can be confident of while forecasting future stock returns is that you
will probably turn out to be wrong. The only indisputable truth that the
past teaches us is that the future will always surprise us—always! And
the corollary to that law of financial history is that the markets will
most brutally surprise the very people who are most certain that their
views about the future are right. Staying humble about your forecasting
powers, as Graham did, will keep you from risking too much on a view of
the future that may well turn out to be wrong.
So, by all means, you should lower your expectations—but take care not
to depress your spirit. For the intelligent investor, hope always
springs eternal, because it should. In the financial markets, the worse
the future looks, the better it usually turns out to be. A cynic once
told G. K. Chesterton, the British novelist and essayist, "Blessed is he
who expecteth nothing, for he shall not be disappointed." Chesterton's
rejoinder? "Blessed is he who expecteth nothing, for he shall enjoy
everything."
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