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Section 7
Predicting the Future
We know that no one knows what’s going to happen in the
future, whether it be the stock market, a presidential election,
a sporting event, or the weather. Yet we constantly look for
information that will give us clues as to the outcome of these
events. Why do we do this? I won’t try to explain it better, or
more precisely, than David Ropeik, an instructor at the Harvard
Extension School, did in an article in Psychology Today:
Ropeik says “Why do we keep trying to predict the future
when we are so often wrong? ... I predict that far in the future,
people will still be trying to predict what will happen far into
the future. For the same reason we do it now ... to give ourselves
the feeling of control over our fate. And not fate as in “What will
cities look like?” or “How will people travel in the year 2110?” I
mean fate as in safety ... survival ... life and death. The study of
the psychology of risk perception has found that one of the most
powerful influences on fear is uncertainty. The less we know, the
more threatened we feel, because lack of knowledge means we
don’t know what we need to know to protect ourselves ... which
equates to a lack control over health and safety, life and death. ...
Chapter 4: The Most Common Investor Mistakes
