Warren Buffett Warns Not to Listen to Investing Gurus, ‘The Only Value of Stock Forecasters Is to Make Fortune Tellers Look Good’

Investing legend and Berkshire Hathaway (BRK.A) (BRK.B) CEO Warren Buffett has built a reputation on rejecting many of the conventions that dominate Wall Street, and one of his most pointed observations concerns the practice of market forecasting. “We’ve long felt that the only value of stock forecasters is to make fortune tellers look good,” he wrote in a 1992 letter, summarizing his long-standing skepticism toward predictions about short-term movements in stocks or the broader economy.

The statement appears in one of Buffett’s widely read annual letters to Berkshire Hathaway shareholders, where he has often urged caution against relying on expert forecasts. His comment is not a critique of any single institution or analyst, but a broader commentary on the inherent unpredictability of markets. Buffett has repeatedly emphasized that short-term price movements are influenced by countless variables, many of them unknowable or impossible to quantify. As a result, he views forecasting as a practice that offers an illusion of precision rather than meaningful insight.

Buffett’s dismissive stance toward predictions is informed by decades of observing how individuals and institutions behave under uncertainty. His investment career spans multiple recessions, inflation cycles, geopolitical shocks, crashes, and recoveries. In each case, long-term outcomes were shaped far more by the underlying performance of businesses than by the accuracy of forecasts made beforehand. This historical perspective gives unique weight to his argument. With Berkshire Hathaway’s track record of compound growth under his leadership, Buffett’s views carry unmatched authority in the investing world.

The context surrounding his observation involved a period of heightened speculation, when investors were tempted to seek guidance from those promising clarity about the future. Buffett’s point was that neither he nor anyone else can reliably predict market swings. Instead, he emphasized evaluating businesses based on fundamentals such as earnings durability, competitive position, management quality, and long-term growth potential. His remark underscores the distinction between analyzing companies and attempting to predict the direction of the market as a whole.

Although the comment was made years ago, its relevance remains consistent across market environments. In times of optimism, forecasting tends to flourish as analysts attempt to justify rising valuations. In periods of volatility or economic stress, forecasts may become even more extreme as prognosticators respond to investor anxiety. Buffett’s statement highlights the timeless reality that forecasts rarely offer investors an advantage; rather, disciplined decision-making and a focus on intrinsic value are more durable strategies.

The analogy comparing forecasters to fortune tellers also reflects Buffett’s direct communication style. While humorous, it conveys a serious message: relying on predictions can distract investors from the fundamentals that actually drive long-term returns. His approach encourages individuals to accept uncertainty as a natural feature of markets, rather than a “bug” to be fixed through expert analysis.

As investor interest in economic commentary and predictive models continues, Buffett’s observation serves as a reminder that the most reliable guide for long-term investing remains the performance of real businesses, not the accuracy of forecasts meant to anticipate the next market move.

On the date of publication, Caleb Naysmith did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com