entrails. (VIEW LINK) (image source: Bloomberg)
Great read. Very, very pleased about the bit on silly, persistent forecasts that may/(may not) come true. Asset managers, economists, and analysts alike do not deserve credit for a prediction that cannot be differentiated from chance. Having said that, I predict that oil reverses by year end.