How Predictions fool us…

India will grow in FY 08-09 at 9%...8%....!! Oil will peak at $ 200 / barrel by the end of this financial year. Indian aviation industry will continue to grow at 30% and will require around 900 new aircraft by 2020. These are just some of the many predictions reached after thorough analysis by some of the most prestigious institutions throughout the world last year. It’s hardly a year and we know how much has really turned out to be true!!
Sure, the economic conditions have gone through a sea change from the time these predictions were made but isn’t the risk supposed to be factored in while making such predictions?? This is truer especially when such predictions are the base upon which huge business and strategic decisions are made by the government, big organizations and also the investors. These organizations stand to lose billions because of decisions made on the basis of such faulty predictions. Most of this is taxpayers and investors hard earned money.

Is it that when the going is good, we tend to accept any rosy predictions that come our way without really contemplating over the basis of such predictions?? Why we don’t take such predictions with a pinch of salt?? Why we lose our rationality during such good times?? Its only know that all the previous predictions are being re-analyzed and new rational targets set, but the damage already done cant be repaired.