13 Jul The Present Guides Us to the Future

It’s hard to see forward when looking back at the past. Those who understand the present in the context of the past are poor at seeing the future. Those who know the present are best at seeing the future.

For example, let’s say a stock is trading now at a price of $45/share. If we know everything about the history of the stock and how it traded relative to other stocks, relative to its earnings and all other metrics; we will not be as good at predicting the price at which it will trade next week as will the person who knows only that it is trading now at $45.