Economic Forecasting for Non-Astrologers
The Dividend Cafe
The Dividend Cafe - The Bahnsen Group
4.9 • 572 Ratings
🗓️ 8 August 2025
⏱️ 23 minutes
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Summary
Today's Post - https://bahnsen.co/4lnsaSr
The Futility of Economic Forecasting and the Current State of the Economy
In this week's Dividend Cafe, host David Bahnsen, Managing Partner and Chief Investment Officer at The Bahnsen Group, discusses the limitations and challenges of economic forecasting, especially for investors. He underscores the difficulty of making accurate economic predictions and linking them to investment outcomes. Bahnsen critiques economic forecasting through various perspectives, including a quote from economist John Kenneth Galbraith, and highlights the complexities of interpreting present economic conditions, such as jobs data, trade levels, and corporate profits. The discussion touches on current challenges such as the impact of trade tariffs and the mixed signals from various economic indicators. Bahnsen aims to provide a clearer understanding of the present economic landscape without making bold predictions about the future.
00:00 Introduction to Dividend Cafe
00:38 The Futility of Economic Forecasting
03:13 Current Economic Conditions
07:49 The Jobs Market Analysis
14:30 Trade and Tariff Impacts
21:18 Conclusion and Final Thoughts
Links mentioned in this episode: DividendCafe.com
Transcript
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| 0:00.0 | Welcome to the Dividing Cafe, weekly market commentary focused on dividends in your portfolio |
| 0:07.0 | and dividends in your understanding of economic life. |
| 0:12.0 | Hello and welcome to this Friday's Dividend Cafe. I am your host, David Bonson, the Managing Partner, Chief Investment investment officer here at the Bonson group. |
| 0:21.6 | And I want to discuss today the economy, which is kind of, in a sense, what we discuss all the time in the dividend cafe. |
| 0:31.2 | So you might be thinking, why are we doing a whole dividend cafe to talk about the economy, if we're pretty regularly looking |
| 0:38.4 | at various macroeconomic impact, conditions, circumstances, forecasts, what have you. |
| 0:45.9 | Well, let me first start with what we're not doing in the dividend cafe today and something |
| 0:51.3 | that I am very critical of anyone doing, and that is actually the overall |
| 0:56.6 | world of economic forecasting. As much as I talk about macroeconomics in Divida Cafe, as much |
| 1:03.4 | as the study of economics is largely connected to the great passions of my life. I do not believe that economic forecasting |
| 1:13.3 | is a particularly useful thing to do for anyone, but especially for investors. And before you |
| 1:22.6 | scratch your head to try to figure out what I'm getting at, there's a long tradition of self-aware economists |
| 1:29.3 | denigrating the concept of economic forecasting. |
| 1:32.9 | And in today's written dividendcafe.com, I start off with a quote from one of my least |
| 1:38.1 | favorite 20th century economist, John Kenneth Galbraith, who is very well-known, famous, highly |
| 1:43.8 | regarded, and for a variety |
| 1:45.7 | reasons, someone philosophically I'm not aligned with in economic worldview, who famously said |
| 1:53.1 | that economic forecasting existed to make astrology look respectable. |
| 1:59.1 | So sort of a self-deprecating humorous comment on the challenges of economic forecasting. |
| 2:08.3 | And yet this is nothing new for me in the Dividend Cafe to point out, not only that I find |
| 2:15.1 | forecasting about the future difficult and that most people are not very good at it. |
| 2:23.3 | But in the investment world itself, I find the notion of attaching an investment narrative thesis |
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