Why “Market Predictions” Are Worse Than Horoscopes

Ray Dalio, founder of Bridge­wa­ter Asso­ciates and one of the most suc­cess­ful hedge fund man­agers in his­to­ry, once said: “He who lives by the crys­tal ball will eat shat­tered glass.”

He’s being gen­er­ous.

At least horo­scopes are hon­est about what they are. Nobody expects Mys­tic Meg to have a CFA char­ter. But turn on finan­cial media and you’ll find an end­less parade of “experts” pre­dict­ing bit­coin’s tra­jec­to­ry, inter­est rate move­ments, prop­er­ty prices, and which stock is about to moon. These pre­dic­tions come wrapped in charts, dressed up in cre­den­tials, and deliv­ered with the con­fi­dence of some­one who has nev­er been pub­licly account­able for being wrong.

Here’s the thing: if any­one could pre­dict mar­kets with any degree of accu­ra­cy, they’d be obscene­ly wealthy. Most of these pun­dits aren’t. And the ones who are rich? They made their mon­ey get­ting paid to pre­dict, not by bet­ting on their own pre­dic­tions. That tells you every­thing you need to know.

Why We Lis­ten Any­way

We’re wired to want some­one to know what’s going on. Believ­ing in prophets, kings, and emper­ors was prob­a­bly a sol­id evo­lu­tion­ary sur­vival strat­e­gy for most of human his­to­ry. The skep­tics? The ones who pub­licly ques­tioned the ora­cle? They got sac­ri­ficed to the gods or exiled from the tribe. They did­n’t stick around long enough to pass on their skep­tic genes.

So here we are, descen­dants of believ­ers, still look­ing for some­one to tell us what’s com­ing next.

Horo­scopes exploit this need cheap­ly and trans­par­ent­ly. Mar­ket pre­dic­tions exploit it expen­sive­ly and with a veneer of respectabil­i­ty. At least your horo­scope won’t charge you 2‑and-20 for the priv­i­lege of being wrong.

The Actu­al Dif­fer­ence

Horo­scopes are vague enough to be unfal­si­fi­able. “You may encounter an oppor­tu­ni­ty this week.” Sure. Fine. Can’t prove that wrong.

Mar­ket pre­dic­tions are spe­cif­ic enough to be verifiable—and they fail ver­i­fi­ca­tion con­stant­ly. Yet some­how, the pun­dits keep their plat­forms. The econ­o­mists who pre­dict­ed eight of the last two reces­sions still get invit­ed back on tele­vi­sion. The cryp­to influ­encer who called for $100K bit­coin in 2022 is still post­ing charts in 2025.

There’s no account­abil­i­ty loop. Horo­scope writ­ers at least have the decen­cy to not pre­tend they’re doing sci­ence.

What Actu­al­ly Works

The alter­na­tive to pre­dic­tion isn’t paralysis—it’s process.

Instead of try­ing to fore­cast where a stock is going, look at where it’s been. Actu­al num­bers. Actu­al per­for­mance. Is the com­pa­ny mak­ing mon­ey? Can you buy it at a dis­count to its val­ue? Is the trend your friend or your ene­my?

This isn’t excit­ing. It does­n’t make for good tele­vi­sion. Nobody’s book­ing you on Bloomberg to say “I don’t know what the mar­ket will do, but here’s a com­pa­ny trad­ing below its intrin­sic val­ue based on cur­rent earn­ings.” Unless, of course, your last name is Buf­fett.

But it works.

The biggest ben­e­fit of ignor­ing pre­dic­tions is clar­i­ty. Peo­ple pre­dict­ing a boom? Don’t care. Peo­ple pre­dict­ing a crash? Still don’t care. Some influ­encer says this stock is going to make a killing? Show me the num­bers or shut up. Bit­coin to a mil­lion dol­lars? Explain to me how to cal­cu­late the val­ue of a sin­gle coin or stop wast­ing my time.

The Buck­et Prob­lem

Think of it this way: the list of things peo­ple believe might be true is enor­mous. Thou­sands of gods, mon­sters, mir­a­cle cures, get-rich-quick schemes, and mar­ket pre­dic­tions. Some of those things will turn out to be true. Most won’t.

Your job isn’t to believe in all of them equally—that’s impos­si­ble and con­tra­dic­to­ry. Your job is to sort them into buck­ets: things that might be true, and things that are most like­ly to be true based on actu­al evi­dence.

Some peo­ple sort based on what their fam­i­ly believes. Some sort based on what makes them feel spe­cial. Some sort based on what sounds sophis­ti­cat­ed at din­ner par­ties.

And some sort based on what the evi­dence actu­al­ly sup­ports.

The Bot­tom Line

Mar­ket pre­dic­tions are astrol­o­gy for peo­ple who think they’re too smart for astrol­o­gy. They scratch the same psy­cho­log­i­cal itch—the des­per­ate human need to believe some­one knows what’s coming—but they come with high­er fees and low­er self-aware­ness.

At least your horo­scope knows it’s enter­tain­ment.

The next time some­one tells you where the mar­ket is head­ing, ask them one ques­tion: what’s your track record? Not their cre­den­tials. Not their con­fi­dence. Their actu­al, ver­i­fi­able, account­able track record of being right.

The silence will tell you every­thing.

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QAV Myth Killers is a week­ly col­umn in the QAV newslet­ter, tak­ing apart a piece of
invest­ing con­ven­tion­al wis­dom. Read the series, or
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