Economists' Forecast Accuracy

Get yourself a copy of the May 09 issue of The Elliott Wave Theorist (EWT) for a brilliant discussion on economists' forecast accuracy. It contains these gems:

"Economists generally stay bullish on the macro economy. In most environments, this is an excellent career tactic. The economy expands most of the time, so economists can claim they are right, say, 80 percent of the time, while missing every turn toward recession and depression."

and uses this analogy:

"Suppose you eat at an outdoor cafe daily, but it happens that on average once every 100 days a terrorist will drive by and shoot all the customers. The economist has no tools to predict these occurrences, so he simply stays bullish and tells you to keep lunching there. He's right 99 percent of the time. He is wrong only 1 percent of the time. In that one instance, you are dead."


from: www.elliottwave.com


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