So, how did my prediction on the pound do?

A year ago, I read an article in the Independent with the headline “Pound sterling slump: The key moments in six charts – and how low it could drop”, with the dire prediction:

Most economists expect the pressure on the pound to get worse, increasing the volatility across the broader market

At the time, the pound was at $1.24 against the dollar. Brexit, innit.

I had this to say about the sky falling:

Personally, I think Sterling will bottom shortly … on the basis that:

  1. it’s at a 35 year low
  2. the majority of economists expect the pressure on Sterling to continue.

I work on the simple premise that economists basically have no idea what they are talking about, so when they say things like “and it can only get worse”, you have a big contrarian indicator.

They say that nobody rings a bell at market bottoms … but, well, sometimes they kinda do … and the people ringing the bells are politicians, economists and experts. They may not necessarily sound like bells, but they are bells nevertheless.

So here’s the crunch question: did I call it right?

Well, GBP/USD is now $1.39, up from $1.24. So the answer is “yes”.

And how much money did I make on this brilliant insight of mine? Why, the same amount of money I made on the realisation that when Gordon Brown was selling off our gold, the gold market was likely at a bottom, of course. Which is to say, I made no money at all. C’est la vie.

I was right, though: politicians, economists, experts and alarmist headlines are often good contrarian indicators.

Stay safe out there.

 

images.jpeg

 

Advertisements

About mcturra2000

Computer programmer living in Scotland.
This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s