I know they need to “check the box” and get projections. In this case, “they” being bankers. Recently one asked for three years of projections with the first two years by month and the third year annually. Just for fun, consider the following:
- The folly of predicting winners in March Madness. Column in the Seattle Times said pick Kentucky, they’ve got it all. Oops, out in first round. The WSJ had a column saying pick the defending champs because most don’t pick them. Oops, out in second round. In conference tournaments one announcer said Iowa was so hot they’d go to the final four and another said Seton Hall would go deep as they were peaking at the right time. Oops, both out in the first round.
- It’s early 2021, vaccines are available, and things are opening up. Would you, would anybody, have predicted future mask mandates after politicians proudly stated if we get vaccinated there’ll be no more masks? What about massive supply chain disruptions, employees taking control of the job market, or a war in Europe?
- What about inflation? (Almost) nobody predicted that (I’d bet those who did predict inflation are those who have predicted inflation, a stock market crash, depression, etc. for the last 10 plus years, and are finally right). The Fed chief said it was transitory. The Seattle Times business columnist said the other day he was wrong when he said inflation had peaked in December.
- Just read about all the SPACs. It seems few if any are hitting their projections.
Look, projections can be a good exercise and they set goals. But three years out? The one thing I can predict is in three years multiple things will have happened that nobody thought of.
“Until the lions have their own historians, the history of the hunt will always glorify the hunter.” Chinua Achebe