In a matter of two months, a miraculous number of people became experts in virology in order to predict something they know nothing about.
That’s the state of the market today. It also happens to be the state of the market every day — minus the new armchair virologists.
Investors want to know what happens next. We take comfort in thinking we know — especially in extremely uncertain times like these.
The problem lies in predicting a multitude of factors, their effects on businesses, on markets, on people’s behavior, and any randomness that might occur in the process, all while staying unbiased.
In short, we’re not great at predicting the future. In fact, we’re exceptionally bad at predicting the major turning points that have a huge impact on markets.
Yet, investing is about the future so we can’t exactly get away from it. As investors, our decisions always involve some level of uncertainty. Continue Reading…