Tim Hartford on forecasting:
Professional pundits are not usually paid to make correct forecasts. They are paid to sound convincing, whether they are columnists or figureheads for asset managers.
I agree that sounding convincing is essential in order to win and keep business. However, I also believe that intellectual honesty is an important part of the long-term success of a business. Forecasting is not just challenging…it’s impossible. We have chosen to do our homework, gain a deep understanding of relative strength, and make every effort to convincingly make the case to investors for using relative strength as part of their asset allocation. It’s also a nice benefit that the data is on our side.
HT: Abnormal Returns
