I wrote the following essay a while ago. It was recently published in Laissez Faire Letter https://lfb.org and I thought I’d reprint it here because it’s relevant…

By Mark Morgan Ford

Making good investment decisions is both a science and also an art.

You can, for example, track the performance of investment sectors, fund managers, and even investment advisers with precision. You can see their successes and failures with precision. But past performance, as we all know, is no indication of what will take place in the future.

You can calculate with reasonable precision global money flow, governmental and personal debt, unemployment, the gross domestic product, and so on.

But these data combined won’t tell you with any certainty what and when some macroeconomic event might happen.

The problem is twofold. The global economy is so damn big and complicated, and humanity’s response to economic shifts is equally complex. And this is to say nothing of “black swans”—unexpected and random events that cause major turmoil.

Which is to say that, for practical purposes, anticipating the future is impossible.

Still, as lowly investors, we must try. We must make regular buy, sell, and hold decisions about investments we own. And we must make general judgments about the market in order to assess our holdings.

I’ve been in the financial publishing business for more than 35 years. In that time, I’ve worked with many of the best investment writers and followed their advice. I’ve even been able to see unpublished analytics that track their performance.

I’ve concluded that most haven’t a clue about the future. But there are some who are actually very good at making specific investment recommendations over periods of time ranging from five to 15 years.

There are also some who are very good at big-picture economic analysis. By very good, I mean they are able to write arguments that convince me, a skeptic.

Of those few that are good, about half are perennial optimists. The other half, of course, are perennial pessimists.

What I do is this…

I read the best big-picture writers I know—not to “know” what the future holds, but to get a sense of what might happen. Then, I look to the specialists for specific advice that would apply.

Around 2004, my favorite big-picture pessimists were predicting a collapse of the real estate market, the dollar, and the stock market. They predicted a serious economic recession as a result of the insanely overvalued real estate market and the government’s love affair with paper money.

The optimists were saying not to worry.

I found the pessimists—especially my colleague and business partner Bill Bonner—more convincing.

So what did I do?