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.