“We are trying to prove ourselves wrong as quickly as possible, because only in that way can we find progress!” Richard Feynman
Having strong opinions only has real value if we are able to evolve those opinions. Being willing and open to dis-confirming our own theory makes our theory stronger. It is not about the pride of “being right”, it is about being willing to be less wrong. Many complex adaptive systems; human herd behavior, the various financial markets, city states, governments, industries, ecosystems, social networks… all effect your financial plans. There is simply no way to get everything 100% right. That is why financial plans, like flight plans, require a lot of small changes and course corrections over time. Real financial planning is not a 3 in plan setting on a dusty shelf, it a continual process of learning and refinement. The client-advisor partnership is about getting “less wrong over time” and making wise decisions, with really informed best guesses. It’s about probability and gaining a new perspective; not predicting the future with false precision and foolish certainty.
“The point of forecasting is not to attempt illusory certainty, but to identify the full range of possible outcomes. Try as one might, when one looks into the future, there is no such thing as “complete” information, much less a “complete” forecast. As a consequence, I have found that the fastest way to an effective forecast is often through a sequence of lousy forecasts. Instead of withholding judgment until an exhaustive search for data is complete, I will force myself to make a tentative forecast based on the information available, and then systematically tear it apart, using the insights gained to guide my search for further indicators and information. Iterate the process a few times, and it is surprising how quickly one can get to a useful forecast.
Since the mid-1980s, my mantra for this process is “strong opinions, weakly held.” Allow your intuition to guide you to a conclusion, no matter how imperfect — this is the “strong opinion” part. Then –and this is the “weakly held” part– prove yourself wrong. Engage in creative doubt. Look for information that doesn’t fit, or indicators that pointing in an entirely different direction. Eventually your intuition will kick in and a new hypothesis will emerge out of the rubble, ready to be ruthlessly torn apart once again. You will be surprised by how quickly the sequence of faulty forecasts will deliver you to a useful result.
This process is equally useful for evaluating an already-final forecast in the face of new information. It sensitizes one to the weak signals of changes coming over the horizon and keeps the hapless forecaster from becoming so attached to their model that reality intrudes too late to make a difference.
More generally, “strong opinions weakly held” is often a useful default perspective to adopt in the face of any issue fraught with high levels of uncertainty, whether one is venturing a forecast or not. Try it at a cocktail party the next time a controversial topic comes up; it is an elegant way to discover new insights — and duck that tedious bore who loudly knows nothing but won’t change their mind!”
“One of the biggest problems with the world is that fools are always so sure and certain about everything and intelligent people are so full of doubts and uncertainties.” Richard Feynman