Finology’s Biggest Pet Peeve: Predicting The Market

There’s something funny (and slightly irritating) about human behaviour in markets. The moment the index slips, everyone suddenly becomes a fortune-teller. WhatsApp groups flood with “aur kitna girega?” and TV panels light up with experts announcing imaginary “resistance levels.”

Really? Predicting tomorrow’s market direction is treated like predicting tomorrow’s weather, except that the market doesn’t follow a forecast. And just think: If predicting the future was so easy, why aren’t these forecasters richer than Tata or Ambani? 

The Obsession With Prediction

The problem isn’t that predictions are made. It’s that we believe them. Sure, there’s comfort in being told someone knows the future. But let’s be honest, they don’t actually know it!

As Warren Buffett said, “The only value of stock forecasters is to make fortune-tellers look good.”

Charlie Munger was even blunter: “I never allow myself to have an opinion on anything that I don’t know the other side’s argument for.”

And Peter Lynch? “Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves.”

These aren’t just witty lines. They’re battle-tested philosophies from people who actually built wealth, not TRPs.

And If Predictions Really Worked: 

Finology would be doing a lot of things differently (although we hope we never really have to):

• We’d be setting “target prices” for every stock, pretending we know the exact point where it will land.
• We’d be drawing resistance lines and support levels as if they were railway tracks.
• We’d be publishing daily forecasts, because that’s what gets eyeballs.

Do any of these help you invest better? NOPE!

In fact, the data tells you how costly this obsession with short-term bets can get. The average loss per trader in F&O jumped to ₹1.1 lakh in FY25, up from ₹86,728 in FY24. That’s the real price of chasing predictions and quick gains! Markets can crash 10% in a week. But if the company you own grows earnings 15% year after year, where do you think your wealth will come from? Not the prediction of next Friday’s closing price, but the compounding power of the business itself.

That’s Why We Stray Away From It 

Our job is to study businesses deeply and understand their long-term potential for you. And, as we said, if forecasters could really tell the future, they’d be running the biggest companies in the country, not shouting numbers on TV. So the next time you hear “aur kitna girega,” remember: the only people consistently making money from predictions are the ones selling them. The rest of us are better off following principles that outlast every crash and rally.