Subscriber,
What a Fourth! As we celebrate the birth of American self-determination, the peoples of our former overlord England and former ally France both vote on a new path forward, while people around the globe pray for democracy and peace to prevail in both Europe and the Middle East.
Most Americans are anxiously pondering the state of our union today, myself included, but if you’re trying to make sense of the state of the market, including all of the opinions purporting to explain the past six months and even predict the rest of 2024 and onward, I’d recommend watching this short video of Ben Graham and the dean of the Columbia Business school taking questions in 1955. If you don’t have time to watch the entire thing, here’s an outtake:
[08:48]
Student: Are Wall Street professionals usually more accurate in their near or long term forecasts of trends? What I mean is, are they more accurate in the shorter term or the longer term forecast?
Graham: Well we’ve been following that interesting question for a generation or more, and I must say frankly that our studies indicate that you have your choice between tossing coins or taking the consensus of expert opinion and the results are just about the same in each case…My own explanation for that is this—that everyone on Wall Street is so smart that their brilliance offsets each other. And that whatever they know is already reflected in the level of stock prices pretty much and consequently, what happens in the future represents what they don’t know.
As the markets once again bend to chatter about new technologies conquering age-old norms, including human nature and mathematics I presume, consider this a timely reminder that the more things change, the more they stay the same. Also reflect on how many experts predicted the events of the past several months.
God Bless America!
James