Fortune Telling is Complete Nonsense

The beginning of the year, to me, is a fantastic time. I enjoy the cold, crisp air; I enjoy looking back at the past year and reflecting; I really enjoy the idea that there is a fresh beginning- that there is some sense that a “do-over” is possible; and I enjoy looking toward the year ahead, thinking about what may be possible, and wondering what I will see when I look back over this year once it is completed.

What I do not enjoy doing, however, is pretending to see the future. In the past, it is something that I would do, as so many others do. But over the past few years, something has really changed my view on this; almost a profound realization, except that it’s something that we all know.

Here it is:

We cannot see the future.

We can make educated guesses, we can predict for fun, we can use odds to favor outcomes, but that’s about it.

Perhaps what I realized- so profoundly- was not that we cannot tell the future, exactly, since I already knew that, but that people are actually engaging in this nonsense ALL THE TIME. I don’t want to be one of them.

If you really listen to what people are saying, and step back for a moment, I think you’ll see what I’m saying. And it’s not just your friends predicting- for fun- who’s going to win a football game, or who’s going to win an election. It’s that there are entire industries doing this! At the highest level, and for tremendous amounts of money, there are people who predict the outcomes of those same games- absolute experts with tremendous amounts of information- and they still get it wrong! There are companies that use incredibly sophisticated polling to predict the outcome of elections…and still they get it wrong!

anecdote:

A little over six years ago, when my older daughter was first born, I decided to take a few weeks of parental leave from my job as a third-grade teacher. It was an amazing time of bonding, cuddling, poopy diapers, and all the other wonderful things that go on at the start of a new life. It was also a time of sitting around a lot because she was an unbelievable sleeper. Really, she slept for hours a day! Sometimes she’d fall asleep on my shoulder, sometimes in the rocking-thingy that plays music, sometimes the pack-and-play, but wherever it was, I ended up having time to fill.

Now, I’ve always been fascinated with the stock market, but up until this parental leave, I’d never had that much time to really dive into it. So I jumped at the opportunity. I started watching videos, reading articles (Investopedia was a big one), and watching CNBC. So here I was, learning about all this stuff while sitting with- or next to- my beautiful baby daughter, watching CNBC and getting- this was dawning on me- the most life-changing pieces of information I’d ever received:

They were actually telling me which stocks to buy!

Holy shit! Right? I was going to make a fortune! They knew, and were OPENLY SHARING, the stocks that were going to go up! I started doing some math and realized that I’d probably be able to retire and do this on the side within about a year.

In my little mind, it was just that simple. I mean, how else did these people get on tv? Especially on a station owned by one of the biggest television corporations there is. These were rich and successful people who knew what they were talking about!

So I took their advice. Nothing too crazy, of course. All my reading was teaching me not to put in more than I could afford to lose, and to make sure I understood the company, yada yada…but I bought.

And lost.

Maybe a stock went up a little here and there, but really it was…perplexing. Here I was getting great information from rich professionals who managed lots of money, and I was losing!

But this blog post is not about how and why this is. There are theories about all kinds of things and lots of people who can explain how this stuff works- actually, I’m now one of them- but here I want to point to something much simpler: while I thought I was listening to experts tell me how it was going to be, what I really was listening to was fortune telling.

simplistic scenario:

If you have a dollar and your friend comes over and gives you a dollar, then you have two dollars. But if you have a dollar and your friend is coming over later with a dollar, you do not have two dollars. All you can do is predict that you will have two dollars at some point in the future. But your friend is yet to come, so you really can’t be sure that this is going to happen.

Now, if your friend texts to say they are on the way and have the dollar, you can feel a little more assured about your future riches, but a lot can happen between your friend’s house and yours- traffic, public transportation problems, tripping and twisting an ankle, tripping and falling into a bar…not to mention forgetting the dollar!

It’s only when your friend is coming to your door, holding that thing out in the open for you to see from your window, that you can start to really predict with real certainty that this is really going to happen, that you are about to have two dollars.

And this is because of information. Specifically, because of a lack of information about the future. Because we cannot see the future.

(By the way, regarding the market, information that makes anything certain is called “inside” information and is illegal- unless you are in Congress…in sports, it would be a fix, which is also illegal.)

This is the point: so much of what you hear is people making predictions. That is: trying to tell the future.

And telling the future is absolute nonsense.

What is truly amazing is the number of professions and professionals out there dedicated to doing something that cannot actually be done. Telling us what’s going to happen in other countries, in politics, in the economy, in the labor market, and on and on. It’s everywhere: people pretending to know things that they can’t actually know! And getting paid a lot to do it! What a world!

So enjoy each new year. Enjoy the crip weather. Enjoy reflecting on the past year. Enjoy the feeling of a new start with a new set of goals!

Just beware of fortune tellers. They’re everywhere!

CVW Financial, LLC is a registered investment adviser.  Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies.  Investments involve risk and, unless otherwise stated, are not guaranteed.  Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.