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Macro Forecasts Rarely Give An Edge
- Macro forecasts are often unknowable and provide no investment edge when they match consensus.
- Investors need unique knowledge to earn above-average returns rather than following macro predictions.
Prefer Bottom-Up Investing Over Macro Bets
- Invest bottom-up: buy bargains and sell overpriced assets without overreliance on macro views.
- Assess whether your macro-driven decisions have actually helped and stop if they haven't.
Inflation Is More Mysterious Than Commonly Assumed
- Inflation is mysterious and its causes and cures are poorly understood despite long study.
- Therefore put less weight on inflation predictions than many investors currently do.