Considering the huge amount of information that big fund managers and equity analysts gather, it is not surprising that they have so much confidence at predicting what is going to happen! Luckily for us, the future is not determined by confidence.😊

There is one and only one thing that can define future and that is - uncertainty.

And while that may sound ominous on the face of it, it really is far from that. In fact, uncertainty of how the future unfolds, is the very reason we are not still using Blackberrys or Nokias and probably the reason why we may not be using cell phones at all in the coming decades. Think about it, twenty years ago what was the certainty that a search engine would one day be the top five companies in the world!?!

And yet listening to the top finance channels on television or that conversation at the party last Friday night, it looks so real that someone ‘does know’ what is going to happen. If the people with bragging rights on TV knew what is going to happen, then why would the world ever have an Enron or why would we need ‘a too big to fail’ policy by central bankers, to protect big banks from folding up?

In the noise of the financial markets, with so much data floating around, it is not difficult at all to pull together numbers that tell the story one chooses. Any story at all, AND do it convincingly at that.

The truth is, we don’t know. We need to use our rationality and judgement to take good financial decisions. But if someone claims to know the future, we also need to use the same rationality and judgement to see the fragility of such claims. Whether for life in general, or specifically in the financial markets, there will always be much much much more that we will not know, than what we will ever know.

I have been lucky enough to have been around people who are not just wise enough to see that, but also intelligent enough to not waste time trying to prove the folly to the fools. There is another teacher who will show them that, sooner or later. The markets.

- Devang Shah

October 1, 2021

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