Brandon Langley

If there’s one universal truth in investing, it’s this: nobody actually knows what’s going to happen next. That doesn’t stop Wall Street, the media, or your neighbor with the new day-trading setup from trying. In our view, it’s a whole lot of “6-7,” as the kids are saying these days.

In reality, financial markets have a special talent for humbling forecasters — often spectacularly.

Hollywood, oddly enough, understands this better than most economists. Consider “Back to the Future Part II”, where Doc Brown warns Marty about the dangers of knowing too much about the future. If Doc had ever seen analysts revise S&P 500 year-end targets for the tenth time in a year, he might’ve added, “Whatever you do, don’t publish a prediction — because the future is going to rewrite it immediately!”

Predictions can give us comfort. They offer the illusion that uncertainty can be tamed, measured, packaged, and presented as a tidy number, such as: “The market will be up 8% next year.”

But markets don’t operate on tidy numbers. They tend to operate in unexpected ways due to human behavior, randomness, policy decisions, innovation cycles, geopolitics, sentiment, liquidity, and sometimes just plain weirdness.