FYI: The McKinsey Global Institute has just released a new report with the following gloomy prognostication:
Our analysis suggests that over the next 20 years, total returns including dividends and capital appreciation could be considerably lower than they were in the past three decades. This would have important repercussions for investors and other stakeholders, many of whom have grown used to these high returns.
This report does one of the things I like least: It makes a forecast
Regatds,
Ted
http://www.bloombergview.com/articles/2016-04-29/forecasters-keep-trying-to-predict-the-future
Comments
Our venerable and highly prized Linkster seems to be on a thematic roll. Over the last few days he has uncovered and referenced a series of articles by distinguished financial writers who are highlighting the difficulties and dangers of market forecasting.
Rather than being proven winning gurus, when the predicted timeframe elapses, these “experts” are much more often proven wrong than right. That’s the nature of the beast. Forecasting is always hazardous duty.
I’m mentally combining the main thrust of this article with 2 other recent ones that Ted discovered. These 2 other excellent articles that basically address the same subject, and not unexpectantly reach similar conclusions, are referenced here for your convenience:
http://www.mutualfundobserver.com/discuss/discussion/27255/ben-carlson-when-mediocrity-trumps-brilliance
http://www.mutualfundobserver.com/discuss/discussion/27259/barry-ritholtz-why-active-management-comes-up-short
Based on the number of registered visitors, these 2 articles have not been very popular. That’s too bad since they provide actionable insights for many mutual fund investors. They emphasize the research that establishes that, time and time again, “forecasters can’t forecast”. Forecasters do no better than dice-throwers. Yet that group holds the respected attention of the investing public, and are universally honored when some of their predictions are realized (as statistically some fraction must always be so).
As investors, we accept risks. That’s an integral part of the game. Hopefully, these risks are calculated risks in that the chances for failure are properly reflected into our decision making. Bigger rewards should be anticipated with bigger risks (at least that’s the theory).
I seriously doubt the wisdom in any of these forecasts; just far too many interacting moving parts and unknowable unknowns.. I’m sure these forecasters believe in their perceived wisdom. I don’t.
The historical evidence clearly challenges them. Bluntly said: Their record stinks. Hell, I can’t forecast what I’ll be doing a week from today much less than what I’ll be doing 20 years from now. Actually, given my age, I statistically have a pretty good idea however. But that’s just me.
Forecasts might be fun to read, but I consider them mostly as mere entertainment. Worrying about a 20 year market forecast is a waste of energy; adjusting a portfolio based on it is pure foolishness. Any action is likely to be detrimental to end wealth.
These articles warrant more attention.
Best Wishes.
Regards,
Ted
Warren Buffet's Annual Shareholders Meeting to be streamed live tomorrow Saturday April 30th 10 AM EDT
Yahoo's marketing
"For the first time in the company’s history, Berkshire Hathaway will live stream its annual shareholder meeting for all of the world to see. Investors and non-investors alike will be able to witness history, live, as Chairman and CEO Warren Buffett and his right-hand man Charlie Munger share their unscripted views on the company, the markets, the economy, and whatever other topic that may come up. Yahoo Finance will be the exclusive host of this momentous event."
https://finance.yahoo.com
http://finance.yahoo.com/brklivestream
Thank you for the alert. I'll try to see the event. And it is an event; these guys are terrific.
Your heads-up deserves to be posted as the primary topic. I recommend that you repost to attract a wider audience. All MFOers would benefit from the talks.
Best Wishes.