“How good are markets in predicting real-world developments? Reading the record, it is striking how many calamities that I anticipated did not in fact materialise.

Financial markets constantly anticipate events, both on the positive and on the negative side, which fail to materialise exactly because they have been anticipated.

It is an old joke that the stock market has predicted seven of the last two recessions. Markets are often wrong.”

— George Soros

Last update May 14, 2023. History

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George Soros 99

Hungarian-American business magnate, investor, and philanth… 1930

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“The stock market has forecast nine of the last five recessions.”

Paul A. Samuelson (1915–2009) American economist

Paul Samuelson (1966), quoted in: John C Bluedorn et al. Do Asset Price Drops Foreshadow Recessions? (2013), p. 4
1950s–1970s

“The stock market is not the economy, and the economy is not the stock market.”

Kai Ryssdal (1963) Radio host, United States Navy officer

repeatedly on his radio program " Marketplace APM https://www.marketplace.org/2019/09/30/the-stock-market-is-not-the-economy/" (September 2019)

“The most important thing I have done is to combine something esoteric with a practical issue that affects many people. In this spirit, the stock market is one of the most attractive things imaginable. Stock-market data is abundant so I can check everything. Financial markets are very influential and I want to be part of this field now that it is maturing.”

Benoît Mandelbrot (1924–2010) Polish-born, French and American mathematician

New Scientist interview (2004)

“I use the metaphor "markets as politics" to create a sociological view of action in markets. I develop a conceptual view of the social institutions that comprise markets, discuss a sociological model of action in which market participants try to create stable worlds and find social solutions to competition, and discuss how markets and states are intimately linked. From these foundations, I generate propositions about how politics in markets work during various stages of market development-- formation, stability, and transformation. At the formation of markets, when actors in firms are trying to create a status hierarchy that enforces noncompetitive forms of competition, political action resembles social movements. In stable markets, incumbent firms defend their positions against challengers and invaders. During periods of market transformation, invaders can reintroduce more fluid social-movement-like conditions.”

Neil Fligstein (1951) American sociologist

Source: Markets as politics: A political-cultural approach to market institutions, 1996, p. 656; Abstract

“Marketing has long known how to exploit fads and how to develop trends.”

Geoffrey Moore book Crossing the Chasm

Source: Crossing the Chasm, 1991, p. 6

“If financial markets aren't efficient, then what are they? According to the 'fractal market hypothesis', they are highly unstable dynamic systems that generate stock prices which appear random, but behind which lie deterministic patterns.”

Steve Keen (1953) Australian economist

Source: Debunking Economics - The Naked Emperor Of The Social Sciences (2001), Chapter 11, Finance And Economic Breakdown, p. 243

“History can predict nothing except that great changes in human relationships will never come about in the form in which they have been anticipated.”

Johan Huizinga (1872–1945) Dutch historian

De historie kan niets voorspellen, behalve één ding: dat geen groote wending in de menschelijke verhoudingen ooit uitkomt in den vorm, waarin vroeger levenden zich haar hebben kunnen verbeeld.
Source: In the Shadow of Tomorrow (1936), Ch. 20.

“One of the first things they teach stockbrokers is to stay out of the stock market. Brokers make their pile from selling advice, and from commissions on stock transactions. They can't predict the market, and few risk their own money. They, at least, only affect their clients' fortunes. Economists, though, can ruin the lot of us with their advice — yet if no science can predict a relatively closed system like the stock market, how the devil are you going to 'fine tune' something a large as the American economy? I'd think it arrogant to try; as arrogant as the man with three illiterate drug-addicted spoiled brats writing a book on parenting.”

Jerry Pournelle (1933–2017) American science fiction writer and journalist

"The Voodoo Sciences" http://www.jerrypournelle.com/science/voodoo.html, 1988
Assorted

“We tend to think of the stock and bond markets as relatively recent historical phenomena, but, in fact, there have been credit markets since human civilization first took root in the Fertile Crescent.”

William J. Bernstein (1948) economist

Source: The Four Pillars of Investing (2002), Chapter 1, No Guts, No Glory, p. 6.

“The U. S. stock market was now a class system, rooted in speed, of haves and have-nots. The haves paid for nanoseconds; the have-nots had no idea that a nanosecond had value. The haves enjoyed a perfect view of the market; the have-nots never saw the market at all. What had once been the world’s most public, most democratic, financial market had become, in spirit, something like a private viewing of a stolen work of art.”

Michael Lewis book Flash Boys

Source: Flash Boys (2014), p. 69

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