Friday September 30. Well, with the Dow closing at 10,913.38 today, it is probably as good a time as any to revise my annual forecast.

Friday September 30. Well, with the Dow closing at 10,913.38 today, it is probably as good a time as any to revise my annual forecast. You may remember, I had forecast the Dow ending the year at 12,700. And that just seems unlikely about now, don’t you think?

But I think a couple of questions are in order when you seem to be missing your forecast. One would be, would it then be better not to make a forecast at all? Was it a “valid” forecast, even though it proved to be off? What is the meaning of “good forecast” and “bad forecast”? Maybe forecasts should be measured in terms of percentages, dividing the forecast number by the actual result. What is the value of forecasts to investors and to me personally? What can I learn from the situation? Is some forecast inherent in any investment decision? If I continue to forecast, should I continue to use the same methodology or try to see if modifications to that are in order? Is it possible to make a “good” forecast, even though the results seem to be inaccurate, based perhaps upon sound methodology? Is methodology the key to good forecasting?