Interesting exercise from another blog:
- Go to http://news.google.com
- Search for ‘unexpectedly’ or ‘unexpected’ or ‘than expected’
- Marvel at the news (mostly economic) that the experts and pundits didn’t predict.
- Watch what such surprises do to the market.
Or consider these quotes from Harvard’s Economic Society around the 1929 market crash (via Futility Closet):
Nov. 16, 1929: “[A] severe depression like that of 1920-21 is outside the range of probability.” Jan. 18, 1930: “With the underlying conditions sound, we believe that the recession in general business will be checked shortly and that improvement will set in during the spring months.” May 17, 1930: “General prices are now at bottom and will shortly improve.” Aug. 30, 1930: “Since our monetary and credit structure is not only sound but unusually strong … there is every prospect that the recovery which we have been expecting will not be long delayed.” Sept. 20, 1930: “[R]ecovery will soon be evident.” Nov. 15, 1930: “[T]he outlook is for the end of the decline in business during the early part of 1931, and steady … revival for the remainder of the year.” In 1931, strapped by the depression, the Letter ceased publication.
I’m certainly no expert and would fare no better, but I wonder what these experts are for when markets and plans are based on results that are often unexpectedly higher or lower than anticipated.