Thursday, February 12, 2009

This Blog Has Moved

This blog has moved to a new address.  The new address is:

In addition to moving, I have also invited my business partner, Tony Hixon, to join me by blogging his thoughts on money and investing.

Please visit the new site and subscribe to our blog.  If you currently subscribe to updates of this blog you must re-subscribe to the new blog to continue to receive updates.  The best way to subscribe is with an RSS reader like Google Reader.  You can also subscribe by email.  To subsribe, just click on the links in this post or visit the new blog and click on the orange subscription icons on the right sidebar.

Tuesday, January 20, 2009

Peter Lynch on Forecasts

"There are 60,000 economists in the US, many of them employed full-time trying to forecast recessions and interest rates, and if they could do it successfully twice in a row, they'd all be millionaires by now.  Last time I checked they were all still working."  -Peter Lynch

Monday, January 12, 2009

My Prediction For 2009

My only prediction for 2009 is that your prediction is wrong.  Yes, that's right. I predict that your prediction won't come true.  

We love predictions.  I can't figure out why because 99% of the predictions I hear never come to be.  About a year ago I was at an event that featured an economic forecast by Brian Wesbury.  I like Brian.  He's informative, optimistic about the future, and he's a great speaker.  His speech was loaded with some intriguing economic insight, but the one point I remember more than anything else was his prediction that the Dow would reach 15,000 by the end of 2008.  You know the rest of the story.

I left that event with some excitement.  Why was I excited?  Because I liked Brian's forecast, and I wanted to believe it was going to happen.  Brian is an expert on the economy, and his forecast was exactly what I wanted to happen.  The problem: we must learn to EXPECT ANYTHING in spite of what we want to see happen.

I often have people ask me what I think will happen.  Their question is usually within the context of a very short time frame (a year or less).  I don't make precise short-term predictions or economic forecasts, because I know I'll be wrong.  Instead, I try to focus on what's knowable and important.  My short term predictions really wouldn't even matter because our firm has a long-term approach to our investment philosophy.

Apparently I'm not the only one who liked Brian.  They have invited him back again this year.  I can't wait to hear his prediciton:)