They do not predict the future they give you indications of what could happen given certain factors. In addition, most people only listen to a “prediction” which is not what an economist is trying to do. They are simply giving you a map with a compass. Unfortunately most people do not understand how the mechanics of economics work so they are unable to take the map and compass that the economist is handing them and make a lot of money. Instead they just take the information as a “prediction.”

So for people who are listening to economist and taking what they are saying as a prediction they are missing the boat. They need to be taking what the economist is saying in conjunction with the potential exogenous factors that could affect the economy and make solid business decisions and big profits. I could go on further but, I think you are starting to get a feel of how to take economic data/interpretation and turn it into money!

The rest of your post is right on the money and I cannot agree with you more.

“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.” – Mark Twain

I couldn’t agree more about the folly of trying to predict the economic and real estate future – between the mainstream media and the government (take the CPI for example) misinformation is the rule of the day, and it’s very difficult to sort out the bits and pieces that are thrown our way every day. (Always see where someone reporting information to you sourced their information!).

Your admonition to not try and “time the market” is very accurate and great advice. Real estate market study has gone from a part time hobby to a business for me, and you can never really define the bottom of the cycle until it’s past. The real estate cycle for a market is readily definable, but it’s done as a study of very recent history, not looking into a crystal ball.

Sure, we’d all like to buy our real estate assets at the bottom of the real estate cycle for whatever asset class – you can track market data carefully and get close, but it’s much more important to find solid projects that have sound fundamental numbers. It is getting interesting around the country to have some markets in great shape and some absolute disasters – those few “smart-money” investors as you called them are off to the races