Bohring into the Future?

“Prediction is very difficult, especially if it’s about the future.” – Niels Bohr

The quote by the Nobel Laureate went through my mind as I read about the various economic forecasts by Fed governors and Regional Bank Presidents over the years. A couple Wall Street Journal reporters tabulated 700 predictions between 2009 and 2012, scoring them on how accurate they’ve been.

The officials most cautious on the economic outlook were the most accurate. But what’s interesting isn’t so much who was right, but what people do when their predictions are proven wrong. Some, like James Bullard, question their economic models. But it takes real integrity to question your very premises—like Minneapolis Fed President Kocherlakota, who said, “You have to learn from the data.” It’s more typical that people question the data, or the timing, or whether an accurate forecast was even possible–anything but their foundational assumptions.

Economic forecasts are important because they imply policies and investments that can help us all meet our goals. The future isn’t a random walk. If we want to do better, we need to learn from our mistakes.

Douglas R. Tengdin, CFA

Chief Investment Officer

By | 2013-07-31T09:37:00+00:00 July 31st, 2013|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. –
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