forecasting
The only function of forecasting is to make astrology look respectable
The rule
A confident, exact price forecast is selling, not knowing. The future of a price is truly uncertain, so no one can name it to the rupee.
Where it flips
A range with clear assumptions is not astrology. Honest work can show what happens if certain facts hold. The fix is to prefer 'if this, then that' reasoning you can check, over one confident number. Do not stop thinking about the future at all.
The next move of a price depends on facts nobody has yet. So no honest reader can name it exactly. A forecaster who gives you a precise level and date is selling certainty that cannot exist. The polish of the guess shows how hard they are selling, not how much they can see.
A worked example
An analyst says a stock will hit a neat round-number target within three months. The clip spreads because the number feels like real knowledge. When the date passes and the target is missed, a new target quietly takes its place. [illustrative]
How to spot it
- ·an exact target with an exact date
- ·no assumptions you could test yourself
- ·missed forecasts replaced with no account
- ·more certainty as the detail drops
John Kenneth Galbraith · A Short History of Financial Euphoria