Predicting Is Easy

A Danish proverb purportedly says, “Prophecy is difficult, particularly so in respect to the future.” Despite its uncertain origin, the thought is sound. Similar thoughts have been attributed to Mark Twain, Yogi Berra, Neils Bohr, and Victor Borge.

Sound is one thing, but useful is quite another. When you think about it a little, you find the thought is not even true. Prophecy or predicting is one of the easiest things in the world. Everyone does it. Many times a day. The real fact is predicting is very easy. It is an accurate prediction that is difficult.

Predicting with success

There are many aspects to successful predicting. The first and most important is the range within which you can claim success.

Precision must be predetermined to have any meaning. For example, one could predict the crosstown bus will appear at this corner at 35 minutes past the hour. If it appears at 37 minutes past, we judge the prediction as a success. At 40 minutes after, the prediction has failed. Especially true if it is raining.

Predicting without a time scale is quite easy. The stock market will be higher is one such, and we hear it often. The information is almost certainly true but nevertheless useless. The stock market will be up 10% within 90 days is tradeable information. Predicting this accurately is valuable. General predictions have little to compare to later.

Predicting how people will behave is error-prone.

Keep track and check. Comparing the outcome to your prediction is how you get better at predicting.

There are two kinds of predictions. 

One kind is a projection of what is already happening. A process prediction. If we know the share of new electric vehicle sales is increasing at 5% a year, we might reasonably predict that in 15 years or so, their share of new vehicles will be twice as high as it is now. We might refine that by predicting when the government will outlaw new gas-powered vehicle sales. We could assess how the delivery of charging stations might evolve. We can adjust the predictions as the elements converge at some point in the future.

Not every prediction based on existing information turns out true, no matter its persuasive underpinning. George Jetson’s flying car is still in the future.

The second kind is event prediction. These are much more challenging. In almost every case, they contradict the existing fact set and given that appear impossible. Before 17 December 1903, at Kitty Hawk, NC, the idea of powered flight would have been dismissed as ridiculous.

Most event predictions are in two forms. 1) This will happen, or 2) This will never happen. History has shown that the never happen predictions fail more often than the others.

Events are sudden, unexpected, and transformative. An easy example is the fall of the Berlin Wall. One thought after it fell was, “Who could have predicted this a year ago?” The reality was more of the form, “No knowledgeable person would have predicted this ten days ago.”

Predicting events is fun so long as no time frame is imposed.

Process predictions are likely to be inevitable unless there is an event that changes the rules and relationships

Some predictions.

Economics and finance.

A process prediction. Inflation will continue for much longer than people expect now because the factors that create it were tolerated for so long. The powers that be lacked the courage to mitigate the problems earlier.

Another process prediction, interest rates will rise. The harder question is how much will they rise? The key factor question is, do you raise interest enough to quell the problem at the price of a recession or even deflation, or do you go for a lower rate that permits some inflation but economic stagnation? The theory involves The Taylor Rule. It involves some factors not readily available to me. Still, even if we predict long-term inflation expectation at 5% instead of 8.5 %, with the economy operating at 90% of potential, we still get a FED funds rate of 6.21% compared to the current rate of 0.5%.  If you want to guess 4% inflation and 90% of potential, you get 4.71%.

Unemployment will stay low, but it doesn’t matter really. The key factor is the labour force participation rate. In the United States in 1999, it was about 67% and is now less than 62%. How much would the unemployment rate be if the participation rate leaped back to 67% without any new jobs on offer? Over 10%. We should pay attention to the factors that make up the labour force and decide if any of those are likely to change. As the population ages, will fewer people be looking for work? Likely. If government benefits fall or pensions collapse, then what? The unemployment rate looks like a single variable calculation, but it is not.

Science and technology

Virtual reality (VR) and Artificial intelligence (AI) will be visibly present in our world within five years. Some VR is obvious now, but it is rudimentary compared with what is to come. VR will soon allow us to remove ourselves from physical reality. Think what that would mean for training people how to drive a bulldozer, hit a baseball, or improve their golf swing. Recreation will change when you can be part of the movie instead of a spectator.

Quantum computing will advance to where it will be part of infrastructure within 10 years. It is too delicate and expensive for use in the home. Where it matters is in thinking about a problem. If a problem can be solved in 10,000 hours by a conventional computer and in one hour by a quantum computer, is it the same problem? Most problem solutions are input for another problem. Getting the answer to a complex problem that involves iterating other problems into its answer works better when you go one step an hour instead of one step a year. The result from that factor will be spectacular and non-intuitive. No process predicting technique can estimate the outcome.


The rule of law is nearly dead. Take the example of the government seizing the assets of people. The Russian oligarchs, some countries, truckers, and their supporters in Canada. Why are the 6 January protesters still in jail? Answer based on actual facts. If laws can apply to some but not all, or if it applies in different ways to different groups, the rule of law is an illusion.

Woke will not disappear, but people will be less assertive about it. Why? Because it is anti-society. If you believe in its factors, step up and make changes in your own life first. Spare us the drama based on the trivia of statements made 30 years ago.

Entitlement is about selfishness and, again, is anti-society. If the media and politicians decide to behave rationally and in our interest, it will be less pronounced. Don’t act as if that will happen soon.

Attacking the super-wealthy is futile. They provide the capital that permits the business where you work to exist. They have too little money to make much difference to society taken as a whole. Is it worth losing your livelihood to take all their money and use it to pay less than 10 months of the federal government’s spending? Taking is an event that harms everyone; keeping permits a process that helps everyone. Easy call.


People will discover the advantage of good health. How hard is it really? Get more exercise, lose some weight, eat better quality foods, and amend your life to reduce stress. It will take new habits but is not impossible or even super-hard. Notice what happened with COVID. People who pay attention realize pre-existing conditions and the virus, taken together, killed people in the pandemic. People who were not already compromised were close to immune.  Did you know 78% of the people who died with COVID were materially overweight? We learn best from experience and cheapest from other people’s experiences. Notice.

Students will come to realize that the education decision is a cost-benefit problem. If a particular program will not “earn out” don’t take it. Having $150,000 of student debt and low income is not dissimilar to being a slave. Be smarter, sooner.

Event possibilities

Aliens will come to earth and teach us how to behave.

A drug that produces the same effect as 15 minutes of strenuous exercise will become available.

People will live to 150 but work just to 110.

Atheism will disappear or become dominant.

People will change their attitude toward climate change, racism, equal outcomes, and government by elites. Most will just stick to what they believe now but don’t want to talk about.

The bits to take away

Wrong predictions are easy, but we don’t know which are wrong until later.

Check your own predictions and improve your skill

Learn how to assess other people’s predictions.

Use predictions to improve your life. Anticipation is a key factor.

The world is complex. Most of the predictions above are of the easy variety. If any work out exactly, it is more likely an accident than anything else.

Help me, please. Please subscribe. If you have found this article helpful, forward it to others.

I build strategic, fact-based estate and income plans. The plans identify alternate ways to achieve spending and estate distribution goals. In the past, I have been a planner with a large insurance, employee benefits, and investment agency, a partner in a large international public accounting firm, CEO of a software start-up, a partner in an energy management system importer, and briefly in the restaurant business. I have appeared on more than 100 television shows on financial planning. I have presented to organizations as varied as the Canadian Bar Association, The Ontario Institute of Chartered Accountants, The Ontario Ministry of Agriculture and Food, and Banks – from CIBC to the Business Development Bank.

Be in touch at 705-927-4770 or by email at

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