MyPunchblog

This post written by Eric Peden, Director of Operations and Analytics

 ”The real trouble with this world of ours is that it is nearly reasonable, but not quite. Life is not an illogicality, yet it is a trap for logicians.  Its exactitude is obvious, but its inexactitude is hidden.  Its wildness lies in wait.” — G.K. Chesterton

Anyone following the financial markets in recent months knows all about wildness.  No analyst could have foreseen the freefall of previous stalwarts like Dell or GE, where a runaway bear market crushed year-ago expectations by several orders of magnitude.

So if the future is capable of such wildness, then what do we do about it?

I think about this often at MyPunchbowl, where one of my responsibilities is to create and explain our forecasts.  When it comes to predicting the future, I’m always wrong, sometimes happily so. So, what’s the point of the exercise?

I’ve come to learn that forecasting isn’t about predicting the future. The purpose of forecasting is to better understand the variables that influence the future. Accuracy matters, of course, but forecasting is more useful as a management tool than as a prediction machine:  Can we dissect the business into its critical components? How much influence do we have over those components? Which levers can we pull to yield the best results?

The future is wild, and it is somewhat out of our control. But thinking like a good forecaster can help us navigate the unknown and ultimately take advantage of the opportunities that wildness inevitably creates.