Oil’s Rebound and Other Wrong-Way Forecasts

So let's consider the Employment Situation report from the Bureau of Labor Statistics, which each month is accompanied by hundreds of forecasts from Wall Street economists and thousands more via Twitter. Almost all those predictions are wrong.

What other forecasts have been bandied about lately? The perennial favorite since the last recession ended is that a double dip is imminent. (Claiming the 2007-09 recession never ended isn't a forecast but rather a misstatement of fact.)

Forecasts of a tech bubble inflating and bursting was another favorite, though this one now looks like it's just happens to be accurate. The collapse of the so-called unicorns, closely held tech startups valued at more than $1 billion, was supposed to have happened long ago. Gold's surge to a one-year high finally gives some comfort to the bugs who for more than four years have predicted a rise, even as the precious metal fell from a high of almost $1,900 an ounce to less than $1,100 at the end of 2015.

The collapse in high-yield debt wasn't foreseen by many, at least if we go by money flows.

The trouble with all this is that the accurate calls are indistinguishable from random chance.

That's before we get to the broken clocks and the "permas," both bulls and bear alike. The folks who have been forecasting a market crash for five years deserve no credit for repeating the same prognostication year after year. If you predicted a decline of 30 percent, but indexes are still 50 percent higher than when you first issued your bearish warnings, you deserve no credit at all.

The battle against foolish predictions, or paying them much mind, requires continuous diligence. I plan on reminding you of that until the foolish forecasting stops. I predict that won't be for a long, long time.