Analysts at Goldman Sachs spend their whole life learning advanced mathematics, building sophisticated models of complex corners of the world, and are financially incentivized to predict the future accurately, because Goldman Sachs makes billions of dollars if they can be 10% more correct than the next firm (who also employs brilliant analysts).
So, how accurately did they predict economic metrics within their area of expertise? They got it very wrong, for 25 years, often not even directionally correct:
Thick blue line is the actual value of the metric; grey lines are quarterly predictions of how the blue line will move, from each starting-point.
But maybe the macro economy is too hard to predict. It is “chaotic,” we are told, in the mathematical sense that small changes in inputs result in large, unpredictable changes in outputs. The “Butterfly Effect.”
When we create strategies, we’re told to “skate where the puck is going.” That means predicting the future, such as macro economic trends, and the trends of our industry and immediate competitive markets.