Clive Hale

Clive has been involved with the investment industry for over 40 years as a fund manager, funds researcher, non-exec director, investment co

Dec 17, 2017
2 min read

As long time readers will know we do not put much credence in end of year forecasts; nor in fact forecasts in general; the Fed and the Met Office being stand out examples. As an alternative to what is going to happen in 2018 (“Markets will fluctuate”…attributed to J.P. Morgan) we have put together some memorable quotes we have picked up during the course of 2017.

Firstly, the reality about forecasting – “Forecasts are financial candy. Forecasts give people who hate the feeling of uncertainty something emotionally soothing.” Thomac Vician Jnr student of Ed Seykota.

And equally damning is this – The Illusion of Certainty – Gerd Gigerenzer – “Many of us smile at old fashioned fortune tellers. But when the soothsayers work with computer algorithms rather than tarot cards, we take their predictions seriously and are prepared to pay for them.”

“Our industry is full of people who got famous for being right once in a row.” Howard Marks

And then we have forecasts with added hubris for good measure…”Inflation is not where we want it to be or where it should be” – Mario Draghi

At least one person gets it! – “I never think of the future – it comes soon enough” – Albert Einstein

As does the Sage of Omaha – “Forecasts usually tell us more of the forecaster than the future” – Warren Buffett

And the late, great Peter Bernstein – “Forecasts create the mirage that the future is knowable”

Or put another way – “After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made big money for me. It was always my sitting.” Jesse Livermore – Reminiscences of a Stock Operator

Another quote from Livermore reminds us that it won’t be different this time…”There is nothing new on Wall Street or in stock speculation. What has happened in the past will happen again, and again, and again. This is because human nature does not change, and it is human emotion, solidly build into human nature, that always gets in the way of human intelligence. Of this I am sure.”

There are quite a few “idiots” around right now…allegedly “The problem with bubbles is that they force one to decide whether to look like an idiot before the peak or an idiot after the peak” John Hussman

Advice on the pricking of bubbles – “The specific manner by which prices collapsed is not the most important problem. A crash occurs because the market has entered an unstable phase and any small disturbance or process may have triggered the instability. Think of a ruler held up vertically on your finger. This very unstable condition will lead eventually to its collapse, as a result of a small or the absence of adequate motion of your hand or due to any tiny whiff of air. The collapse is fundamentally due to the unstable position, the instantaneous cause of the collapse is secondary.” Didier Sornette French geophysicist

Statistics – sadly an under rated business – “Lottery: A tax on people who don’t understand statistics.”

“All models are wrong, but some are useful.” George Box statistician

We are promised higher inflation in some quarters but…”Despite the cost of living, have you noticed how it remains so popular?”

Most puzzling development in politics is the determination of European leaders to recreate the Soviet Union in Europe – Mikhail Gorbachev

Here is some intelligent advice from a surprising source – “Sometimes your best investments are the ones you don’t make.” – Donald Trump.

And from another head of state turned technical analyst – “Follow the trend lines not the headlines.” Bill Clinton

“Government is instituted for the common good; for the protection, prosperity and happiness of the people; and not for the profit, honour, or private interest of any one man, family, or class of men” – John Adams, 2nd President of the United States. Something the 45th should bear in mind…if only

“The main difference between government bailouts and smoking is that in some rare cases the statement “this is my last cigarette” holds true.” Nicholas Taleb

Economists are getting a bad press so we won’t buck the trend – “Economics is like a dead star that still seems to emit light, but you know that it’s dead.” – Nicholas Taleb

“Anyone who believes in indefinite growth of anything physical on a physically finite planet is either a madman or an economist” – Kenneth Boulding

“I imagine that Ben Bernanke, Mario Draghi and Haruhiko Kuroda all stay awake at night imagining ways to force negative rates on savers. But the larger question, beyond a sociopathic desire to control others in service of one’s own intellectual dogma, is why anyone would advocate such policies. I can’t emphasize strongly enough that there is no economic evidence that activist monetary intervention has materially improved economic performance in recent years.” John Hussman

“Reliance on monetary policy as an effective stabilising device would involve a high degree of instability in the capital market. The capital market would become far more speculative and longer run considerations of profitability would play a subordinate role. As Keynes said, “when the capital investment of a country becomes the by-product of the activities of a casino, the job is likely to be ill-done.” — Kaldor, 1958

And finally’ in a lighter vein…”Grow your own dope. Plant an economist.” Graffiti seen at the LSE

Lastly some classics that you may have seen before but are worthy of repetition mainly because they will make you smile.

“The fact that there is a highway to hell but only a stairway to heaven tells you something about the anticipated traffic…”

“There are three excellent theories for arguing with women…none of them work”

“Some people see the glass half full. Others see it half empty. I see a glass that’s twice as big as it needs to be.”

George Carlin

For those of us with teenage children – “Why can’t life’s problems hit us when we’re 17 and know everything?”

Nothing like a good game of cards – “I stayed up all night playing poker with Tarot cards. I got a full house and four people died.”

“I don’t exercise because it makes the ice jump right out of my glass.”

“The trouble with quotes on the internet is that it’s difficult to determine whether or not they are genuine” Abraham Lincoln

And as Christmas is coming we will all need to do follow this guide

How to reduce your stress:

1 don’t respond to negativity
2 go for a walk, be active
3 be honest
4 read, write more
5 give without expecting a get
6 breathe deeply
7 forgive first
8 write thank you notes
9 be a better friend
10 you are not your job
11 complain less
12 laugh more

Especially 12!

Have a very Merry Christmas and all that you wish for in the New Year.

Clive Hale –The View from the Bridge – 17th December 2017