Comment on Stupid Questions March 2015

Fri, 06 Mar 2015 11:05:31 GMT

Yes, for example Michael Lynch. He wrote a surprisingly modest column here about his predictions. The problem with Lynch, as he freely concedes, is that he absolutely didn't predict other price movements.

Paul Krugman made the point recently that the only stock market forecasters who correctly predicted a market drop were those who always predicted falling markets. This is known as the ‘stopped watch’ approach to forecasting: constantly make one prediction and eventually the market will move in that direction. Especially for oil prices, which are highly variable, this works wonders to the point where the great Adam Sieminski often joked that you should predict the price or the date, but not both...

For the past several years, I have been suggesting that, without major improvements in the geopolitical situation, long-term oil prices should be about $60 a barrel. For this, I was derided by a number of observers, including the late Christophe de Margeri, CEO of Total, and I have been persistent the lowest of the ‘major’ forecasters, as seen in the DOE survey published earlier this year.

So am I a stopped watch? Or clever?

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