I believe in revisiting past predictions and their accuracy as a way to gauge the effectiveness of your mental models.
If you are chronically wrong, it may be a good idea to re-evaluate the way you are interpreting the world.
Back in March, I made some predictions on ways I thought the US would change as a result of the COVID pandemic. 5 month later, I thought it would be fun (and useful) to re-visit those predictions in order test the way that I interpret reality.
Well, were my predictions accurate? I have listed out each prediction, let’s go through and see how things have progressed 5 months later.
Prediction #1: “Remote work will increase as coronavirus gets worse.” This was perhaps the easiest to predict, and was trending long before almost every office complex in the US closed. Some companies are asking the question, “why not work from home all the time?” Some companies have announced they are going fully remote even after the COVID era the most notable of which are Twitter, Square, Shopify, and WordPress. (Although WordPress doesn’t really count as they have been remote all along) The next step I suspect for many of these tech companies will be their max exit from the SF Bay Area to the cloud or more affordable areas.
Prediction #2: “Homeschooling will increase as a result of coronavirus” At time of writing, most states are engaged in the debate of whether or not to reopen schools for the 2020/21 school year. An interesting survey found that 1 out of every 4 parents are saying that their kids will not be returning to school regardless of its decision on opening. Although not a perfect indicator of the increased adoption of homeschooling, shares of virtual learning company Chegg have more than doubled in 2020.
Prediction #3: “Automation will increase. Technology that already exists will finally be implemented in the marketplace by necessity.” I don’t know if we have necessarily seen the automation aspect play out, but the “new normal” has certainly increased our use of technologies such as Zoom meetings, QR code restaurant menus, and tele-doc technologies. Cool new advancements like Tesla’s autopilot software has been released to the public during this time, but this is not related to COVID. (At least not directly)
Prediction #4: “A lackluster economy will reign in consumer spending habits.” Gauging the accuracy of this prediction will take time. The data on the surface appears to support this prediction, but the fact that many retail stores have been closed (or bankrupted) as well as short-term lifestyle changes seem (to me) to be responsible for changes in consumer spending habits. Consumer debt reached an all-time high in February, but has come down since then according to the latest statistic available. A longer term graph seems to show a progressive climb in consumer debt, with no leveling off in sight. I was probably wrong about prediction #4, but we will see.
Prediction #5: “You as an investor will also have more opportunity to acquire assets during this time period.” This has proved to be true for some fortunate individuals such as myself. I have seen solid returns on most of my “COVID investments.” These are comprised mainly of tech stocks, silver, and bitcoin. (All of which are up on the COVID timeline) One facet of prediction #5 I got wrong has been residential real estate prices, (although markets vary by locale) it seems the real estate market was only negatively effected by the pandemic for a very brief period. (If at all) Perhaps there was a buying opportunity in real estate as well, just with no dip. Of course time will tell.
Conclusion: Looking back at these predictions, they all seem pretty obvious now. If I hadn’t written that blog article back in March, I don’t think I would have remembered the level of uncertainty I felt when I initially shared these predictions.
Revisiting them has taught me a few things
- Many of my mentors (both in person and through the internet) have positively influenced me in how to think about this pandemic. (In other words, they have been mostly right) A few of these “internet mentors” are Scott Adams, Naval Ravikant, Mike Cernovich, and Adam Townsend. In the past, I never really evaluated the track record of those I garner life advice from. (To my detriment)
- When trying to make sense of a complex situation, evaluate incentives FIRST in order to understand behavior. This is not specific to COVID, but more often than not people will simply do what they are most incentivized to do. (This can apply to many different things, and is the simplest explanation of economics)
- “For those that have, more will be given. For those that don’t have even what they have will be taken away.” (Mathew 25:29) This can also apply to many different things, but to give one example of how this has played out in the last 5 months is this: During COVID big tech got bigger, small business got crushed. This unbending, harsh, principle that governs much of life here on earth (yes, it is not limited to the fiscal economic realm) is being clearly demonstrated in various applications.