by Paul Snitzer
“If you can look into the seeds of time,
And say which grain will grow and which will not,
Speak then to me.”
In Macbeth the above words are spoken by Banquo – Macbeth’s friend, then his victim, then his spectral nemesis — when he and Macbeth happen upon three soothsayers. The soothsayers entice both Macbeth and Banquo, predicting that Macbeth will become King, but Banquo “shalt get kings” through his children. After hearing these prophesies, only Banquo expresses deep doubt, stating that the soothsaysers might “win us with honest trifles, to betray’s in deepest consequence.”
PMA feels similarly about soothsaying. We often state, when asked to predict when the next recession will occur, or what the markets will do the next quarter, that we do not have a crystal ball and do not make fundamental investment decisions based on predictions about the direction of the markets in the near future. Why is that?