Forecasting whether..or not

Thursday 19th March 2020

If you were to twist my arm I’d have to admit that I’m sceptical of the value of  day to day commentary on the markets. The professionals have already done what they’ve done and the punters should really be letting the falling knife drop where it will.

Even the analysts have got some of it completely wrong – and I’m not talking about the ‘teenage scribblers’ about whom  Nigel Lawson was contemptuously dismissive when he was Chancellor. For example,  quite grown up gurus were recommending a couple of airline stocks only a few weeks ago, and now investors are nursing heavy losses. 

Forecasting in uncertainty is a special skill, and there is, even in relative tranquility, no guarantee that what happened in the past is a guide to the future. If you have a spare hour  or so, try the 1996 financial bestseller ‘Against the Gods, the remarkable story of Risk’, by Peter L Bernstein – on what the blurb describes as ‘the remarkble intellectual adventure  that liberated humanity from the oracles and the soothsayers’.

So amid this everyday, unprecedented turmoil of March 2020, is there a rune or two indicating  a turning point ? 

For the markets, according to one of my guests on The Business Breakfast  (, it’s not about the billions of central bank money being pumped in, but when the virus numbers decelerate in Europe. Craig Erlam from Oanda believes there’s plenty of cash on the sidelines and professional investors are anxious to get in at the right time. ‘Then, he says,’ that central bank injection of cash will act as rocket fuel for a rebound’. My guest this morning, David Buik, said that ‘security and society are  the most important things.     if they survive this then I will die a happy man’.

I don’t wish my old chum any ill, but I’d like to see a happy Buik one day. And all of you, too.


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