Personal Ruminations

Stock forecasts: We tag the stock a 'Buy' with a one-year forecast of $48. Hold on. We didn't see that coming. We're revising our estimates to $23 but maintain our 'Buy' rating. Oh, my. Didn't see that either. Who knew? back up to $41. However, it's a 'Hold.' What's that? Sell, sell, sell! Now! Too late. Oh well.

The same can be said about oil prices. Analysts had it going down - as in away from current levels - towards the $20-25 range. Then the war came and it shot up at which point, experts revised their forecasts. They chase the wind. "What we really meant..."

Moral of the story? Ignore forecasts and predictions outright.

NOBODY knows. Not even trends and patterns can help you out. More often than not, we fail. Besides, what's the fascination with needing to predict things? Prognostication is a miserably humbling experience - unless your shameless and always have an excuse as to why you miss your predictions.

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I used to be asked this in interviews all the time: Where do you see yourself five years from now?

"In your pants, honey. Although I think all I need is 20 minutes..."

It was (and remains) such a stupid question it had become a standard question asked by the interviewer.

"Oh, he sees himself as President of the company in five years. I like that. Either he's a dreamer, is crooked or is after my job. Let's hire him!"

***

I look at projections with enormous skepticism. As I described with my bank loan fiasco, I had to project my business figures two years out. Very blah, blah.

Projections are going to tell me what I input. Nothing more or less. If my entire assumptions are off - and it can happen because life stinks and is unpredictable - then the projections I made will make me go bankrupt. Of course, society ridiculously looks disapporvingly upon bankruptcy. "You were what?"

I love all these people scrutinizing projections as if they know anything. "We just want to make sure you're not over looking anything." Which means "I'm paid to nit-pick over things I know little about."

Of course, we're missing something! And that's ok!

Do your due diligence. Don't be a fool. But all you need to do is basic math. Be honest and realistic. You don't need a degree in finance or have an MBA (the system wants you to believe you need that) to determine if your business plan is a winner or loser.

I don't care who you are, unforeseens are part of the game and there's no way to account for that. None.

Don't buy the "we're just managing your risk" angle either. A component of risk no one talks about is luck making it hard to control and manage.

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Which is why, a point I try to hammer out here on this blog, I scoff and laugh at anyone trying to "plan" our existence. Bureaucrats or CEO's - both are fools for thinking, based on whatever models they adhere to, they can regulate anything.

Which is why, Hayek to me is severely under appreciated.

Arrogance makes us believe a piece of legislation can put humanity on a leash.

Life is BOTTOM-UP; not TOP-DOWN.

What's so hard to understand?

***

Which is why (I like that phrase) I don't use Excel or any of these software that are a "must" today in the business world. Whenever I used it I couldn't help but think to myself "well, here's a fine tool designed to trick me." But wooowwww! It's so cooool!

"B-but, the excel sheet said..."

All I need is a damn phone and a copy book just to jot down the ESSENTIALS. Everything beyond that is just cosmetic trying to justify an existence, outlook or job.

I'm serious. I rarely had a bag or knapsack in University. All I did was carry around a beat up red binder containing the contents of all my classes. I paraphrased lectures since for the most part professors didn't say much. I usually looked for a comment outside the realm of academia - e.g. personal opinion - and wrote that down and would use it as a focal point for a paper.

People would copy word for word a lecture like possessed machines. 15 pages of nothing but wasted ink or lead. Some would bring in tape recorders. Might as well write in a test, "And the professor then said this is so. I believe him because he go that idea from another professor and I'm faithfully continuing this tradition."

It's how any great institution works. It worked. Notice how we say, "he's no dummy. He went to Harvard!"

I agree. He's not dumb. Just not necessarily street smart.

I always wondered if they'd actually go home and listen to their recorders. Not me, man. If I retained it or wrote it then it was good enough for me. I'd stew on that. If it was good enough so be it. If not...no Masters for me. Boo-hoo.

Maybe I was too aloof. I don't know. God bless real students.

Seinfeld was on. And then I had a date. And then I'd go play hockey. And then I'd study. And then I'd get a B or A.

Whatever those letters meant.