Predicting the end of the world has always been a losing bet. We were reminded of this once again when Oct. 7 came and went, and the world didn't go poof.
It was supposed to. That’s according to the eBible Fellowship, a small online religious group whose leaders somehow interpreted the Bible as calling for Armageddon this past Wednesday, courtesy of the recent blood moon and last week's total lunar eclipse. Never mind that we get a blood moon several times a decade, and there have had hundreds of them since the Bible was written.
There is a long history of end-of-times predictions, and to date, they have an absolutely perfect batting average of 0.0 percent. The utter lack of success of all who make these predictions doesn't seem to deter others who try to notch a win — assuming you believe that getting the end-of-the-world forecast right is a win.
The Economist has done us a favor and assembled the major end-of-world forecasts. It goes without saying that if you are reading this, the most recent forecast didn't come to pass.
Given this track record, one wonders why people still make predictions of this sort — or any other for that matter. We have discussed many times why ordinary prognostications by Wall Street strategists and economists are futile; a forecast of the demise of the Earth is the sort of thing that looks like a losing bet from the outset (never mind that if you were right, who would know)?
Despite all sorts of adversity, humans have endured 1 million years or so of plagues, famines, droughts, floods, plus plenty of self-inflicted setbacks like wars. Humans are so successful as a species that we have managed to occupy and dominate almost every corner of the globe.
The most recent end-of-world forecast reminds me of a tale told by the great Art Cashin, UBS’s veteran floor broker. Cashin has more than a half-century of experience at the New York Stock Exchange, and is one of the financial world’s great raconteurs.
Over dinner not too long ago, Cashin related the story of something that happened during the Cuban Missile Crisis. Everyone was on edge as the U.S. and Soviet Union approached the brink. One day, word began to spread that Russians had launched their nukes, which would arrive in 11 minutes. A trooper to the end, Cashin ran around the exchange floor trying to sell short, but was unable to do so. The 11 minutes passed, but nuclear annihilation never came. Soon after, Cashin reported to his boss. He told him what occurred, and was told that in the future, upon learning of the end of the world, the proper trade is to go long, not short.
He asked his boss, Why go long if the world is ending? “It never does end,” his boss told him, and even if it does, “who are you going to settle the trade with?”
One day, the world will indeed end. The sun will run out of hydrogen fuel, turn into a red giant star, and expand until it engulfs the earth. That is about 5 billion years in the future.
In the meantime, you can safely ignore all other forecasts.
--- Check out Why Barry Ritholtz Went Robo on ThinkAdvisor.