Interesting article on over-optimism

[Ferru123]

http://www.scientificamerican.com/artic ... eroptimism

'Research shows that chief financial officers, for example, “were grossly overconfident about their ability to forecast the market” when tested by Duke University professors who collected 11,600 CFO forecasts and matched them to market outcomes and found a correlation of less than zero'.

Jeff

[superfrank]

over-optimism is built into the human condition.

watch this great Horizon programme posted by PeterLe that proves it scientifically... http://www.betangel.com/forum/viewtopic.php?f=18&t=5732

you see it everywhere from the BoE's inflation forecasts of the last 5 years to the OBR's forecasts for economic growth - they have a reasonable guess at what it might be in the next year or so, but then after that (in the medium term) the forecast always goes to where they want it to be. i.e., inflation at target, growth back to 3% (even when they have no evidence whatsoever that this will be the case).

did this BoE inflation forecast come true? did it hell.