Predictions – or why nobody knows anything about the future

It is currently fun watching so called experts making predictions on the way things will develop. My favorite is an online service that monitors the price of oil and especially heating-oil. Every day they have a new blog post with the current average price in Germany and also with a prediction on how the price will develop over the next month or so.

Only a week or so ago they were predicting that the price of oil would drop further and that the middle to end of January would be an ideal time to fill up the tanks.

Then Israel marches into Gaza and Russia gets into a gas row with its neighbors – effectively cutting off Russian gas supplies to Bulgaria, Greece and Turkey today.

Today, my oil-price oracle is telling me that we can expect a massive increase in the price of heating-oil (it has already gone up about 10% this year). They are now expecting prices to drop again “in the Spring”.

Unless of course, something else happens.

I recommend reading Taleb’s “The Black Swan” – a really thought-provoking book that shows how much things are influenced by improbable and unpredictable events that have yet to happen.

Does it help me know when to buy heating-oil? Of course not.


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