An “Economic Analyst” Blog

I was watching the other days a show where an experienced economic analyst was invited. The US markets opened lower, but were recovering. The Dow Jones index was -20 points from the previous close and was slowly gaining. When it reached -7 the analyst said that, if we wait a little longer, we’ll see the market go into the green area. Immediately, the index reached -1.3 points from the previous close and then started to drop and never recovered that day. It was quite funny.

The Dow Jones values were removed from the screen and not mentioned again for a few minutes

It is quite easy to make prognosis. If you have the feeling something might happen, you can say it will happen. Sometimes you are write, sometimes you are wrong. The secret is to make people thing you are right most of the times.

Therefore, whenever you guess something, you must make sure you let everybody know that “I told you so!”. If you guess it wrong, just forget about it. I noticed this is what most economic analysts do…

Another trick is to make prognosis in a way that will always allow you to say you were right. For example, you may predict that: if stock prices drop, there are high chances investors to buy gold and gold price to increase and if stock prices increase, there are chances gold price to decrease. It is a good prediction and you are covered both ways. You must be very unlucky to see the stocks and gold drop at the same time.

The conclusion of the first post in this “economic analyst” blog is that most analysts do not really make accurate predictions. We just have the impression they are smart people.