The voodoo of informed predictions
This morning I got a mail from a well-regarded source about the likely outcome of the bi-monthly Monetary Policy Committee (The MPC is a committee of the Central Bank of Nigeria) meeting coming up later in the day. The source argued that the MPR, LR and CRR would probably be left at 7.5%, 30% and 2% respectively. With a caveat that the prediction should be taken with a pinch of salt and she's not liable for any calamity that hits anyone who uses the prediction to make decisions. Come on! Even Jim Jones was better than this.
By the way, if you don't know what these acronyms stand for, don't bother; they mean absolute nothing, especially to the man on the street. They are some of the jargons we bankers put up to feel very self-important.
It would have been a story if the ratios weren't changed: I can't remember if any of the predictions ever made by my source came true. But I'm sure if Harold Camping's rapture hasn't taken place before the next MPC, my impeccable source would make another prediction and guess what, my own prediction is that she's going to be wrong, as usual.
The business world is replete with loads of analysts and self-styled experts but empirical evidence has shown we (too bad, seems I'm one of them) are not better than an army of random monkeys hitting away at the keyboards and a chance Shakespeare classic coming out. The publishing editors are thrilled and the monkeys have been given an advance for 4 more classics. You see, if you deal with a very large solution space (another jargon, another narcissistic comment) like I'm working on for my current project, anyone can get lucky.
The real disaster, of course, is confusing luck with expertise.
If you think I'm joking, read about what McKinsey and Company told AT&T in 1982.