The Pundits (aka. Talking heads) are Never Wrong…

A new (ish) web site has begun to track the accuracy of the predictions made by the pundits and readers of tea leaves in a variety of domains (not the least of which is finance and investing).

BarryRitholtz explained the problem with predictions as follows in his recent blogpost on the matter:

Pundit tracker is an interesting new site that proclaims its mission as bringing accountability to the prediction industry.

The site notes the Media’s lack of institutional memory. This creates perverse incentives — Pundits learn that brash predictions generate news coverage. If it turns out that they are wrong, well, it hardly matters, as no one ever remembers or calls them out on it. On those occasions when the blind squirrel finds the occasional nut, they can selectively tout that correct call for self-promotional purposes. The entire cycle then repeats.

Please share the most interesting financial prediction you have seen in the past few months with us.

Please never take any prediction very seriously, even when the pundit got a previous prediction right, without looking into the fundamental basis for the prediction, considering the alternative possible scenarios and the overall track record of the pundit.