Why do some people have the confidence that they can easily predict the crash of any financial market?

in #finance6 years ago

View the original post on Musing.io

Let's get one thing straight. Predictions are forecasts and they can be either smart forecasts or ignorant forecasts.

Experts who understand the basic economics and market movements can analyze factors and look at historical cases to make correlations. No matter how good the prediction model is, there is always a certain % of uncertainty.

Predicting a crash is not that hard because sooner or rather, price corrections happen. And if you make predictions all the time, of course a few of them will turn out accurate.

As these experts get more and more sharp in making predictions, they develop the confidence with practice, time and effort. That doesn't mean they are going to be right the NEXT time.