Saturday, August 22, 2009

Fortune Telling

Do you think that there is anyone who can truly predict the future? Are there really fortune tellers?

Me, I say no. Only God knows the future.

Yet even for those people who say that there are no such things as genuine fortune tellers, they still believe people can predict the future. For example, they believe what economists and investment analysts say regarding the direction the stock market is going to take in the next year.

Well, that's different, you might argue. After all, they aren't just pulling predictions out of thin air or gazing into a crystal ball; they are basing their forecasts on data and facts that are available to them and then extrapolating a likely result.

That's why, in the Wall Street Journal from the other day, I read three different versions of what is going to happen with the market: one said we're in for a big rise over the coming months; another said it is going to rise up but then come down and level off; and the third said we're in for another crash soon.

So who do you believe? That can't all be right! And of course they will qualify what they say with a disclaimer that no one can really know for sure. Well then what good are they? What gives them any more credence than you making your own prediction?

Intuitively you will then say that it's because these people are learned; they are experts in their field, whereas you or I are not and therefore not as qualified to make a guess.

But if that's the case, then why do we have three totally divergent opinions as to what the stock market/economy is going to do over the next year? Are sportscasters or television weathermen or weatherwomen any more accurate? I doubt it. Short-term the weather folks can tell you what is going to happen but then so could I if I had satellite pictures.

Let's say you drive from Los Angeles to San Francisco. How long is it going to take you? Well, you pull out the map or GPS and compute the number of miles divided by what you feel is going to be your average speed and there's your estimate. That assumes you travel at that average speed, however, and how likely is that? It could be likely, it could not be. You don't know. And the more you get sidetracked on one thing, the farther off your estimate moves. Of course you might run into a really fast stretch to catch up.

The point is, you just don't know. So when it comes to the stock market, I would say that your guess or mine is just as good as the next guy's, even if that next guy gets paid six or seven figures to pontificate where the market is headed.

I remember watching an episode of 77 Sunset Strip (do you remember that? Kookie?) in which the characters somehow got into a fix because they had the reputation of being able to pick winning horses. They had to pick all the winners for the next day and spent all night going through handicap lists, facts about the horses, jockeys, etc. and then made their selections. And, since back in those days endings had to be happy, they wound up picking all the winners! That episode ended with them slapping themselves because they forgot to place their own bets on the horses; they had only told the other people what to bet on.

Then there was an episode of Room 222 (now we are getting a little caught up, like when things were filmed in color) in which Mr. Haines had his classroom study the stock market. Over the course of a week or two, the students efforts paid off in their selecting stocks that made gains.

These two examples make it appear that if you study hard enough, you can predict the future.

But you can't! You can make an educated guess but again, I say one guess is as good as another.

Oh, and as for the "real" fortune tellers - they aren't just pulling predictions out of thin air. They're closely studying you for clues about what to tell you regarding your own future because they've learned to read people. They don't know what your real future is going to be, but they've trained themselves to get clues about telling you what you want to hear. And when someone tells us what we want to hear, we generally think highly of that person, don't we?

Below is an accurate representation of the thought processes involved when making predictions:

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