I am always puzzled about the failure of experts to predict anything. Take for example the sudden drop of oil price: most experts agreed one year ago that high prices were here to stay (and increase further); and the same experts now explain with the same smile and assurance that they see prices go down even more as they already halved in 6 months time. How come they can change their mind so quickly (and without shame it seems!)?
The reason is of course simple. Experts are experts on an earlier version of the world. They are experts on what happened, not on what will happen. In addition, in our ever more complex world, disruptive changes are more prevalent, leading to unexpected surprises – surprises not seen before that experts can’t of course foresee.
The thing is, future can’t really be forecast when it comes to factors that depend on human interaction such as markets and societies. Financial traders know this when it comes to share prices. Of course depending on what you want to predict, it will have some inertial factors attached to it that will make change more or less quick. Still the future remains unpredictable.
So instead of trying to predict the future, experts should certainly try to better analyze and explain past and present, and more importantly, devise mechanisms to dampen as much as possible the inevitable disruptions that shake our world.
Let’s come back to my heuristics already developed in ‘How to Overcome the Experts’ Confidence Conundrum?‘: when all experts agree on something and it becomes a kind of a consensus, then there is a good chance that there will be a significant change. It is time to take a contrarian position. Thus when I’ll see that everyone finally agrees that cheap oil is there to stay, then will be the moment to invest in oil companies – oil price is due to increase!
