How does Buffett view the stock market forecast?

We always think that the only value of stock market forecast is to make fortune tellers profit from it.

Warren Buffett Anyone who has observed Warren Buffett for a while will know that his position on prediction is clear: don't waste your time. Whether it is economic forecast, market forecast or individual stock forecast, Buffett firmly believes that prediction does not occupy a place in investment. In the past 40 years, he has gained great wealth and unparalleled achievements. His method is to invest in companies with excellent performance, while avoiding the fear and disaster caused by speculating about future market trends. Buffett said: "In fact, people's greed, fear and stupidity are predictable, but the consequences are unimaginable."

For many followers of Buffett, market forecast is still a problem that needs to be discussed. Some people can promote their investment strategies without the interference of fortune tellers along the way. Most investors, out of goodwill, can't resist the temptation to sell them super insightful businessmen.

Throughout human history, we have always been attracted by people, concepts or systems that claim to have the ability to predict the future. Witches, fortune tellers, quacks, fortune tellers and fortune tellers, market forecasters and economic forecasters have won the attention of millions of people just by saying "I can tell you what will happen tomorrow today". Although there are many bodies of fortune tellers who were first respected and then spurned by people on the road of history, there are always rows of new fortune tellers scrambling to replace the fallen people because they know that they can always find an audience eager to listen to them.

Of course, it has obvious financial advantages to get tomorrow's money today, but I believe that the impulse of human beings to understand the future is far more complicated than money. I suspect that human beings have a deep psychological need to master the future. Perhaps the feeling of knowing nothing about the future is so uncomfortable that we can't help but be attracted to those who can alleviate this feeling. The study of this fragile psychological need should be added to Charlie Munger's lattice model.

We don't know the exact time when this reward will happen. We can also accurately predict that the stock price will continue to fluctuate, but we can't know exactly whether the price will fluctuate upward or downward next year. If you want to benefit from Warren Buffett's investment strategy, you don't need to correctly guess the future trend of the short-term market. The key issue is that you want to buy the right company's stock. From this, we can assure you that your choice will eventually make you profitable.

If you are the kind of person who has forgotten the market forecast for a long time, you can read the last chapter of this book directly. But for those who are seduced by the forecaster's advice from time to time, it will take several minutes to finish reading this chapter. I hope they can give up the idea of short-term future trend prediction, because it is neither necessary nor worthwhile. Just give a small example to illustrate the unpredictable and hidden dangerous waters that forecasters must cross: Let's take a look at the semi-annual forecast of the interest rate of 30-year government bonds in the past 16 (see Table 8- 1). In 3 1 forecast, not only the predicted interest rate is completely inconsistent with the actual interest rate, but surprisingly, the trend of 22 forecasts is completely wrong.