Everyone Believes It; Most Will Be Wrong: Motley Thoughts on Investing and the Economy

by Morgan Housel

Economic history can be summed up as the story of impeccably bad forecasting. Busts start when the future looks the brightest, and booms are born when the end looks near, but you never know when those stages hit until they're behind you.

"To make money they didn't have and didn't need, they risked what they did have and did need. And that's foolish. It is just plain foolish. If you risk something that is important to you for something that is unimportant to you, it just does not make any sense."

The main distinction is that those who make the best predictions have a collection of little ideas and are always incorporating new information into their outlooks, while those making the worst predictions have one grand theory that they trumpet through thick and thin.