Today we look at the limits and dangers of trying to predict the economic future, and some "bold moves" that might help you replace idle and uncertain prognostication with certain action.
Economic insight. IHS Global Insight Inc. lists its 10 predictions for the economy in 2009, and you can check on how it's doing so far. But the most interesting thing may be the scorecard on the economic-research firm's 2008 predictions. IHS says it was on target in most of its predictions for 2008, but it set the likelihood of a recession at just 40 percent, failed to see $150-a-barrel oil coming, and called for a bottom in the troubled housing market during that year.
Statistical limits. Before the economic meltdown, author Nassim Nicholas Taleb wrote The Black Swan, about the dangers and opportunities in unforeseen events - such as a stock market crash. He wrote this essay for the Edge Foundation site that explains some of his ideas. "Statistics can fool you. In fact, it is fooling your government right now," he wrote in September as Lehman Bros. Holdings Inc. was collapsing.
Quirky indicators. Kiplinger.com says "offbeat barometers" of the economy can help you decide when things are really looking better. Bad signs include crowded movie theaters, rising sales of romance novels, and increased activity on dating Web sites. Those all indicate that people are trying to forget their money troubles. Another sign of continued trouble is a crowded rack at the dry cleaner - due to customers' delaying pickups.
Better than tea leaves. Instead of trying to predict your own economic future, writer Jeff Stibel, on the Harvard Business Web site, suggests "five bold moves that will work better than trying to read the tea leaves." For example, he said, "What better time than a depression to start a new company." His reasoning: "There is no better time to hire talent, no cheaper time to acquire inventory, and no more humbling time than a depression to force you to think frugally."