Do They Know Something That We Don’t?

I came across an interesting article that goes like this:

“Everything Wall Street got wrong in 2023¹”

 

It described that, among other things, at the end of 2022, high profile analysts from big investment banks and fund houses gave a gloomy outlook for 2023, especially on the equities front.

 

However, some things turned out quite the opposite. We knew what happened throughout 2023.

 

The game of prediction is very, very hard. Unless one has a time machine, no one knows what events will happen exactly when, where and how.

 

Yet, as investors, we are still fascinated by “predictions” (read: opinions) given by economists, analysts, strategists, fund managers, etc. After all, it is their job to provide these views and advice. We have little to no reason to doubt them, since they were armed with qualifications, skills, experience and sometimes track records to show. And the opinions provided gave us the impression that they know something that we normal retail investors do not.

 

Still, I am not dissing them nor their opinions, for they can provide learning points which we could take away from, which is why I still enjoy watching pundits expressing their views on business news channels (and looking important as a big-shot investor with prices scrolling across my TV screen). Their perspectives are justified because they support them with statistics, data and information that were not readily available to and/or easily interpreted by retail investors. You can say they have the know-how to digest and using them as informed forecasts, but this is where the difference between them and us ends.

 

No matter how much or little of our expertise, we are all equals in the playing field of prediction. The best we could do is the art of “guesstimating” where, based on what we know of the past and present, we try to project a rough outcome of the future. This is the best we could do, and at least we have justifications in doing so rather than throwing darts randomly and blindly around.

 

We are human after all.

 

1 – Business Times. 29 Dec 2023. https://www.businesstimes.com.sg/companies-markets/everything-wall-street-got-wrong-2023 (accessed 3 Jan 2024)