When it comes to forecasting the majority of things, the art of prediction is not an endeavor consistently done well by most who attempt it!
For anyone who has listened to economists forecast data releases and future GDP growth or meteorologists forecast this weekends weather, we know that they are typically wrong as often as they are correct. And yet, as the joke goes, there are few jobs like these where accuracy can be rare and job security fairly certain.
Making the job of prediction even more difficult is the fact that there are currently so many geopolitical wild cards along with domestic issues that can have a very large impact through as little as one headline.
Today it’s an unstable Italy impacting U.S. stocks and bonds in the form of a flight to quality while last week Russia and Saudi Arabia unexpectedly announced plans to increase crude oil production pushing the price for oil lower. Before that, the uncertainty swirling around whether a North Korea summit would actually occur caused markets to whipsaw. In other words the only certainty we have at the present time is uncertainty.
Consensus was that a strong U.S. economy was going to result in multiple Federal Reserve rate hikes leading to a 10-year U.S. treasury yield of possibly 3.5% or higher. And, once the yield pierced 3.0% surging to 3.11%, it was generally felt that a 2-handle would not be seen again.
Similarly, listening to the talking heads they felt that a strong economy would lead to greater demand for crude and that the next stop after WTI crossed $70/barrel was that it would be $80 before it was $60.
But obviously when it comes to forecasting, the two charts below show that there are no sure things when investing or speculating (i.e. Bitcoin)!
In other words the only real ‘locks’ are on doors and, often, you need to closely consider whether a forecaster is objective or actually has a vested interest in a particular price move being long or short the market!
So What’s An Investor To Do?
Basically it’s often a good idea to avoid chasing any market as nothing typically goes up or down in a straight line. If an investor is patient and selects entry points they are comfortable with whether it be for a stock or a home, an opportunity will at some point typically present itself.
This is true whether one examines the price action in Bitcoin or New York City real estate.
Sometimes it simply requires patience and, in the unlikely scenario that a price keeps running higher and never pulls back, the knowledge that you will sometimes agree to miss the boat.
Michael Haltman, President
Hallmark Abstract Service
Phone: (646) 741-6101