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The Futility of Forecasting

“History never looks like history when you are living through it.”

– John W. Gardner

Here’s a reminder for those making predictions.

You would have never believed it if, in the mid-1980s, someone told you that in the next two decades the Soviet Union would collapse, Japan’s economy would stagnate for 20 years, China would become a superpower, and North Dakota in the United States would be ground zero for global energy growth.

You would have never believed it if, in 1930, someone told you there would be a surge in the birthrate in the U.S. from 1945 to 1965, creating a massive generation that would have all kinds of impacts on the country’s economy and society.

You would have never believed it if, in 2004, someone told you a website run by a 19-year-old college dropout on which you look at pictures of your friends would be worth some US$230 billion in less than a decade. (Nice job, Facebook.)

You would never have believed it if, in 1900, as your horse and buggy got stuck in the mud, someone pointed to the moon and said, “We’ll be walking on that during our lifetime.”

You would have never believed it if, in late 1945, someone told you that after Hiroshima and Nagasaki no country would use a nuclear weapon in war for at least seven decades.

You would have never believed it if, eight years ago, someone told you the United States Federal Reserve would print US$3 trillion and what followed would be some of the lowest inflation in decades.

You would have never believed it if, in 2000, someone told you Enron was about to go bankrupt and Apple would become the most innovative, valuable company in the world. (The opposite looked highly likely.)

You would have never believed it if, in 1910, when forecasts predicted the United States would deplete its oil within 10 years, that a century later the country would be pumping 8.6 million barrels of oil a day.

You would have never believed it if, three years ago, someone told you that Uber, an app connecting you with a stranger in a Honda Civic, would be worth almost as much as General Motors. (General Motors’ worth some US$58 billion in case you weren’t counting).

You would have never believed it if, 15 years ago, someone told you that you’d be able to watch high-definition movies and simultaneously work your spreadsheets on a 4-inch piece of glass and metal. (Thank you, tablets!)

You would have never believed it if, in 2002, someone told you we’d go at least 13 years without another major terrorist attack in America.

You would have never believed it if, in 1997, someone told you that the biggest threat to Microsoft were two Stanford students working out of a garage on a search engine with an odd, misspelled name. (Hello, Google!)

You would have never believed it if, just a few years ago, someone told you investors would be buying government debt with negative interest rates.

You would have never believed it if, in 2008, as U.S. “peak oil” arguments were everywhere, that within six years America would be pumping more oil than Saudi Arabia.

You would have never believed it if, after the lessons of World War I, someone told you there’d be an even bigger war 25 years later.

But all of that stuff happened. And they were some of the most important stories of the last 100 years. The next 100 years will be the same.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. This article was written by Morgan Housel and first published on fool.com. It has been edited for fool.sg.