The parable introduces us to a man who refuses to see anything as positive or negative. Why? Because he believes the consequences of good fortune and misfortune are unknowable.

Yet this simple truth does not stop us from latching on to whatever guesswork about the future parades as thoughtful insight. Consider some of the things we believed would proverbially end the world:

  • Internet stocks during the halcyon dot-com days didn’t need earnings. Wrong.
  • Y2K meant planes would fall out of the sky. Wrong.
  • The S&P 500 at a low of 666 would never recover from the 2007-2009 credit crisis. Wrong.
  • The Fed’s Quantitative Easing (or “QE”) would bring about hyperinflation. Wrong.
  • Conversely the end of QE would bring about a market crash. Wrong.
  • The US’ loss of its AAA credit rating meant interest rates would skyrocket. Wrong.
  • Congress’ inaction around the “fiscal cliff” meant the markets would tank. Wrong.
  • Greece was going to cause a global economic collapse in 2010. Wrong.
  • And again in 2011, 2012, 2013, 2014 and 2015. Wrong.
  • Oil was headed to $250/barrel.  Wrong.

It seems we form an opinion then seek evidence to support it:

Oil prices are up? The glass half full person believes it’s a sign of economic improvement. The glass half empty person believes it’ll leave consumers with less discretionary income.

Oil prices are down? Let’s argue the other side. The glass half full person believes consumers will have more money to spend. The glass half empty person believes the economy is slowing.

Anything can be a “telling” sign. Consider demographics. The glass half full person argues for the large Millennial population that needs to buy homes and save for retirement. The glass half empty person portends the demise of the stock market as the large Baby Boomer population sells their holdings to pay for their retirement while moving to the “safety” of bonds.

The next time you hear a stock market or economic prognostication don’t forget our friend the Chinese farmer.