Globe popular economist John Kenneth Galbraith once stated: “We have two classes of forecasters: those who don’t know and these who never know they don’t know.”
Mr Galbraith might or may possibly not have been joking, but standard viewers of ABC TV’s The Company may be beginning to feel he was appropriate.
Since The Company is rapidly becoming a spot where professional economists go to be humbled.
Let me clarify.
Every year, at the start of the year, The Enterprise asks a group of financial “authorities” to predict where they believe the stock industry, the dollar, interest prices, unemployment and inflation will be at the finish of the year.
And over the years, we’ve had some financial heavyweights on the program.
Guys and women, paid large money to advise large corporations and their customers on what lies ahead on the economic landscape.
In 2012, we added high school financial students to the mix to hold the expert economists on their toes.
James Ruse Agricultural High College this year.
In 2015, we went a step further, with University of Sydney students Michael Read and Mithun Ramalingam.
The negative news for the pros is that the students have not only kept them on their toes, but offered them a good trouncing.
Due to the fact for the third year in 4, in 2015, the winners of The Business’ “professionals” spot are students.
The Business’ expert economists in 2015 have been: Perpetual’s Head of Investment Method, Matt Sherwood Urbis Consulting’s Head of Economics, Nicki Hutley and NAB chief economist Alan Oster.
All very good sports, and in fairness to them, on a hiding to nothing in a contest like our “experts” spot.
In the short term, markets can be very irrational and trying to predict them can be like playing pin the tail on the donkey.
For instance, back in January, the All Ordinaries Index was around five,400 and all the indications have been that the stock industry was heading for a excellent year.
Four of our five “experts” shared that view, but Perpetual’s Matt Sherwood had a a lot more pessimistic outlook and, at the time, his prediction of five,300 looked a tiny strange.
Rapidly-forward to December, and that prediction is proper on the funds.
It was a comparable story with unemployment — six.3 per cent in January, with an economy well and genuinely off the boil, and the resources boom a fading memory.
Below these circumstances you would anticipate the jobless price to be going up, not down.
No-one predicted the year end rate of 5.9 per cent.
But I ought to not let our experts off the hook as well lightly. The students had to navigate the difficult situations also.
4 of our “experts” properly referred to as interest prices of two per cent and that was the only prediction any person got correct this year.
The University of Sydney’s Michael Study and Mithun Ramalingam had been closest to acquiring a second prediction appropriate, with their dollar forecast of 74 US cents.
For that, they are declared the winners for 2015.
More Stephen Bradbury at the Winter Olympics than Cathy Freeman in Sydney, but a win nonetheless.
And as they say in sport — for the expert economists, there is often subsequent year.
Subjects: financial-trends, business-economics-and-finance, currency, unemployment, stockmarket, australia