Marks cites Dimson saying the future is a probability distribution, not a single outcome that can be predicted.
“The future is not a set single thing that if you're smart enough, you can figure it out what it's going to be and it's going to materialize and make you right.”
Marks argues the future is a probability distribution of possibilities, not a single predictable outcome.
“It's a probability distribution. It's a range of possibilities in each thing, whether it's GDP growth next year or inflation next year, or who's going to win the next election,”
Marks cites JPMorgan chart showing negative correlation between S&P 500 PE ratios and subsequent ten-year returns.
“And it was a negative correlation, which means the higher the PE ratio you pay, the lower the return you should expect.”
Marks criticizes daily market commentary writers who predict the future and are only right half the time on average.
“And if if they ever kept a scorecard on the things that they wrote about what's gonna happen tomorrow, they would see that on average they get it right half the time”