Michael Wilson Confirms There’s No Crystal Ball
The star Morgan Stanley strategist, who nailed the 2022 bear market for stocks, issued a mea culpa on Monday after his rough 2023.
Merely human after all.
Photographer: Christopher Goodney/Bloomberg
Howard Marks’ classic investing book The Most Important Thing has more nuggets of wisdom than I can count, but my personal favorites are his reflections on the futility of forecasting.
Marks, the Oaktree Capital Management co-founder, observes that macro forecasts on average are even less valuable than they are correct because they’re often the most wrong when the stakes are highest — at turning points. Some economists and strategists get it right some of the time, and they’re often lionized for it with investment industry awards and magazine profiles. But very few (at least among the folks that Marks and I know) get it right consistently. Here’s how Marks puts it in the 2011 book: