These days, "news" is old by the time you read it. People don't want to know what happened anymore -- they want to know what's going to happen next. In our quest to feed this obsession, and to seem smarter than everyone else, columnists and pundits make a lot of predictions, especially at this time of year. You'll likely see a lot of "what happened in 2004, and what's going to happen in 2005" columns very soon. In fact, you're reading one now.
I'm getting my year-end wrap-up column in early, not just as a service to you, but for two other reasons: First, as the head of a national polling company, it's our business to predict events and trends. Because we conduct so many national InsiderAdvantage surveys on an array of topics, we are often able to provide insight ahead of time. It's basically "predictive polling." Second, in the business of predictions, you're only as good as you are accurate, and I want to see how I did with the prognostications I made last year. I'll skip giving myself a letter-grade, but welcome your comments and criticism.
At the end of 2003, I predicted an economic upturn that would be modest, that stock market growth would occur in the second half of the year and that the Federal Reserve would "lay low during an election year."
Results: The DJIA is up around 5 percent, the S&P around 12 percent -- with most of the movement into positive territory occurring since November. Since August of last year, we have seen 15 consecutive months of positive jobs reports -- but the biggest gain (337,000) came only in October. The Fed has raised interest rates, though, four times this year, and will likely do so again in December. While that's not exactly "laying low," the increases have been in small, quarter-point increments, and the Fed has repeatedly signaled a "neutral" strategy. It's also had to come off a 46-year low for interest rates, and do so without slowing the economy down. Overall, I'm satisfied with the economic predictions.
Politically, I guessed that Howard Dean would capture the Democratic Party nomination for president and that Dick Gephardt would be seen as moderate enough to balance the ticket, but that in the end it wouldn't matter, as President Bush would not only carry Florida but also ultimately win re-election. While I (and many other pundit-predictors) were undone by Howard Dean's YEEEAAARGH! meltdown, the Democrats did select a more moderate, though just as unsuccessful, ticket. And Florida was officially "too close to call" by the best pollsters in the nation -- until it was over.
While I missed on the Dean prediction, I balanced that with prescience on Florida, and the only prediction that mattered in 2004: President Bush would win re-election. The key to this successful set of predictions was not underestimating how much the war on terror mattered to American voters, a mistake I avoided, but which many did not.
Though they are usually riskier, I ventured a couple of social predictions, as well: That Kobe Bryant would be found not guilty because of the flimsiness of the evidence against him, that Michael Jackson would be found guilty and that both cases had the potential to create a new round of racial tension. I'm not wrong yet: Kobe Bryant's accuser refused to testify and the criminal case was dropped by Colorado District Attorney Mark Hurlbert. And while Michael is still awaiting trial, sheriff's deputies in Los Angeles have recently concluded a two-day search of Bizzaro-world -- I mean, Neverland Ranch -- and obtained a DNA sample from Jackson. A special prediction just for Michael: The wardrobe of your future is orange jumpsuits, 24-7.
I was right on Kobe and am going to be right on Jackson. I also opined that Scott Peterson would find his way to the slammer -- and he has. That's as good as it gets in predicting social events.
In this business, accurate predictions are everything, and luck sometimes plays a key role. Comprehensive insight -- what corporate investor relations folks sometimes call "visibility" -- is probably the most difficult commodity to obtain in today's high-speed information age. What used to be "breaking" news is broken when you get it. What makes information valuable is the ability to look forward and see a trend or an event and how it will impact the public consciousness.
It's extremely risky, since you're only as good as your last predictions and one wrong call can sink your reputation.
But I am going to continue this high-risk practice of making predictions. Next week: a wrap-up of 2004 and a new set of fresh, bold (and accurate!) predictions for 2005.
You'll read it here first.