Discern Valid & Inaccurate Forecasts

Tuesday we reminded you to explore industry future trends and Thursday how to find forecasts. Today we present some ideas on how to decide which forecasts to believe.

You need to discern accuracy amid all the articles, blogs, and broadcasts about forecasts and future trends in any industry. Today I share a few ideas that can help you choose which ones you will believe.

Strong  economic forecasting models exist, but most small- or home-based business owners do not have time or skill to process the algorithms of such validation models. I share easier and simpler methods.

• By their fruits you shall know them: You may check a forecaster’s accuracy by analyzing their past forecasts. Then, compare their forecasts with what actually happened. You can find their past forecasts by searching their name and the type of forecasts you desire. You can trust them if you find a consistent record of accuracy.
• Do the people you trust believe them: Ask people you trust to share who they listen to about industry trends. Do not rely on just one person’s opinion. Ask 4-5.
• Do other forecasters cite them: As you read forecasts and trend analysis, look for who they quote. Follow the lead to the source. Of course, ensure that you follow positive quotes and avoid citations of inaccuracy.
• Does their projection for future trends match your own forecasts: Do not let your own emotions taint the research. However, you can believe the information if your personal research and information corroborates theirs.
• Even accurate sources make mistakes: Even the most accurate forecasters make mistakes. Times and circumstances may change. Outside drivers or restraints may create unforeseen factors. Anticipate the possibility of errors.

Economic and industry forecasting using statistical models function better than fortune telling. Once you find sources that exhibit consistent accuracy, follow them—recognizing that nobody forecasts perfectly.

Next week we will talk about dealing with client problems: disloyalty, irate, & other