"Forecasting" is seeing in advance, or anticipating, future trends. It differs widely both in the degree of anticipation and in definiteness. Sometimes the problem of the forecaster is to anticipate day-to-day changes in the market for some commodity, such as cotton; again, it may be to foretell the course of commodity prices in general during the next decade. In one case it may be sufficient to indicate merely whether the trend will be up or down, while in another case it is essential to decide how sharp the anticipated movement will be. Again, the forecaster may be asked to express an opinion as to the duration of a movement or even its probable extent.

Often it is enough for the business forecaster to know accurately what are the existing conditions and trends. At any given time, misinformation and misunderstanding of the current situation are generally so prevalent that to know the truth, the whole truth, and nothing but the truth about the existing condition of business is equivalent to making a forecast. Certainly, it is knowing in advance of others! How many business men recognized that a general recession in business was under way in the early part of 1927? How many knew that a downward trend in a business cycle had already begun in June, 1929?

Skill in forecasting, like knowledge of economics, does not necessarily mean profits for the forecaster. The art of taking advantage of advance information is not always given to the one who is able to get such information. To be a really good forecaster one must be a scientist and be willing to make laborious studies conducted in a most impartial manner and spirit. Probably few successful business men have either the requisite time or the qualifications for such work, and certainly few forecasters who have the requisite training and scientific attitude will be found to have the qualifications best suited for success in business.

A point of great importance is this: In nine cases out of ten success in business forecasting will be greatly reduced when the forecaster "takes a position" in the market which he is endeavoring to forecast. When one has an "interest" in a development, one becomes an "interested" observer, and it is as true today as yesterday that wishes are the fathers of thoughts. Certainly it is easier to be right on the market when one has nothing at stake in that market other than being right.

Even when the forecaster is employed by a business man, he may find that his advancement does not depend entirely on the accuracy of his forecasts, but partly upon his ability to foresee such trends as are in conformity with a position already taken by the employer. In the same way some of our most popular general forecasters are those who have the art of being bearish in a bullish way.