MICHAEL DUFFY June 17, 2012
Billionaire Warren Buffett ... says it's not worth trying to forecast the short-term outlook for the stockmarket. Photo: Reuters
IF A doctor says you have cancer and will die soon, or an engineer promises a bridge will stand for 50 years, they're probably right.
But most attempts by experts to predict the future, especially in politics and economics, are no better than non-expert efforts, no better than random.
This was proven by US psychologist Philip Tetlock's 20-year study of 284 experts, and is something any adult ought to be able to confirm by recalling predictions they've come across in their own life.
A new study reported in The Economist has shown yet again ''the remarkable tendency for individuals to rely on [in fact, pay for] expert advice, even when the advice clearly has no useful component''.
So why do we continue to crave advice about the future?
The Economist suggests the need is psychological, not practical. Our fear of future uncertainty is so great it outweighs our experience that most predictions are worthless.
We'd rather have a wrong idea of what our world will be like next year than no idea at all.
This hunger for predictions supports an industry of share investment advisers even though, the article notes: ''No one can reliably forecast the short-term outlook for economies or stockmarkets; Warren Buffet, the world's most successful long-term investor, thinks it is not worth trying to do so.''