Breaking Down Investor Predictions

Investors put a great deal of emphasis and importance on predicting trends. They spend a great deal of time contemplating and writing about them. They will also be the first to call out when they get one right. The more I read work from other investors, the more I see this behavior.

Calling back when you were right about something seems like a self-congratulatory motion. Yet, who would want to avoid being recognized for their ability to predict the future? I am amazed at how much I see investors refer back to previous posts or blogs in which they read the tea leaves correctly.

There is something valuable in predictions, more than just ego inflation. It is the stance of putting yourself out there at the risk of being wrong. My friend, John Francis of Stout St. Capital, once told me that you need to have conviction in something as an investor. That statement resonated with me. How can you allocate someone’s capital to a company without a firm resolution on where the future might lie?

If you want to close the loop on predictions fully, one should dissect where they were right AND wrong in their previously made predictions. That would be the best learning lesson.

I think I am going to do this myself…