How the “Experts” Got It Wrong
We enjoyed an article in the January 12, 2009 issue of BusinessWeek magazine so much that we thought we’d include some of it for you here. What follows are observations and predictions about the economy in 2008 by well-known and highly trained financial professionals, writers, investors, and economists. It is interesting to note that, in the course of our research for this book, we kept a file of predictions and observations that well-known analysts, investors, and economists make. In reviewing the file for this section of the book, we noticed that it is very hard to find anyone who will predict economic movements beyond a year. Hence, it limits just how wrong they can be. It also makes it very hard to compare our long-term predictions that were made in October 2006 with anyone else’s predictions, since so few people in 2006 made predictions for 2008 or 2009. That we can show the accuracy of our long-term predictions against others’ short-term predictions, which are much easier to make, shows the power of our financial and economic analyses in understanding the economy. For most investors, long-term predictions are really the most important because most investors are investing for the long term, whether it be for capital appreciation, capital preservation, or for retirement. Financial analysis has to be accurate long-term to really be valuable.
Here are the statements of interest from the January 12, 2009 issue of BusinessWeek:
“A very ...