Hi Elliott Waver,

Financial speculators and economists claim to be futurists. But ironically, their forecasts for markets and the economy are based on the past. They use simple linear extrapolation of recent trends. They review what the trend has been and “predict” that it will continue.

Consider the chart below, originally published by James Montier. It compares the history of actual earnings of S&P companies with analysts’ predictions of those companies’ earnings.

What do you see?

Analysts’ forecasts lag actual earnings by about a year. That’s because they extrapolate delayed data forward.

This approach is widespread among Wall Street analysts and economists. Relying on their forecasts often always leads you astray when the trend is changing.

Elliotticians and socionomists think differently. We have a method of anticipating change before any hint of the new trend is evident. When others are at peak excitement to extrapolate linearly, we are at peak excitement to extrapolate a turn in the other direction. It is a completely different way of thinking.

To learn more about our unique basis for forecasting, visit our Educational Resources page.

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