The Courage of Outrageous Predictions

I have seen so many outrageous predictions in my day.  The $DJIA is going to 36,000.  The $DJIA is going to 3,600.  $GLD is going to 5,000. $GLD is going to $500.

I especially note those which preface their outrageousness with claims of being outrageous – self consciously meta.

I read one the other day that went something like this,

“here’s an outrageous prediction, we’ve seen the highs of the year.”

That’s not really that outrageous.  This guy is bearish.  He could have just as easily have said, “I am bearish.”

There is a motivation to making outrageous predictions and it is usually a red flag.

Here’s how it works.

If I make an outrageous prediction or label a prediction outrageous and I am wrong, I respond to ciriticism like this:

“Well, I said it was an outrageous prediction.”

This discounts my responsibility for being wrong to some degree. But if I am right, I will say,

“look how brilliant I am. I made an outrageous prediction and it was dead on.”

Outrageous predictions are used to manage impressions.  One defers responsibility if wrong and gloats incessantly if right.

It is a manipulative gambit.