A Smart Economist and A Dumb Coin
This woman is an economist.
She’s very well-educated.
She’s comfortable predicting when the next recession will occur.
This is a coin.
It’s very dumb.
Should you rely on the prediction of the economist or the toss of a coin?
The answer seems obvious, but it isn’t.
From 1990-2012, economists correctly forecasted only two of 60 recessions that occurred around the world a year in advance.
Flipping a coin probably would have done better.
No one has the expertise to consistently predict the direction of the market.
Keep this in mind the next time a super-confident pundit makes a prediction.