Doomsday Forecasting (a Primer)

Bob Veres wrote an entertaining article in the April 2016 issue of Financial Planning. While some get premium pay for marketing services, he offers up this four-part recipe for “no added cost.”

Step 1 is to call a financial services reporter at some random point during the next year and forecast disaster. This will help you become a household name quickly: “if the market will bleed, it will lead.” This will also establish you as someone concerned about shielding assets from huge losses. Being the one looking to take them out of “risky” stocks and protecting them from “normal market returns,” you will be viewed as a savior!

Step 2 takes place slowly as your prediction will likely not come to pass. Veres points out that nobody, including those who reported your alarmist views, will check up on your track record so this is okay.

Step 3 is to wait a short period of time before repeating Step 1. Be dramatic, creative, and bold!

Step 4 is eventual confirmation because the law of averages suggests your probability of success to be directly proportional to the number of attempts.

Being right once is all it takes to make you newsworthy for many years to come. People like Andrew Roberts (Royal Bank of Scotland) and Marc Faber (“Dr. Doom”) have made a living out of doing this so why can’t you? Both were right once. Michael Lombardi (Profit Confidential) was wrong with the “Great Crash of 2013” but did say in January of this year that the markets would “look similar to 2008.” Brilliant!

Rather than leaving us in the lurch, Veres gives us a few bonus recommendations. First, continue to make wild market predictions so as not to disappear from public consciousness. Second, make use of forecasting technology like the random number generator or dartboard to determine whether a bullish or bearish environment is upcoming. Keep your methodology proprietary and become comfortable with others referring to you as a “guru.”

Finally, never stay true to the predictions when investing your own money. If anyone should be able to wait additional years before being able to retire, “let it be the nervous investors whose darkest fears you stoked along the way.”