Twelve years ago I started making predictions as an experiment on my radio show. The plan was to have some fun making educated guesses about the markets and then have a good laugh about them a year later. Instead, a funny thing happened: they all came true. Here is a link for my predictions online.
So far I am 29/31, with two predictions pending. I predicted the 2008 real estate bubble, and got my clients out of REITs before the crash, but the credit freeze had a negative effect on the rest of the market, that I didn’t see coming. In the end, we faired far better than the markets and our investments have rebounded nicely over the past few months.
Sometimes I get lucky, like the Pension Protection Act prediction I made in October 2006. I ended up predicting that more regulation would lead businesses to avoid pension plans, because I missed the part about how it was suppose make it easier for small businesses. Although I was happy to get it right, I never forget that it could have just as easily gone the other way. Had I known that, I would have predicted there would be more time tentative programs in the future and I would have been wrong. Sometimes it’s just plain better to be lucky.
At the basis of having successful investments is hard work. I spend a tremendous amount of time doing research to prepare for each of my radio shows, and my staff of financial advisors assists me in that project. Between the elbow grease and the research and experience behind my predictions, it is hard to be wrong.
In addition, what makes it hard to be wrong is that we make long term predictions. We buy good things and keep them forever. If you do that, it makes it difficult to be wrong if you’ve done the hard work to begin with. And one other thing, I’ve found the harder I work, the luckier I get. Some of my predictions, you may notice, I was right to the very day of the best time to buy. That’s luck but I’m always glad to have luck because it never hurts. This combination of hard work by a sophisticated group of analysts and just plain old good luck has served us well.
