There is an academic discipline, Futures Studies, which focuses on the study of social, political, and technical trends to make predictions about the future. (I took a Futures Studies course for my master’s degree.) Last year, the Biomedical Research Foundation of Northwest Louisiana hosted New York Times bestselling author and futurist, Peter Zeihan.

Assuming one can successfully trend-spot, the trial for the investor is how to make money on the insight. This is especially true of innovative technologies. Many companies jump into the fray, but only a handful survive. Remember Betamax VCRs? Sony invented the “Beta” VCR and held a 100% market share for one year until it succumbed to an inferior VCR format: VHS. The Palm Pilot personal digital assistant and Blackberry smart phone were outstanding and pioneering products. RIP!

Trend sustainability ebbs and flows. Often, investors get lured in only after marketers get involved. What do I mean? Wall Street responds with new products targeting the trend after, not in anticipation of, demand. Here are some examples: 3D printing, cannabis, space exploration, blockchain, ESG. The viability and applicability of the themes arguably remain intact, but the theme-focused investment products have so far been duds. What is hot now? AI.

Another issue I see in the industry is the prominence of prediction-making over money-making: charlatanism. Social media enables anyone to say anything without accountability. For example, the demise of the US Dollar has been widely prophesied since the 2008 Credit Crisis. That prediction has not aged well, but it persists. Who perpetuates it? People who profit from fearmongering, ex. transactional gold dealers. Hmmm.

When you manage other people’s money, your job – what you are paid for – is to make money, not predictions, for clients. Investment performance numbers serve as the ultimate arbiter of accountability.