6min chapter

The Unforecast Episode: Making Our 2025 Market Calls to Show Why Forecasting is a Waste of Time

Two Quants and a Financial Planner | Bridging the Worlds of Investing and Financial Planning

notes

CHAPTER

Berkshire's Cash Conundrum

This chapter explores the implications of Charlie Munger's substantial financial gift to young investor Li Lu and discusses the opportunity costs of Berkshire Hathaway's large cash reserves. The hosts analyze investment strategies, comparing Berkshire's performance with the S&P 500, while emphasizing the importance of optionality in finance.

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Transcript

Episode notes

We're back with our annual predictions episode, where we look back at our (surprisingly not terrible) 2024 market calls and make fresh predictions for 2025 (which will likely be very wrong). In this episode, we're embracing the humbling experience of market forecasting to prove to everyone (and ourselves) why market forecasting is a waste of time. You'll hear us: Review how Justin actually nailed the S&P 500 forecast for 2024 (we're still trying to figure out how) Break down why predicting markets is so ridiculously hard (but we keep doing it anyway) Share our thoughts on where inflation and Fed policy might be headed Make our predictions for 2025 - from S&P targets to potential corrections Discuss what might drive markets in 2025, including M&A activity, IPOs, and buybacks We keep it real about our hits and misses, share some laughs about our forecasting methods (including Matt's Van Halen-inspired prediction system), and try to offer some useful insights along the way. If you enjoy discussions about markets that don't take themselves too seriously while still diving into the important stuff, this episode is for you. Join us as we continue our annual tradition of probably being wrong about everything - but having fun doing it!

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