Several years ago, meteorologist Joel Gratz did just that. He tested the Almanac’s predictions for winter weather against actual measurements and found that it was right about half the time. That’s roughly what you’d expect from a series of coin flips. Meanwhile it missed major climatic events, like the severe drought in California, which would have been very useful to know about in advance.3
There are many forecasters who employ similar “black box” methods to try to predict the stock market. But aside from the occasional lucky guess, they cannot consistently foretell either individual stock prices or market movements as a whole. Because investor expectations and new information are priced in almost immediately, it’s nearly impossible to identify guaranteed “bargains” in advance.
Global stock and bond markets reflect the new and unknowable information in real time. Unfortunately, nobody has the “new and unknowable information” Almanac.
But this does not dissuade millions of people from trading on their own or someone else’s prediction, buying and selling in the hope of short-term gains.
Like with the Farmers’ Almanac, many want to believe that somebody really has cracked the code to the future.
The prudent investor, however, will ignore the ancient urge to follow the auguries and continue to save in a disciplined manner, regardless of what analysts are predicting. And he or she will enlist the help of a trusted advisor, not only to create a customized plan that’s designed to help weather the unknowable nature of the future, but also helps them stick with it for the best chance of success.