Don’t Be So Sure

There seem to be few things more appealing to people than lambasting others for being wrong. Yet, despite the boundless evidence that all of us are wrong quite a lot of the time, we still embark on vain searches for leaders who will not be. Do we really expect to find them?

Many of my friends work in the financial services industry, where forecasts and opinions are a regular part of the job. You can tell who forecasts for a living by their patience with other forecasters. You can tell who is amateur by the viciousness of their attack when another person’s forecast turns out wrong. We in the business noticed long ago the glass house we inhabit, and haven’t touched the rough edge of a stone in years. Newcomers to the world of forecasting haven’t devoured their share of ground glass, and so gleefully send the stones of criticism whizzing toward the latest gaff maker who, you can be sure, did his or her darnedest to be right.

In my own history of forecasting, one of the most fascinating ways to be wrong has been to believe too early that I made a mistake and then to be proven by later events to have been right all along. Consider the recent stock market and attendant comments from those trying to point where it will go next. A prominent prognosticator began saying a couple of weeks back that the market was due to go up any day now, then changed his tune to gloom…two days ago. Yesterday, the market surged 3.3%. He was wrong when he said two days ago that he’d been wrong. He’s too honest to ignore that and say now, “See, I told you it would go up!” but he could well do that only to see it go down again.

The worm turns, and about all we can count on are steady streams of cash. If you don’t own income-producing real-estate assets and at least some dividend-paying stocks, you’re in possession of a healthier pain threshold than I. Why? Because you’re own estimates of where prices are heading are bound to be wrong one of these months, too, and steady cash flow lessens the damage of downward arrows.

This entry was posted in Dividends, Portfolio Management and tagged . Bookmark the permalink. Both comments and trackbacks are currently closed.
  • The Kelly Letter
    A Complete Investment Management System
    The Kelly Letter  every Sunday morning by email.
    Like no other. Many subscribers say this is the best read of their week, astonishing in its ability to distill seven days of noise into one succinct overview of the very few items that might matter. Start your Sundays right!
    A one-page Quick Start Guide
    with page number references to full information in The 3% Signal. You'll receive access to this right away so you can begin transforming your portfolio into a performance machine immediately.
    The 3Sig Calculator.
    A thing of beauty! You'll use it to generate your own personal signals every quarter including exact share amounts to buy and sell based on your account balances. It emails you the results to make later quarters easy by keeping last quarter's numbers at your fingertips. Some subscribers say this tool alone justifies their subscription price.
    The subscriber-only section of this website
    where likeminded investors are commenting on notes and discussing in forums. Jason joins these interactions every day. They're a treasure trove of investing tips and wisdom.
    The archive of Kelly Letter notes.
    It’s a research center, searchable and smartly tagged to make gathering time-stamped material on covered subjects easy.
    The subscriber podcast.
    Jason reads every letter word-for-word. This feature was requested by subscribers who prefer audio learning. They listen on their Monday morning commute, during a workout, or while reading along at their computer.



    $200/year
    Save 17%



    $20/month
    Pay as you go
    Or sign up to receive free email and learn more about the system.
    Do you have a question?
Bestselling Financial Author