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Art Diamond Predicts a 40% Chance that Elon Musk Will Make It to Mars



(p. A1) What are the chances that readers will make it to the end of this article? About 40%.

If you do make it, that prediction will look smart. If you don't, well, we said the odds were against it.

Such is the nature of the 40% rule, a favorite forecasting tactic of Wall Street analysts and other prognosticators trying to make a bold call without being too bold.

Former British Prime Minister Tony Blair said last month there's a 40% chance that Brexit will be reversed; Citigroup Inc. analyst Jim Suva wrote that there's a 40% chance Apple Inc. buys Netflix Inc.; and Nomura Holdings Inc. economist Lewis Alexander said there's a 40% chance Nafta gets ripped up.

The nice thing about 40% is that you never have to say you were wrong, says Peter Tchir, a market strategist at Academy Securities. Say you predict the Dow Jones Industrial Average has a 40% chance of hitting 30000 before year-end.

"Get it right and you can say 'See, I was telling everyone it could happen,' " he says. "Get it wrong and you can weasel your way out: 'I didn't say it was likely, I just said it was a strong possibility.' "



For the full story, see:

Winkler, Rolfe and Justin Lahart, "How Pundits Never Get It Wrong: Call a 40% Chance." The Wall Street Journal (Tuesday, Feb. 27, 2018): A1 & A10.

(Note: the online version of the article has the date Feb. 26, 2018, and has the title "How Do Pundits Never Get It Wrong? Call a 40% Chance.")






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