You Don't Know, I Don't Know, Nobody Knows
You Don't Know, I Don't Know, Nobody Knows
Good luck trying to predict what the economy or stock market will do
Everyday we watch and read people trying to tell us what the stock market or the economy is going to do next. Some are very convincing. They may even have certain data or charts to help state their case. You would think they really know something that nobody else does.
The truth is nobody really knows what the market will do in the coming days, weeks, or months. Anyone that says otherwise or is giving their market “prediction” is just making their best educated guess. We all just continue to guess.
That’s the beauty of the market. Nobody knows. Everyone is assuming and guessing based off what they think they know. That’s why they open the market.
It’s no different than trying to listen to someone tell you who is going to win the football game, why and the correct score. They think they know, but they really don’t know. They’re giving their opinion or most educated guess. That’s why they play the game.
Who would have thought we’d see all-time stock market highs during a pandemic? Now with the pandemic in the rear view mirror, the stock market has lost all of its gains from the past two years and the economy is in a recession. Anyone predict that?
The risks to an economy and stock market are endless. Inflation, Fed actions, interest rates, supply chains, political risks, macro environment, major disasters, international risks, a pandemic and so on. You could continue adding more. There are just too many factors. Factors and variables that are out of everyone’s control.
Wall Street strategists and economists have more data, charts and information than any of us and they don’t even know. Yes, they do have more information to make better educated guesses. But day to day, week to week, month to month, they don’t know either.
Here were the S&P 500 price targets from top Wall Street strategists for year-end 2022, which were released in December 2021.
Where does the S&P 500 stand today? 3,790
Here are four quotes to remember from some of the worlds greatest investors.
“In the financial markets, hindsight is forever 20/20, but foresight is legally blind. And thus, for most investors, market timing is a practical and emotional impossibility.” - Benjamin Graham
“In all my 60 years in the stock market, I never found anyone whose opinion of what the stock market would do next week or next month was worth heeding.” - John Templeton
“I am certainly not going to predict what general business or the stock market are going to do in the next year or two since I don't have the faintest idea.” - Warren Buffet
“You never can predict the economy. You can't predict the stock market.” - Peter Lynch
The next time you think you know what the stock market or economy is going to do, remember nobody knows, not even you.
The Coffee Table ☕
Josh Brown wrote one of his best pieces in a long time entitled You weren’t supposed to see that. In Josh’s unique way he describes what started in 2019 and how the economy and stock market got to where we are today.
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